Doctors Fight Unfair Payer Tactics; Is It Working?

Christine Lehmann, MA

December 22, 2021

Physicians throughout the country are mired in battles with insurers who seem to be finding new ways to try to avoid paying them. Many are fighting back in different ways; some are more successful than others, and each has its pros and cons. Would any of these methods work for you?

  • Barbara McAneny, MD, says she hires "pitbulls in high heels" to work prior authorizations and get payment for her practice. "The successful practices are very good at tracking denials and fighting them. We've fought things all the way to Medicare administrative law judges, which in one case took nearly 3 years, but we eventually got our money," says McAneny, former AMA president and CEO of hematology oncologist specialists in Albuquerque, New Mexico.

  • Attorney Steve Cohen, JD, at Pollock Cohen, LLP, in New York City, says he is representing a physician who performed 20 procedures more than 10 months ago that he says Emblem Health approved but never paid for. Since this violates New York's prompt payment law of 30 days, the doctor can now charge his full $5000 procedure fee plus 12% interest instead of Emblem's negotiated rate of $1800 for each procedure, says Cohen.

  • An attorney at Duane Morris, LLP, says his firm is helping doctors in 26 states to recover payment from insurers. "Payers appear to be unilaterally deciding what the appropriate payment is and then coming up with a basis for that to reduce or deny the benefit or payment of that service," says Greg Brodek, JD, chair of the health law practice group and head of the managed care litigation practice. "This practice is incredibly widespread. We have at any given point in time $100 to $300 million dollars in claims against payers that we're pursuing on behalf of doctors in private practice."

Brodek says that most of the legal actions he has taken in the past few years on behalf of doctors have been against United Healthcare, followed by Anthem and Aetna. Legal actions include demand letters, mediation, arbitration, and lawsuits, as a last resort.

These battles are paying off for doctors. "We have settled the vast majority of legal actions over the last 10 to 15 years, recovering more than hundreds of millions of dollars for our clients," says Brodek.

McAneny says that hiring extra staff to pursue insurance payments has paid off financially.

Preauthorization No Guarantee of Payment

Many physicians have probably glossed over the brief disclaimer on preauthorization forms that says approval is not a guarantee of payment.

The disclaimer's original intent was to allow payers to say beneficiaries were not eligible for benefits if they disenrolled from the plan or obtained different insurance between the time of precertification and the procedure, says Brodek.

"But, now it has been transformed into a far broader discretionary phrase that allows payers to say you're preauthorized, but now that we've looked at the claim, we've decided it was experimental, not medically necessary or not a covered service, or many other reasons they give for denying coverage that they didn't do historically."

He doesn't think many of the actions payers take under the prior authorization umbrella are legally permissible. "I spend a lot of my time pushing back on behalf providers who have gotten an assignment of benefits for patients who are now being told, 'Oh, Part B drug injections under your Medicare Advantage plan are not covered, and we will not pay you, the provider.' We go back to the payer and say these were prior authorized by you and you denied them; you do not have the right to do that under the contract, benefit plan or state law."

Another troubling trend is prepayment reviews, which can significantly reduce doctor's income, says Brodek.

A common practice is to review the level of evaluation and management codes that doctors bill and then "down-code" them to a lower and cheaper level of service.

Brodek says that he's representing at least 1500 doctors in a consolidated legal action to recover a total of $18 to $19 million dollars in claims reductions over 18 months from one insurer whom he declined to reveal. He says consolidating multiple plaintiffs into one action is far more efficient than filing class action lawsuits.

Another way doctors' payment is reduced is when insurers drag out the payment process by requiring patient's medical records or other documentation be submitted manually with claims. Once the insurer receives the paperwork, they can determine whether the claim is appropriate, should be reduced or refiled, or whether more documentation is needed, says Brodek.

"That process can take anywhere from 6 to 12 months, at which point the provider gives up and just says, 'Pay me whatever you think is appropriate,' " says Brodek.

Fighting Prior Authorization Denial Is Costly

McAneny's practice has a staff of 230 people that includes 20 doctors and other providers. The practice employs 10 full-time staff who work only on prior authorizations, in addition to the 20-person billing office that deals with about 40 insurers regularly.

Dr Barbara McAneny

"Although it's expensive, it is worth it. If we don't have staff doing it, then the doctors must do it, which means they are not seeing patients. I don't want my most expensive employee doing that work, which includes sending hundreds of records by fax to the insurance company. The alternative is not to do it, and then patients don't get treated!" says McAneny.

Dr Daniel Edney

Daniel Edney, MD, an internal medicine and addiction medicine physician with Medical Associates of Vicksburg, Mississippi, says, "We're paying a lot of overhead to deal with prior authorizations, insurance denials, and getting medications approved."

His 11-provider practice, which includes four physicians, deals with nine insurers regularly. Pursuing prior authorizations is so time-consuming that he had to hire two more full-time staff just to focus on that. That's in addition to the time spent by two administrators.

"We have to be aggressive and strategic. That's why we have employees trained to identify these issues and know which buzzwords to use and boxes to check so that it will pass an initial review," says Edney.

McAneny engages in peer-to-peer reviews with insurer-hired physicians when benefits are denied. She did 21 of these reviews over 12 days in 2020 and had a 75% approval rate, according to August 2020 data she submitted to the AMA.

But, scheduling these reviews is done at the convenience of the insurers, not the physicians. "If I miss a scheduled appointment because a patient visit runs longer than expected, the appeals process starts over again, adding more time to get prior authorization. What kind of priority is that when I interrupt talking to a patient to go talk to an insurance company?"

An AMA 2020 survey of 1000 practicing physicians found that the average practice engages in 40 prior authorizations a week and that physician offices spend the equivalent of two business days a week completing them. In addition, 85% of participants reported a high burden associated with prior authorizations.

Insurers are also changing their criteria, processes, and rules monthly, according to Molly Smith, group vice president for public policy at the American Hospital Association. This creates a bureaucratic nightmare for practices dealing with multiple insurers.

They simply can't keep up with all the changes and then make mistakes because they submit a prior authorization request based on last month's rules, says Smith.

"There are plenty of times when they kick back a lab because they changed the ICD-10 code they had approved for months before. The only way we found it is when they deny a claim," says Edney.

Brodek says that payers' contracts have provisions stating that providers will agree with their policies and procedures. "Insurance payers have gotten very smart; instead of amending their contract, they make unilateral changes to a policy or procedure that providers then have to comply with."

Providers often learn about a policy change when the billing office notifies them 6–12 months later that their payments decreased exponentially and that's why, says Brodek.

Driving Doctors Out of Business?

Not every private practice can afford to hire additional staff, says Brodek. "It's become very difficult for solo practitioners to stay in business unless they have some super-specialty where they can dictate a fairer relationship to the payer. Otherwise, if you're a primary care doctor or a hospital-based anesthesiologist, pathologist, or radiologist, you have no leverage."

But, even private practices that have extra staff to deal with insurers are feeling the financial impact. "In a physician-owned practice, the bottom-line is the owners get paid last, which means doctors make less money. That's a problem because it's hard to compete with hospitals who can afford to pay providers a lot more than I can as an independent fee-for-service practice," says McAneny.

Fewer doctors (49%) are working in private practice than in years past, WebMD reported last May. The results of the AMA 2020 survey also showed that more doctors are working in large medical practices and in hospitals.

Insurer Industry Responds

David Allen, a spokesperson for the trade association America's Health Insurance Plans, commented on prior authorization practices in a statement.

"Prior authorization helps ensure that patients receive care that is safe, effective, and necessary."

Less than 15% of covered services, procedures and treatment require prior authorizations. Insurance providers only use prior authorization in certain circumstances, including for those prescription drugs and services that require special care such as where the risk of addiction looms large such as opioids for chronic pain, where drug-drug interactions can be dangerous, and where unnecessary treatment can be harmful such as "inappropriate diagnostic imaging such as CT scans for back pain."

In these limited circumstances, prior authorization:

  • Protects patients and prevents the overuse, misuse, or unnecessary (or potentially harmful) care

  • Ensures care is consistent with evidence-based practices

  • Can help lower a patient's out-of-pocket costs

"We know that prior authorization can be improved. We can balance efficiency and evidence with safety and necessity. We're committed to reducing unnecessary burden, increasing patient satisfaction, and improving quality and outcomes."

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