Beware: Health Plan Policies that Reduce Payments

The rising costs of healthcare continues to be a widespread theme that all healthcare constituents are talking about. Stakeholders from all corners of the healthcare industry are making decisions every day to save money where they can, and no stranger to this common effort to cut back on costs are insurance companies. Payors across the country have implemented a variety of new policies that change the way they pay healthcare providers. This is a trend we’ve seen in many states, and year after year, more policies are popping up and more and more payors are taking note and jumping on board.

Even if these new policies haven’t affected your system yet, all providers need to be aware and prepared for when they do – because it’s only a matter of time.

Here are a few of the top recent payor policy changes to watch out for:

Ambulatory Sites

Anthem Blue Cross Blue Shield has made headway in the effort to push patients outside the typical hospital setting for care, one example is a policy implemented in 2017. Anthem now requires that unless it is dangerous for the patient, all imaging services must be done at an outpatient facility. Dr. Christopher Stanley told Bloomberg Law that this new policy would not only impact hospitals’ bottom lines, but could encourage patients not to return to the hospital setting for additional testing or services (Becker’s Hospital Review).

Anthem’s vague exception to the policy, “unless it is dangerous for the patient,” means that if the payor will approve the service to be done in the hospital – if moving the patient would delay healthcare or endanger their life. Still, we have seen that many of Anthem’s third-party reviewers continue to dismiss case-specific complexities and deny these exceptions, and even send patients to sites with lower quality staff or equipment (Radiology Business).

The American College of Radiology has opposed this policy from the beginning, and the AMA has stated that it will cause disruption in the relationships between patients and their providers (Radiology Business).

According to Radiology Business, UnitedHealthcare has adopted a similar policy that went into effect in January 2019. The policy states that United will review the care site for certain CT and MR imaging services and push patients to utilize outpatient facilities. United’s new plan will supposedly “minimize out-of-pocket costs for its members.”

Emergency Care

Anthem in also leading payors in another new policy, related to emergency care.

In an effort to reduce the number of unnecessary Emergency Department visits, Anthem will no longer cover ED care if the payor later determines that the patient was not actually experiencing a “medical emergency” under the “Prudent Layperson Standard.” Now patients are required to analyze their own symptoms, and decide whether to seek emergency treatment, knowing they could potentially be slapped with the entire medical bill – or take a potentially life-threatening risk and stay home. In other words, Anthem is asking patients to play doctor. This scenario became a harsh reality for a patient in Frankfort, KY, who sought emergency care while experiencing excruciating stomach pains. After her final diagnosis, Anthem decided that situation was not in fact an “emergency”, and passed along a $12,569 bill (CBS News). Even in some cases like gunshot wounds and possible amputation scenarios, Anthem has found a way to withhold its payments and put the financial burden on its members and making providers play debt collector. In 2018, The American College of Emergency Physicians and the Medical Association of Georgia sued Anthem over its emergency department policy (Healthcare Dive).

In March of 2018, United adopted a similar policy in an attempt to cut down on expensive claims (Healthcare Dive).

 Are we seeing a pattern yet?


Aetna was one of the first companies to ink a strict policy around readmission denials, but over the past few years, more and more providers are following suit. Aetna’s policy states that the payor will deny coverage for patient readmission to the hospital within 30 days of discharge, according to Becker’s Hospital Review.

There is large controversy around these penalties because readmissions are often “affected by factors unrelated to hospital care quality” (Society of Hospital Medicine). Lakeland Regional Health has taken a stance against this policy and sued Aetna for more than $1 million for denying claims for patients, many of whom “are chronically ill with many comorbidities,” according to Becker's Hospital Review. Aetna moved to dismiss the lawsuit, claiming the policy “intends to improve healthcare quality for its members.”

These are just three examples of some of the most common policy changes. ReviveHealth has seen many other questionable and underhanded ways that payors have tried to cut back on payments. For example, many providers have complained to us about payors using retrospective audits for claims, and without logical reason, deciding that a provider didn’t code a patient accurately, and then “downcode” the service so that the payment owed to the provider is reduced. We also recall when CNN reported last year that an Aetna medical director admitted to denying claims without ever looking at a patients’ records.

In order to avoid losing millions in payments, it’s vital that providers keep an eye out for these policies and ensure their payor contracts protect them from these behaviors. The right contract language can potentially serve as protection against future language or policy changes too. 

Be sure you know exactly what’s in your contract and avoid any vague language – especially around any possible policy or benefit changes. Make sure all clauses are spelled out clearly and thoroughly from the start. Include language in your contracts that requires a certain period of time for notice of any new policies being implemented and a course for mitigating action.

Take it a step further and include documentation that specifically spells the policies that some payors are practicing and put it in writing that your system will not agree to such policies. By making sure your standpoint is on the record, and you can better protect your health system.

As always, ReviveHealth is prepared and ready to assist your hospital or health system on whatever your unique needs may be. We are well equipped to help you navigate the tricky waters of payor relations and can support your system on all things related to communications and payor/provider relations.

August 13, 2019
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