Wednesday, August 24, 2011

Health Insurance Reform Won't Work Without Insurers, but Significant Administrative Improvements Needed

Is there any way to lower health insurance costs and improve quality of care besides reigning in over-utilization of services, cutting back on covered services and increasing patient responsibility?  The answer is an yes.  Let's look inside the health insurance industry and reduce the administrative burdens that keep providers and consumers from ensuring that the best and most appropriate, necessary care is provided.  I believe as much as anyone that the insurance industry is vital to Connecticut's economy and future, but it's time to pull out the calculators and health experts to scrutinize health insurance practices to drum up some additional savings.  Insurers have made many statements about the need to find savings in healthcare; I'm ready for them to contribute some of their own savings.

Where have we been in terms of looking at the bottom line--that insurance is a contract, a obligation on the part of insurers and consumers to follow rules that will allow those consumers access to coverage of medically necessary services?  Why have we allowed these administrative burdens to prevent access to care, to make it difficult to appeal a denial, to force providers to have to argue for days to justify treatment that they, much more so than any medical director of an insurance company, know is the best treatment.

This is not hypothetical.  In the last fiscal year, OHA recovered $11 million for consumers.  That's $11 million in wrongfully denied claims based on medical necessity, coding errors, and billing mistakes.  That $11 million represents people who went without needed cancer treatments or mental health services because the insurance company denied the care initially.  That's $11 million that should have been properly spent on medically necessary care that could have forestalled additional healthcare costs down the road.  That's $11 million of state residents' insurance premiums that without our intervention would have stayed in the pockets of the insurers.  And finally, that $11 million is a fraction of what could be recovered if all consumers knew how to appeal denials successfully.

It is not coincidence that there isn't more recovered for consumers. Only five percent of people appealed denials related to medical necessity last year  That is not a coincidence either.  The process is not easy to go through on one's own.  That means there is likely a substantial sum of our premium dollars that is going unspent on needed medical services that, if received, might actually lower future healthcare costs.

Every day I hear from providers whose services are routinely denied, only to be overturned after going through the burden of appealing.  Each insurer has its own provider guidelines--one plan's guidelines or practice requirements may completely contradict another's.  These burdens only serve to impede access to care and strike at providers' resolve to fight via an appeal.  These administrative burdens, imposed by insurers, add significant costs to the healthcare system.

As we move toward the healthcare reform, we need to revisit our mindset.  What is our focus?  Healthy individuals, cost containment, efficiencies, health information technology?  Surely all of these things play a role, and surely, the insurance industry is vital to providing insurance coverage, but it is the insurers who have yet to open the books and offer more than their products.  They must come to the table with their own solutions for streamlining processes, reducing administrative burdens and preventing improper initial denials of coverage.  They must prove to me and other advocates that the premium dollar is going to its intended purpose and not being used to thwart legitimate access to services through burdensome and inconsistent processes. 

I don't blame the insurers for wanting to hold their partners accountable, but we need to hold the insurers accountable too.  I believe we need a strong insurance industry in Connecticut. Accountability is not anathema to a strong insurance industry in Connecticut. It is essential to it.


  1. Insurance policies designed to pay for Long Term Care will cover claims that normally will be denied by other medical insurance plans including Medicare.

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