Behold another entry in the arcana of insurance fine print: retroactive denial. nnYour insurer OKs a procedure: we all the know the importance of getting prior approval before any procedure, whether diagnostic, surgical, or rehabilitative. Big Insurer must OK that regimen beforehand, or Big Insurer won’t pay. Except — maybe — for childbirth, prior approval governs. A decade ago, we clueless enrollees might not have read the fine print that described prior approval; but by now we, and our referring physicians, know.
Retroactive Denial introduces a twist. Big Insurer can say “yes,” then change its decision to “No.” “The “No” will come after you have had the test, undergone the surgery, done the rehabilitation, taken the medication. And once the insurer says “no” retroactively, the Insurer gives you, as well as your provider, the total bill. It is legal, and, from the insurer’s vantage, easy.
Thank you, Kaiser Health News, for alerting us to this twist in insurance arcana, one more reason to buy a magniffying glass to study your policy. (Feb. 7, Lauren Weber, “Patients Stuck with Bills after Insurers Don’t Pay as Promised”). We should use magnifying glasses anyway to discover the caveats about pre-existing conditions, limited formularies, limited networks (they change, so you need to make some verifying phone calls), and non-covered conditions. Add “retroactive denial” to the list.
Consider the hapless patient, Darla Markley, a 53-year-old woman from Wisconsin. Her bill, post procedure, post denial: $34,000.
The reasons for retroactive denial are legion. Some are obvious: a third party insurer has already paid the claim, so the new claim amounts to double-billing; and the insurer is entitled to recoup the money. The patient never received the treatment, but the provider billed anyway. That is fraud: the insurer again is entitled to recoup the payment (and the provider may face harsher penalties than the insurer’s demand for repayment). The claim had an error in coding; but the provider could re-submit the claim. The insurer judges the procedure not truly necessary; but if the insurer has already said “yes” in a prior approval, that later “not necessary” can lead to heated arguments on both sides. Or the patient had let the premiums lapse. Obamacare for policies sold under the exchanges allows a three-month grace period for lapsed payment. In the first month, the insurer must accept all claims; in months two and three, the insurer must notify the provider that the claim may be denied. Of course, that protection applies only to individual and family policies sold under the Obamacare exchanges. Some states have tried to pass legislation (e.g., Florida) that would extend those protections to other policies. Understandably, physicians have supported that kind of state legislation. Understandably, insurers have opposed those restrictions.
Over the past five years, “retroactive denials” have surged, along with the surge of requests for prior authorization. Those authorizations often state: This “yes” does not guarantee payment - a legal loophole worthy of George Orwell’s newspeak. And the need for prior authorizations now encompasses medications, even renewals for medication. Physicians and insurers alike are awash in computer-generated back-and-forth missives. Whatever savings that insurers reap should be weighed against the administrative costs of wrangling over decisions made, decisions regretted, decisions appealed.
Into this Orwellian mess stepped Ms. Markley. In 2009 after a month in a Wisconsin hospital with a diagnosis of transverse myelitis, her physician ordered a series of tests at the Mayo Clinic. Blue Cross approved the tests. In the meantime, another test showed a vitamin deficiency, beriberi. Blue Cross then ruled that the Mayo Clinic tests, though pre-authorized, were not necessary. The bill dogged the family into bankrupty five years later. They lost their home. Social Security and disability did not suffice.
The Orwellian lesson: sometimes “yes” will translate to “no.”
Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email retsinas@verizon.net.
From The Progressive Populist, April 1, 2020
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