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Insurance Claim Denials on the Rise across the U.S

A medical peer review for insurers is typically performed to determine whether the services provided by the treating physician to the patient were medically necessary. This is an important procedure which helps to identify and prevent insurance fraud. However, it is also essential to ensure that legitimate insurance claims are not denied. Unfortunately, studies show that over 50 million Americans having health insurance have been denied essential treatments for chronic diseases, according to a recent heartland.org article. Some patients are denied multiple times.

Insurance Claim Denials

Access Denied to Heart Attack and Hepatitis C Medications

CDC data says that every 40 seconds someone has a heart attack or stroke in the United States! As a result, more than 2 million people are hospitalized and accounts for more than 400,000 deaths among Americans every year. The CDC also says that 80% of premature heart attacks and strokes are preventable. Given these statistics, timely medical intervention and care have a significant role to play in saving valuable human lives. The heartland.org article goes on to mention how insurers often refuse to cover medications such as PCSK9 inhibitors that can reduce cholesterol levels in patients who face the risk for heart disease or stroke, claiming those drugs are very expensive. This is indeed distressing for patients and their healthcare providers.
A new study published in Open Forum Infectious Diseases highlights the fact that more than half of patients with hepatitis C are denied coverage by private insurers for life-saving treatments. The number of patients who are denied coverage by public insurance is also high. Research done by a team at the Perelman School of Medicine at the University of Pennsylvania found that DAAs (direct-acting antiviral drugs) that treat hepatitis C are costly (between $40,000 and $100,000) though very effective. Private as well as public insurers have restricted access to these life-saving medications because they are so expensive. While patients with evidence of advanced liver fibrosis and/or abstinence from alcohol or illicit drug use may be approved access whereas patients with chronic hepatitis C who are denied therapy experience progression of the disease and are at risk for developing liver complications along with adverse impact on organ systems other than the liver.

The study that analyzed data of 9025 patients from 45 U.S. states – 4702 of these patients were covered by Medicaid, 1821 had Medicare coverage while 2502 had commercial insurance. Among these, 35.5% were denied treatment.

  • Private payers had the highest denial rates – 52.4% of patients
  • Medicaid denied 34.5%
  • Medicare denied 14.7%
  • The denials increased across all insurance types during the study period (January 2016 to April 2017) from 27.7% in the first quarter to 43.8% in the last quarter.

Another study conducted in 2015 by Penn Medicine foung that Medicaid denied coverage for 46% of patients citing as reasons “insufficient information to assess medical need,” “lack of medical necessity” and “positive alcohol/drug screen.” The researchers suggest that the high denial rates may be due to the varying restrictions on reimbursments across the states. To improve access to hepatitis C drug across all states in the U.S., there should be more clarity regarding the reimbursement criteria of these drugs and lesser restrictions. Moreover, as a National Academies of Science, Engineering, and Medicine report points out, to eliminate hepatitis C in the United States, at least 260,000 patients with chronic hepatitis C must be treated yearly. If this goal is to be achieved, public as well as private insurers must remove restrictions to access effective hepatitis C treatments.

Health Insurers’ Policies to Control Costs

Health insurers developed many practices to manage costs, which have steadily restricted the treatments/services they will cover.

  • Insurers started requiring prior authorization before paying for certain procedures and medications; they started denying authorization based on their own determination that a particular treatment was not medically necessary.
  • They placed medications into various tiers with varying levels of coverage. They started issuing lists of drugs they would not cover except in rare, grim circumstances.
  • Insurers started adopting “fail first” or “step therapy” policies that required doctors to prescribe older, cheaper medicines for patients until those patients fail on those drugs before they could prescribe newer, more effective drugs.
  • Another policy is “Non-medical switching” that directs drug dispensers to provide a cheaper drug in the same therapeutic class which may have a different chemical structure instead of the medication the doctor prescribed.

Though controlling healthcare costs is indeed an important consideration for government as well as private payers, routine denials could put patients at considerable risk without access to the treatments they really need. As a medical review solutions provider to doctors and attorneys, we fully understand how distressing a denial or delay can be for genuine patients. Many doctors are disturbed about insurers making decisions that interfere with their ability to provide the best treatment for their patients based on their experience in the medical field and precise understanding of their patients’ needs. Patients recovering well on the right medications could face harm if they are forced to switch to another medication because of a payer decision. Many doctors also believe that appeals to insurers could be most effective when patients or their lawyers are involved. Meanwhile, it is everyone’s hope that drug makers will reduce the list price of their medications so that they can be made available to more needy patients.

 

     

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