Health insurers see a great big loophole in the recently passed health care reform legislation, and, being businessmen first, health care providers last, they plan to drive their Hummers right through it.
According to Robert Pear at the New York Times:
The law requires insurers to spend a minimum percentage of premiums on health care services and “activities that improve health care quality” for patients.
Insurers are eager to classify as many expenses as possible in these categories, so they can meet the new test and avoid paying rebates to policyholders.
Thus, insurers are lobbying for a broad definition of quality improvement activities that would allow them to count spending on health information technology, nurse hot lines and efforts to prevent fraud. They also want to include the cost of reviewing care by doctors and hospitals, to determine if it was appropriate and followed clinical protocols.
http://www.nytimes.com/2010/05/16/health/policy/16health.htmlInsurers would like us to think that they deny policies in order to prevent fraud. In recent years, they have attempted to portray health care providers as 1) greedy, 2) lying 3) bastards.
Takes one to know one.
The AMA analyzed insurance company denials back in 2008 and:
(they) found that doctors spend 14 percent of the fees they receive from insurance companies and Medicare on the process of collecting those fees, adding more than $200 billion (about ten percent) a year to the nation's healthcare costs . Sadly, about 30 percent of over 5 billion claims generated annually, are rejected, and surprisingly, only 50 percent of the rejected claims are ever resubmitted.
http://ezinearticles.com/?Medical-Billing-Denials---1-Payers-Tactic-to-Reduce-Costs-at-Providers-Expense&id=1293899Think about this.
One third of your health care is called “unnecessary” by the nation’s private insurers. Corrupt health care system? No, clever bookkeepers at Blue Cross. They know that the high cost of filing a claim with an insurer will make doctors, hospitals and other providers think twice about resubmitting a denied claim, even if the treatment was the correct one for the patient.
Here is how the math works:
Let us assume $130 for initial charge, $55 - allowed amount, $29 - service cost, $6 - claim preparation and mail, and $25 - claim rework cost. If the claim is paid in full after contractual adjustment ($75), practice total costs would add to $35 and income - $20. But if the payer denies a part of the claim, say, $30, then the provider has a choice between leaving it alone and losing $10 on the entire incident or reworking it and then taking a chance of losing even more - $35, in case of a repeat denial, or losing $5 if the payer chooses to pay the previously denied part of the claim.
That one in three number is just an average. Some insurers (such as Pacificare in California) deny an even higher percentage of claims.
http://blog.aflcio.org/2010/02/26/california-investigating-7-health-insurers-for-denying-claims-hiking-rates/So what? If you are a health care consumer, you could care less if your provider gets paid, right? Your hospital will not reinsert your diseased gallbladder, because Aetna decided not to cover your surgery---
On the other hand, many providers are allowed to bill patients for services that insurers refuse to pay. Emergency care often falls under this category. Imagine getting a $5000 ER bill for treatment of your son’s asthma attack, because your insurance company decides not to pay. It is now up to you to beg, plead and threaten your plan into changing its mind. Or say you wake up with chest pain in the middle of the night. Your dad died of a heart attack at around your age. You call an ambulance and get taken to the closest hospital. You are admitted to the ICU and a bunch of (expensive) tests are ordered, which show that you do not have a bad heart, you have a hiatal hernia. You are sent home on Nexium. And, a few weeks later, the hospital starts asking how you intend to pay off your $80,000 bill, since Anthem has decided that heart burn was not an indication for hospital admission.
Sometimes, denial can lead to more than big bills. They can kill.
Under Hanway’s leadership, Cigna also did what for-profit insurance companies do so very well to enhance the profits that become multi-million dollar bonuses. They denied care to thousands upon thousands of policyholders, and the company profits were protected.
But some of those denied care died as a result. Nataline Sarkisyan was but one. She was 17. She needed a new liver. Cigna said no until enough nurses and enough of the family’s friends and neighbors – and a few thousand concerned citizens – protested loudly enough to make some news coverage. Then Cigna reversed itself. Even in the face of Nataline’s impending death, Hanway did what he felt was best to do to minimize damage to Cigna – not to save a teenager’s life. The negative PR became a bit much. Wendell Potter, who worked as Cigna’s communications director at the time, has said since that he watched the whole mess unfold and was one of the people advising Cigna’s leadership to reverse the denial.
But the reversal came too late. Nataline died. December 20, 2007. And for her mom and dad, no Christmas will ever be the same. The Sarkisyan’s buried their only daughter while wrapped in the love and support of their Armenian community, the nurses of the California Nurses Association and thousands of bloggers and others who tried to somehow ease the unimaginable.
http://www.pnhp.org/news/2010/january/denial-of-care-profits-73-million-for-cigna%E2%80%99s-retiring-ceoThe provision of the health care reform bill which requires insurers to pay out a certain percentage of their revenues for actual medical care is designed to stem this abusive---and lucrative--- practice. However, if insurance companies can count the money they spend keeping you from getting necessary care as
money spent providing you with necessary care , they will quickly expand this part of their operations. Indeed, if they lose the ability to deny coverage for pre-existing conditions, they will attempt to recoup those losses by requiring their members to jump through hoops in order to get health care.
And hoop jumping can be pretty hard for those Americans most in need of medical services.
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