Health Insurance 101(Part II)-Authorizations/Denials/Appeals

If you are in a health plan that requires authorization to for tests, procedures and to see specialists, this is one area that can often seem like a black hole of luck.  “I hope I’m lucky and I get authorization”…..or “I hope I’m lucky and I get my procedure authorized this YEAR!”  Actually, health plan authorization processes are regulated and must follow certain guidelines.  That is not to say all of them do, but if they consistently are out of compliance with their process, they meet certain consequences from their oversight organization National Committee for Quality Assurance (NCQA) http://tiny.cc/FFt6X;  the most severe of those is losing accreditation.  Certain “turn-around times” must be met, which is the time from when a doctor makes a referral to when the insurance company reviews it and then processes the authorization or denial.   NCQA requires standard of care medical information to be used when reviewing the medical necessity of a referral, test or procedure.  They require medical necessity denials to be reviewed by a physician.  They also require certain language to be used in denial letters that give patients their rights of appeal of the denial.

What this means to you, is that the common myth that “bean counters” are sitting in an office somewhere arbitrarily approving or denying your medical requests, is just that, a myth.  There are RNs and MDs that review for medical necessity based upon community standard of care and like previously stated, all denials must be processed by a physician.  This doesn’t mean that everything always goes like it should.  Mistakes can be made, which is why it is important for you to somewhat understand the process, the review methods and your rights.

You should not be waiting weeks for a referral to be processed through your insurance.  The process should be complete within three days, if all medical information to justify medical necessity is provided by your doctor to your insurance provider, or fifteen days if more information was needed.  Let’s say a patient is being referred to an endocrinologist because their diabetes is hard to control.  In most cases, they primary care physician (PCP) must provide medical information to the insurance company showing that the referral is medically necessary.  This might include PCP  office visit notes, lab results, list of medications, etc.  Sometimes hold ups occur because PCPs do not provide this information.  Additionally, sometimes denials occur because PCPs do not provide the adequate medical information.  If you have been denied a service, and you think clearly there is medical necessity there, ask your PCP what information was given to the  insurance company when they made their determination.  You may have to speak with the doctor’s medical assistant or referral’s coordinator, to ge this information too.

This takes us to denials and appeals.  Denials may be issued for a number of reasons:

1.  The requested provider may be out of the insurance plan’s network of contracted providers.

2.  The requested service may not be a covered benefit under your health plan.

3.  The insurance company’s  Medical Management Team may have determined that based upon the information provided by your PCP, the requested service is not medically necessary.

With the high cost of medical services currently, an insurance company must negotiate contracts with the providers to keep prices reasonable.  Most insurance companies pay an approximate 33% of billed charges for procedures, tests, and doctor services.  That translates into if you didn’t have insurance and had to pay cash for an MRI, lets say, you would pay $3,000 for that test, whereas your insurance company would pay approximately $1,000 for the same test.  So, it is clear to see why insurance companies do not allow their members to seek services from non-contracted providers.

Each health insurance company usually has a number of different plans with different levels of coverage.  When you sign up for a plan, remember to not only read the booklet of covered benefits they send to you, but keep it in a safe place for future reference.  Often interpreting covered benefits can be a bit tricky.  One example is that many plans have exclusions for “cosmetic surgery”.  However, if it is related to a medical diagnosis, some may cover that cosmetic surgery, such as, work on a cleft lip or palate, breast reconstruction after a mastectomy, etc.

Medical necessity can sometimes be the area of authorization/denial that can cause the most controversy and many times requires the most information received by the insurance company to make an informed decision.  Like previously stated, there are standard of care guidelines available to the insurance company nurses and doctors that assist them in making their decisions.  You or your PCP however, may disagree with the decision.  When you disagree and want the insurance company to reconsider their decision, that is called an appeal.  There are different processes for filing a physician appeal vs a patient appeal.  If the PCP does want to appeal the decision, I often advise the patient to appeal as well.

NCQA requires HMO’s to provide specific appeal information on their denial letters to patients.  There should be a phone number as well as an address.  There are also two types of appeals, an “expedited” appeal and a routine appeal.  An expedited appeal is when there is imminent danger of loss of life or serious injury to the patient.  These types of appeals must be handled within 72 hours, or less if the situation dictates.  Routine appeals must be resolved within 30 calendar days.  I recommend that for routine appeals, patients write a letter.  In this letter, carefully address your issue and reason for disagreement of the denial.  If you have medical information/medical records to add, send them with the letter as well.  Many patients feel that there is no use to going to the bother of writing an appeal.  My experience leads me to disagree.  I have seen a number of denials that are actually overturned on appeal.  Not the ridiculous ones, like a request to put in a swimming pool in the back yard for exercise needs, or the requests for a facelift to assist with mental health, but most serious appeals are overturned.  If you aren’t a good letter writer, maybe solicit the assistance of a family member who is.  Don’t threaten or be abusive in the letter.  State your case factually and emphatically.

If you are interested in the NCQA guidelines that are used to accredit insurance companies, you can find them at this link.  http://tiny.cc/NeO9e For information specific to this article, scroll down to the category named, Utilization Management (UM).

In this article I have discussed the process of authorizations/denials/appeals for most HMO insurance plans.  These  exclude Medi-caid and Medicare, who have their own processes.  I will discuss these in a future article.

Knowledge is Power!!!

Long Term Care Insurance by Clark Howard

Clark Howard is a well known television and radio personality who is considered an expert in consumer advocacy and finance.  I hope you find his information on Long Term Care Insurance helpful.

How to pick solid long-term care insurance

Clark has long encouraged people in their late 50s and early 60s to consider buying long-term care (LTC) insurance, which pays for care in a nursing home, an assisted living facility or in your own home.

There’s a misconception that Medicare will pay for this kind of care, but it won’t. Medicaid, meanwhile, requires you to impoverish yourself before the government will pick up the tab for a nursing home. But what happens when you get better and suddenly you’re broke? LTC insurance takes the worry out of the equation.

The industry, however, has been littered with fly-by-night operations and other unstable players. The latest blow comes from Conseco, which worked out a deal with Pennsylvania to dump its LTC obligations and essentially turn people over as wards of the state.

>>>>>click on the link for the rest of the article>>>>  http://tiny.cc/here623

Health Insurance 101 (part I)

The future of Health Insurance will most certainly be changing soon; whether it will be a minor or major change, is still up for debate. I think it is clear though that some sort of changes are on the way. For the purposes of this blog, I will be dealing with what we currently have.

Back in the day, (pre-managed care) most people would go to a doctor or receive a healthcare service, recieve a bill and then pay it or send it to their insurance carrier to pay. Sometimes, but not always, the doctor would bill the insurance company directly for the patient. This type of model that is characterized by: provide services, bill patient/insurance, is referred to as a Fee for Service model. There are positives and negatives to the fee for service model. One of the main negatives are runaway costs. Health providers are paid to “provide services” whether they are necessary or not. This is not to say that doctors then were crooks, but  there was no one watching spending or efficiency or even quality of care. Doctors didn’t necessarily have professional alliances with each other or ways of communicating effectively. Healthcare costs were like a runaway train. (and yes, healthcare costs can still be characterized this way)

In 1971, President Richard Nixon’s administration ushered in the beginnings of the Health Maintenance Organization (HMO), which was supposed to help slow down the rapidly increasing healthcare costs.  The HMO Act of 1973 authorized $375million in federal funds to help develop HMOs. It also prevented individual states from creating laws to ban these pre-paid groups. Companies with at least 25 employees were mandated to offer a federally qualified HMO plan to their employees. Managed care and HMOs have not been a perfect answer, but many see them as an efficient way to administer quality care while providing cost containment.

Here are a few definitions of the different types of health insurance people might encounter today.

Health Maintenance Organization (HMO)- A form of health insurance in which members prepay a premium for health services and which generally includes a defined set of services made available through a defined panel of physicians for enrollees at a preset price. unityhealth.com/Glossary/index.htm  When one belongs to an HMO one must chose a Primary Care Physician (PCP) to direct their care.  In general, they may not see a specialist or have most medical tests or procedures without authorization either by the PCP or the HMO.

Preferred Provider Organization (PPO)-A health plan that contracts with various physicians and hospitals. Enrollees are offered a financial incentive to use providers on a preferred list, but many use non-network providers as well. www.bcbsnc.com/assets/glossary/p.htm  The difference between the PPO and HMO is that PPO’s have a wider network of contracted providers.  Additionally, most of them allow you to see no contracted providers, but you will have a higher copay.  PPOs still require having a PCP and authorization for many services.

Exclusive Provider Organization (EPO)-A plan that limits coverage of non-emergency care to contracted health care providers. Operates similar to an HMO plan but is usually offered as an insured or self-funded product. www.pohly.com/terms_e.html EPOs are often more restrictive than HMOs or PPOs with regard to the panel of physicians and providers available.  Their panel of providers is usually very local.

Medicare-A federally funded health insurance program primarily for people age 65 and older and the disabled. www.keppraxr.com/utilities/glossary.aspx Medicare is a Fee for Service model unless you attach it to an HMO.

Medicare HMO or Medicare Advantage- A plan offered by a private company that contracts with Medicare to provide you with all your Medicare Part A and Part B benefits. Medicare Advantage Plans are HMOs, PPOs, or Private Fee-for-Service Plans. If you are enrolled in a Medicare Advantage Plan, Medicare services are covered through the plans, and are not paid for under Original Medicare. www.medicare.gov

Medicaid-A federally aided, state-operated and administered program which provides medical benefits for certain indigent or low-income persons in need of health and medical care. www.montevideomedical.com/Pages/Page_05.htm Medicaid is a Fee for Service Model in most cases.

Please return for Part II of Health Insurance 101. If you have any specific questions, please ask in the comment section below. I would be happy to answer whatever I can.

Knowledge is Power.