by Heath Mackley, MD, FACRO
Don’t you get upset at health insurance companies?
To that frequently asked question, my short answer is, “No.”
I have no love for health insurance companies either, but the anger that physicians and patients feel about them should probably be more evenly distributed between the insurance companies, the health care providers, the lawyers, the government, and anyone that receives the benefits. Like most of our modern “messes,” it started with a mixture of theory, good intentions, self-interest, and lack of appreciation of the consequences of government policy decisions. From that point, it evolved in directions that reflected the competing interests of the parties involved. But this is not going to be a historical treatise about how we arrived to where we are, instead it’s a description of where we are, so we can best move forward with our eyes open.
Your insurance policy is a contract. Like me, you’ve probably never seen this contract. In my case, I’m not a party of this contract, it is between the Hershey Medical Center and Highmark Blue Cross Blue Shield. However, the simplified core of the contract is that the insurance company will cover medically necessary medical interventions in exchange for a premium. Both sides voluntarily enter into this agreement, and I voluntarily signed up for the benefit.
The medical interventions are paid for out of a pot of money that all members of the “premium paying community” pay into. Like all communitarian arrangements, the labor of the healthy pay for the medical interventions of those that need them. The insurance company keeps a portion of this money because of the services it provides. This includes: defining “medical necessity” for the group, negotiating a lower “price” for the medical interventions, following the laws that regulate this financial product, and marketing the product to encourage new members to join the “premium paying community.”
A key point is that the insurance company, whether it is a government agency or a corporation, defines medical necessity. There may be an appeal process, but the final decision is made by the insurance company. You may have legal recourse, and the court may intervene and interpret your view of medical necessity as the correct one, but other than that rare instance, the insurance company decides.
You have no way of knowing ahead of time what the insurance company will approve because their policies are not made available to you. Furthermore, even if you did have that policy made available to you, those policies that govern their decisions will continue to evolve. They have to. The scientific base of medicine continues to march on. The outcome of this is that you don’t know “what the rules are,” and it’s hard to envision a scenario where you ever will.
And this is why more and more medical interventions require pre-authorization. The health care provider submits the prescription of the physician or other health care provider, and the insurance company gives an answer of whether or not the prescription is medically necessary. The bright side is that patients are much less likely to get a large bill for something not approved, and the providers know ahead of time what the insurance company is likely to pay. But there is a dark side. It adds a layer of cost, hassle, and frustration to the ordering physician. Surprisingly, pre-authorization does not even guarantee any payment will be made. The insurance company still retains the right to not pay for the service! As the pre-authorization process takes over every nook and cranny of medicine, an army of billing specialists have been employed to shepherd providers, and physicians are spending more and more and more time devoted to filling out forms, waiting on hold to talk to a reviewer, and then talking to reviewers why they want a patient to have a certain drug or procedure. The vast majority of pre-authorizations are approved, largely because physicians are fairly good at prescribing appropriate interventions. So, in most cases, it is a waste of effort that adds value to no one. Even in cases where the prescription is not approved, it is rarely because the recommendation of the physician was wrong. It is almost always because there was another cheaper alternative the insurance company demands must be done first, irregardless of whether or not that makes the most sense for that individual patient.
PAMED is not sitting idly by while this carries on. PAMED supports HB 1293 , a bill introduced 4/26/2017 that streamlines the prior authorization process with insurance plans. This will codify limits on what obstacles insurance companies can put in place for the approval of medical prescriptions and orders. Even if there are unintended consequences, and almost all legislation does, for most of us in the house of medicine, it will provide some much needed relief if passed. It is not a given this will pass as it will likely be opposed by the insurance companies, but if physicians and patients call their legislators, it will, as this issue has enormous bipartisan support.
However, this issue shouldn’t be about demonizing insurance companies. I voluntarily remain in the world of health insurance, and so will most of you. Furthermore, PAMED represents all physicians, including those working for the insurance industry as policy makers and reviewers. Most of them truly want patients to get appropriate cost effective care, and they are frustrated by the process as well. By working together and advocating for our patients, we can make this mess better. So stay engaged!