The Ugly Truth about U.S. Health Insurance

I think the first time I noticed a problem or it became a reality to me was when my co-workers daughter was ill and needed a device to help her in which her insurance at the time (Healthnet) denied it, for not being medical necessary.

It didn't take long after that, within seventy two hours later, my co-workers 19 year old daughter would be dead.

Even before that, I knew or at least felt something wasn't right. You had two opposite forces working against one another and it seemed the one in the middle (patient) would be the one hurt, (Externality), but like so many I seemed in denial of just how bad it was and is.

I remember many cancer patients reaching lifetime limits and insurance companies were denying further treatment, leaving the patient to either die without treatment or coming up with solutions without coverage. Even today you will find Medicare Supplement policies that are not subject to the same standards as “Health insurance” have clauses not covering cancer if the patient had former cancer to a certain point.

As the Gross Domestic Product increased in health care closer to 19% and more patients were experiencing higher cost from it, something more amazing happened, insurance companies began making larger sums of money, and yet they claimed to be a victim of the high cost of medical cost, in fact during the years of 2001 through 2008, were some of the best reported earnings for health insurance in history and certainly their CEO pay appeared to show it.

I had spent most of my life working in health care and dealing with insurance companies, what I started to see began to take me to a place realizing just how bad it was becoming. I started seeing insurance companies focus on the value of their stock, CEO pay was more and more lucrative, it became a game of stock options and buybacks. People like William McGuire would give themselves huge bonuses out the door with options and date those options back to low points of stock so they could cash them out at a higher price. I started seeing government regulations switched to “Standards” and a large amount of special interest money put into politics. Healthcare became just something else to take advantage of through PACS and payoffs. Even standards for prior authorizations were met with different requirements based on how big a company or Union was and how much money they paid the insurance company compared to smaller groups.

I became nauseated every time I saw Motley Fool speak about investing in United Health Group because “they” are a great investment and while watching golf having Optum ads stating “What health care should be”.

I did pay attention to lawsuits, nation wide out of interest; I saw the lawsuit that showed how Optum had created a program that would automatically take 20% of a claim they were suppose to pay for and deny certain codes to get to that 20% mark, but it didn't stop there and it continued in many different forms through having multiple separate entities doing a variety of things in hope of reducing payments even more.

For example when you send a claim to United Healthcare, they often split the claim and request medical records. They hope the providers will send only one set of chart notes, this will allow them for example, to deny some codes for not receiving medical records. They will also have two separate entities work on certain codes of claims. For example some codes might go to Optum, and some codes might be done by United Healthcare themselves. Worse yet, Optum must review their claims approve it with a number and send it back to United Healthcare approved on their end, a lot of times then United Healthcare will not show Optum approved it and providers will be stuck with attempting to prove Optum approved it and claims will be stalled even longer. Then once Optum and United Healthcare finally gets that figured out. United Healthcare will screen the claim again and see if they can bundle things to reduce payment, check on an authorization or anything else they can use to deny it.

This may not seem like a big deal to many, but it's estimated that the administration cost of dealing with insurance companies like this cost about $100,000.00 per year per physician.

United Healthcare's approach has led many other insurance companies to use their Optum pricing policies for guidance causing havoc for providers everywhere.

I would say that the biggest things that had separated United Healthcare from others is their desire to find ways to not pay. United Healthcare understands that emergency care doesn't require a prior authorization, so they have found ways to twist that upon admissions through the emergency department by requiring a retro authorization for services, although they understand all services are required to have chart notes and be subject to review for medical necessity, they have added something they can deny services in able to not have to define medical necessity and by requiring a retro authorization for services that basically are an extension of emergency care they have found one.

This allows care of patients to be free, in which they don't have to pay on the professional side or at least not pay for a while as the provider battles it out with them. Worse yet, they understand that all emergent services are required for the provider to perform under law. It's a win, win at least for them.

Not to be out done, most insurance companies are suppose to pay emergency services as in network under law, even if they aren't. They twisted this law to state only the facility (Special interest at work) and have left the professional's “out of network” leaving huge balances to patients.

But what about planned procedures? Well they thought about that as well. It use to be that insurance companies would list what required prior authorization for the year, but then they decided it was better every six months, then they decided to make it every three months, sadly they just didn't stop there, some decided it would be best to change an authorization not by month, but by a day within a month. For example on the 7th it didn't require a prior authorization but on the 8th it did.

It led offices to scramble to find out if it did or didn't require prior authorization on little notice at times, Insurance companies kept building more and more obstacles, some authorizations are for a certain date only, others are a range and all ranges can vary with insurance and what the procedure is. It became a way of attempting to manipulate denials and it has been very effective adding to their large profits.

Some of the best one's I have seen are submitting an authorization and having it approved starting when they received it and by the time it's approved it's almost expired if not expired before the procedure can even be scheduled or performed.

Some of the worst abuses I have seen was the Retro Authorization through Emergency Admits from United Healthcare, you would get the retro-authoization and they would start the authorization the day after it was performed, so you would have to fight for a few more months attempting to have it fixed.

United Healthcare also does what I call the Enron approach about three to four times a year for a week each. They have their website for prior authorizations have “errors” and spit out that certain procedures don't require an authorization, even if they do. Even calling into them, won't fix it. It will give you a case number showing it doesn't require an authorization which you are suppose to use to appeal the denials, but sadly what happens when claims come in, they are triggered with no authorization on file and that case number is often ignored through at least two levels of appeal. It can easily delay a claim payment up to a year.

In fact United Healthcare recently lost a lawsuit, because all though they said they had means for providers to appeal, in order to get paid. They had processes put in place on purpose, making it very hard if not impossible at times to do so for providers. But despite this court loss, it must pay well, because they continue to do it.

The newest form of prior authorization for insurance companies are through third party administrators. These companies brag that they can cut the cost for insurance companies for “unnecessary” procedures between forty and sixty percent. American Imaging Associates, Evicore and National Imaging Associates are three of the largest. This adds another layer of confusion to the process. Now providers must find out what procedure goes to which authorization company. Each company has ways of submitting prior authorization on line and each one has their own guidelines based on necessity. However there are a few problems with each. Sometimes for example, they don't show the patient on file causing delays in the process, sometimes they show providers out of network when they are in network and sometimes their websites are down. Sadly these companies appear to have less regulation, allowing many of them the process of denying things that are necessary.

National Imaging is interesting because if two test are ordered even for different reasons, they will deny one, stating they want the result from the other test first. Worse yet, they have become such a problem they often automatically put request in a peer to peer review, requiring ordering physicians to call to take their time, for notes they already have in front of them, hoping the physician's office won't.

Probably the hardest part is the patient with these third parties.

Patients have no idea about these third parties, and frankly they get lost in the shuffle. Often I get calls from customer service representatives stating they have the patient on the line wanting to know why something was denied.

You would think they would know, since they are the insurance company to begin with? But they don't. Sometimes they don't even know someone else does their authorizations to begin with. I get patients calling mad all the time, claiming they checked with their insurance and was told we had never submitted anything to them.

Not to be out performed, we also get the poor customer service representatives that some of these third parties have, so when an insurance company customer service representative does call, they don't get the correct information. This often leads to the insurance company calling stating how we didn't do something based on what they were told, instead of the facts as is. I like to remind them, it's their prior authorization company, not ours, we were not the one's denying the service.

Who exactly is reviewing for medical necessity anyways? Many of these third party companies or insurance companies hire nurses and physicians, however what gives them the qualification on certain procedures? I've seen it all.

I had one physician asked how come a Stent can't be done instead of a ICD Implant? Simple answer was it's not “Ischemic Cardiomyopathy. Simply doing a Stent wouldn't change anything”, You have people approving or not approving things like heart valves, that simply don't have the qualifications to even make a recommendation for the vary services they are approving or denying.

To make matters worse, at times the physicians that are qualified are taught to look for reasons not to allow something instead of to allow something.

Let's make something very clear about health care in the United States that appears to be lost, if this was truly about health care instead of money we would see a lot more emphasis on trying to get patients care, then reasons to deny them their care.

This article has only touched a small portion of the complications in health care we currently see and the huge role of insurance companies that have had a large impact not only on cost, but on health of all of us, everything from allowing prescriptions, procedures and preventive care to our of pocket cost, it has left our health care system of dysfunction to get become more dysfunctional with their special interest money and has potentially led the way to making it unsustainable over time.