Lambert here: We should bail them out. Obviously.
Jay Hancock, of Kaiser Health News. Originally published at Kaiser Health News.
Anthem Blue Cross, the country’s second-biggest health insurance company, is behind on billions of dollars in payments owed to hospitals and doctors because of onerous new reimbursement rules, computer problems and mishandled claims, say hospital officials in multiple states.
Anthem, like other big insurers, is using the covid-19 crisis as cover to institute “egregious” policies that harm patients and pinch hospital finances, said Molly Smith, group vice president at the American Hospital Association. “There’s this sense of ‘Everyone’s distracted. We can get this through,’” she said.
Hospitals are also dealing with a spike in retroactive claims denials by UnitedHealthcare, the biggest health insurer, for emergency department care, AHA says.
Disputes between insurers and hospitals are nothing new. But this fight sticks more patients in the middle, worried they’ll have to pay unresolved claims. Hospitals say it is hurting their finances as many cope with covid surges — even after the industry has received tens of billions of dollars in emergency assistance from the federal government.
“We recognize there have been some challenges” to prompt payments caused by claims-processing changes and “a new set of dynamics” amid the pandemic, Anthem spokesperson Colin Manning said in an email. “We apologize for any delays or inconvenience this may have caused.”
Virginia law requires insurers to pay claims within 40 days. In a Sept. 24 letter to state insurance regulators, VCU Health, a system that operates a large teaching hospital in Richmond associated with Virginia Commonwealth University, said Anthem owes it $385 million. More than 40% of the claims are more than 90 days old, VCU said.
For all Virginia hospitals, Anthem’s late, unpaid claims amount to “hundreds of millions of dollars,” the Virginia Hospital and Healthcare Association said in a June 23 letter to state regulators.
Nationwide, the payment delays “are creating an untenable situation,” the American Hospital Association said in a Sept. 9 letter to Anthem CEO Gail Boudreaux. “Patients are facing greater hurdles to accessing care; clinicians are burning out on unnecessary administrative tasks; and the system is straining to finance the personnel and supplies” needed to fight covid.
Complaints about Anthem extend “from sea to shining sea, from New Hampshire to California,” AHA CEO Rick Pollack told KHN.
Substantial payment delays can be seen on Anthem’s books. On June 30, 2019, before the pandemic, 43% of the insurer’s medical bills for that quarter were unpaid, according to regulatory filings. Two years later that figure had risen to 53% — a difference of $2.5 billion.
Anthem profits were $4.6 billion in 2020 and $3.5 billion in the first half of 2021.
Alexis Thurber, who lives near Seattle, was insured by Anthem when she got an $18,192 hospital bill in May for radiation therapy that doctors said was essential to treat her breast cancer.
The treatments were “experimental” and “not medically necessary,” Anthem said, according to Thurber. She spent much of the summer trying to get the insurer to pay up — placing two dozen phone calls, spending hours on hold, sending multiple emails and enduring unmeasurable stress and worry. It finally covered the claim months later.
“It’s so egregious. It’s a game they’re playing,” said Thurber, 51, whose cancer was diagnosed in November. “Trying to get true help was impossible.”
Privacy rules prevent Anthem from commenting on Thurber’s case, said Anthem spokesperson Colin Manning.
When insurers fail to promptly pay medical bills, patients are left in the lurch. They might first get a notice saying payment is pending or denied. A hospital might bill them for treatment they thought would be covered. Hospitals and doctors often sue patients whose insurance didn’t pay up.
Hospitals point to a variety of Anthem practices contributing to payment delays or denials, including new layers of document requirements, prior-authorization hurdles for routine procedures and requirements that doctors themselves — not support staffers — speak to insurance gatekeepers. “This requires providers to literally leave the patient[’s] bedside to get on the phone with Anthem,” AHA said in its letter.
Anthem often hinders coverage for outpatient surgery, specialty pharmacy and other services in health systems listed as in-network, amounting to a “bait and switch” on Anthem members, AHA officials said.
“Demanding that patients be treated outside of the hospital setting, against the advice of the patient’s in-network treating physician, appears to be motivated by a desire to drive up Empire’s profits,” the Greater New York Hospital Association wrote in an April letter to Empire Blue Cross, which is owned by Anthem.
Anthem officials pushed back in a recent letter to the AHA, saying the insurer’s changing rules are intended partly to control excessive prices charged by hospitals for specialty drugs and nonemergency surgery, screening and diagnostic procedures.
Severe problems with Anthem’s new claims management system surfaced months ago and “persist without meaningful improvement,” AHA said in its letter.
Claims have gotten lost in Anthem’s computers, and in some cases VCU Health has had to print medical records and mail them to get paid, VCU said in its letter. The cash slowdown imposes “an unmanageable disruption that threatens to undermine our financial footing,” VCU said.
United denied $31,557 in claims for Emily Long’s care after she was struck in June by a motorcycle in New York City. She needed surgery to repair a fractured cheekbone. United said there was a lack of documentation for “medical necessity” — an “incredibly aggravating” response on top of the distress of the accident, Long said.
The Brooklyn hospital that treated Long was “paid appropriately under her plan and within the required time frame,” said United spokesperson Maria Gordon Shydlo. “The facility has the right to appeal the decision.”
United’s unpaid claims came to 54% as of June 30, about the same level as two years previously.
When Erin Conlisk initially had trouble gaining approval for a piece of medical equipment for her elderly father this summer, United employees told her the insurer’s entire prior-authorization database had gone down for weeks, said Conlisk, who lives in California.
“There was a brief issue with our prior-authorization process in mid-July, which was resolved quickly,” Gordon Shydlo said.
When asked by Wall Street analysts about the payment backups, Anthem executives said it partly reflects their decision to increase financial reserves amid the health crisis.
“Really a ton of uncertainty associated with this environment,” John Gallina, the company’s chief financial officer, said on a conference call in July. “We’ve tried to be extremely prudent and conservative in our approach.”
During the pandemic, hospitals have benefited from two extraordinary cash infusions. They and other medical providers have received more than $100 billion through the CARES Act of 2020 and the American Rescue Plan of 2021. Last year United, Anthem and other insurers accelerated billions in hospital reimbursements.
The federal payments enriched many of the biggest, wealthiest systems while poorer hospitals serving low-income patients and rural areas struggled.
Those are the systems most hurt now by insurer payment delays, hospital officials said. Federal relief funds “have been a lifeline, but they don’t make people whole in terms of the losses from increased expenses and lost revenue as a result of the covid experience,” Pollack said.
Several health systems declined to comment about claims-payment delays or didn’t respond to a reporter’s queries. Among individual hospitals “there is a deep fear of talking on the record about your largest business partner,” AHA’s Smith said.
Alexis Thurber worried she might have to pay her $18,192 radiation bill herself, and she’s not confident her Anthem policy will do a better job next time of covering the cost of her care.
“It makes me not want to go to the doctor anymore,” she said. “I’m scared to get another mammogram because you can’t rely on it.”
Last time i looked on NYS Health Marketplace,
Anthems premiums were astronomical compared to other health insurers.
And they provided no better coverage – whether it was bronze, silver or gold .
Just look at out of pocket costs for each getting back into high deductible quietly
The insurance cartels set and cede their pricing based on geographical demographics. Cigna will dominate the NE markets, Anthem the midwest and so on. BCBS have explicit rules that prevent affiliates from bidding against each other based on home geographies, kinda like the early baby Bell’s.
They bid discounts against historical claims so there is no way to really know what future costs will be. They only area they “compete” is in the “new” narrow networks where they are essentially dis intermediating the physician networks to control diagnoses, treatment and pricing by integrating their platforms into theirs. Coming soon will be algo / AI driven “choices”. I’m quite sure many of these “payment” issues would miraculously be resolved by having the healthcare delivery system in question migrated onto their platform.
When asked about lowering or controlling costs, they have zero interest, or motivation, to lower insurance costs. It’s all about “wellness” programs and restricting actual healthcare services. They will flat out tell you that best practice is to manage to low single digit annual increases in costs. Their fees are on top of actual claim fees and amount to high single digit percentages of claims, however, they are not directly tied to claims, so they have zero incentive to manage them properly. It is interesting the comments made below have a high percentage of rejected claims and seem biases against the healthcare consumer. They also play the opposite game against the self insured corporate client who has to hire one or two layers of claim processing validation to prevent high percentage of pass through claims, which conveniently, the insurance companies are now acquiring.
These are humongously profitable institutions. Anthem’s profits are noted above, $3.5BB first half, but United makes $5BB per quarter. . Cigna was only able to muster up a measly $1.5BB in Q2. And this is just the nosh they are sending back to investors. The bloat in these companies is unreal. But hey, business is looking good:
The results beat Wall Street’s earnings expectations and UnitedHealth executives said investors can expect the good news to continue with the company raising its earnings guidance for the rest of the year “based on initial 2021 business performance trends.”
In the past concern about hospital reimbursements was one of the fig leafs the AHA used against the possibility of single payer or M4A. I know since Pollack has been in charge the AHA has been looking askance at health insurance providers. And although he makes pretty good money, (check the publicly available 990’s IIRC) it probably stings personally that health insurance CEO’s salaries dwarf Pollack’s salary. Since all that money that health insurance providers rake in could go to care, maybe the AHA is starting to see the light that government could do hospital reimbursements better. Granted, the government may or may not reimburse as much under single payer or M4A but you know… half a loaf and all that.
Anthem BCBS denied coverage for my Injectafer infusions that I got early this summer. That is an IV infusion of iron for extreme anemia. I have a malabsorptive condition in which I cannot absorb dietary iron. My last infusion was in 2018 and went through with no problem. This time, despite the fact that I CANNOT ABSORB FE through my guts, they have declined to pay for the several thousand dollars of rusty water because it is not on my chart that I took iron supplements for 6 months before treatment (which I did by pure virtue of FE being included in my daily multivitamin).
I have been treated for this anemia since 2011. Now after 10 years, they want to say they won’t pay despite an extensive medical history of malabsorption. I will work with the hematologist’s billing department to see if they can help but they have much bigger and more expensive worries than me (he mostly does cancer patients, which I am not). If they cannot, its an appeal to the VA Bureau of Insurance, where I once worked in 2005-06 so I know some tricks to help get the appeal moved along. It’s going to be a nightmare trying to get this straightened out this month.
But oh, god forbid we had a single payer system like M4A – then some anonymous bureaucrat might get to decide whether or not I get the treatment I need to be healthy and productive in my life. It would be limit my freedom. /sarc
Sorry… a bit cranky to get that news on a Friday evening and have all weekend to stew over it.
Sorry to hear about another failure of the medical insurance Grift.
Let me assure you that M4A isn’t intended to be a “single payer” system. Current Medicare needs to recieve a major overhaul before it could begin to approach a single payer system. Current Medicare only covers 80% of approved medical costs; each person must then purchase “approved” providers to cover the next 20%. Extending this system to ALL would only extend the need for clairvoyance (See:Lambert Strether.) in selecting an insurer to cover your future (mostly unknown) medical bills.
Is this not wire and mail fraud ?
The patient must be dead, and the parasites are turning on each other. When does the countdown to ACA 2.0 start?
If past is prologue I’m pretty sure that Trump will run again on the platform of overturning the ACA.
And if he gets elected, then Stephen Breyer can retire from the Supreme Court so Trump can fill the seat, assuming the Senate approves which of course it will.
$18,000 for a radiation treatment. I wonder how much this costs in, oh say, Canada. Can we specify that the greed of the insurance industry is fully matched by the greed of the medical industry and we the public are caught in the middle of this seamy fight.
Meanwhile the Congress is of course in favor of greed on all sides as long as they get a taste.
Typically, I’ve discovered that if you divide the bill by ten, then you get an approximate cost in other [real] democracies…. Applies to treatments, drugs, admin fees.
“Obama to Single Payer Advocates: Drop Dead”
Physicians for a National Health Program (“PNHP”)
March 3, 2009
Says it all in a single phrase.
Anecdata: Aetna seems to have joined in the fun. Out of the blue, I’m suddenly getting denials
for an outpatient procedure almost a year ago.
Oddly, there is no software glitch causing `challenges in promptly paying’ executives and board members.
I was involved with the health insurance industry tangentially between 1987 and 2000. I saw the egregious claim rejections. Fantastic stories to tell from the podium to rile up consumers! And in my experience, the pacesetter here was UHC.
In the last 20 years there’s been a steep increase in denials of death claims by life insurers. Claims analysts are told to find some basis, any loophole, however flimsy, to refuse to pay. Even if the premise for denying the death claim reeks of bollocks the insurer can still save 50 cents or more on the dollar by settling a contested claim before it goes to litigation. Some carriers are much more aggressive than others in this context. But even the ones that rarely refused a claim in the 20th century are not so generous any longer.
Rule #1to minimize this risk: when you apply for coverage, answer the medical questions as succinctly as possible. Never tell them anything you weren’t specifically asked about. Never embellish your answers to showcase your acumen. Like the man said: you’ve been warned!
Yes, anything you say can and will be used against you.
This smells of private equity profiteering. Especially when you note some larger hospitals in a plan are being paid while others are not. Closing down smaller more rural ones who can’t keep up. The notion of out pt care is not backed by any evidence. The only advantage is to the doctor groups involved with them and the insurers. Again-a private equity game.
I personally was trapped in a non payment of claim no approval, no denial. Was sent to collections but discovered that a new department in California. (20years ago) agreed to help. In a week everyone was paid and a couple months later it was reported that many subscribers had the same thing happening. The company closed and pulled up stakes.
Bad players everywhere in the health industry.
I was told that due to covid a 40 min cleaning of a procedure room was required that this requirement is expensive. My question to them, “what cleaning procedure were you using prior?” No wonder MERSA is so in hospitals.
Anthem pulled the same thing on me back when I lived in California, and the hospital billed me for 15% of my annual income. Luckily, I had already maxed out my out-of-pocket, and it was in the next year. But I guess they feel there is no harm in trying! Somewhere in management, there must be a stratum that formulates the ripoff policies and disseminates them to staff.
Anthem had just been fined by the state for slow-walking grievances past the 30 day limit, so I thought it would be a good time to file a grievance to set them up to pay another million in fines. On Day Thirty a young Anthem staffer on speaker phone called me, and blurted out, “We didn’t do anything wrong!” Like LBJ said, I just wanted to hear them deny it. I got the hospital VP to send me a letter saying I didn’t owe anything; when they billed me again the next month, all I had to do was leave a phone message for her to do it again. These people are just racketeers, and victory was sweet — imagining what it would be like for someone sicker and without knowledge of their rights in such a situation was very grim. Anthem left the market the next year.
It has always been like this. A blatant extortion racket played against desperate people. This is so obvious now and the profiteers are so entrenched that it will probably require a constitutional amendment. One part to provide health care for all, single payer; and another to explicitly forbid “health insurance” rackets from existing. Anywhere. Ever.
Is anyone trying to organize a medical debt strike? Like instead of an online petition, signers pledge that once we have 2 million pledges we will all simultaneously stop paying medical debt and bills and crash the system until they forgive most of it?
And would that be legal or could it be considered a conspiracy?
Perfect idea. Protesting, writing congress people, making phone calls – never works. Strike is the only answer. It can be tough striking, but when the money flow stops, big spenders listen.
Voting fails because the people most likely to vote in primaries (older, more affluent) are also the least likely to have high debt to asset levels, and are the most indoctrinated by Cold War propaganda about the virtues of capitalism.
Is this why CalPERS is bailing out the Blue Cross and Blue Shield HMOs at the cost of Kaiser and others?
Feature not a bug. A few weeks ago I mentioned to a group of pre-clinical medical students that their chosen profession has become primarily a wealth extraction mechanism to squeeze the last drop of money out of those least able to afford it, and they are the ultimate target. Half of them agreed. The other half sputtered. Denial ain’t just a river in Egypt.
Yes, the MBA’s at the hospitals will start squeezing the doctors next. They’re already stiffing the nurses with meager raises.
I remember a claims processor for a big health insurer or reporting this motivational poster on the wall of their workspace:
“It’s a shame to pay a claim.”
My advice, buy the book NEVER PAY THE FIRST BILL by Marshall Allen. Do not let the scammers win. This rampant corruption will impoverish us all.
Hi Lambert, a subject to get my blood pressure up this lovely Sunday! Imho, this is now insurance. I practiced insurance defense until I left due to chronic illness. (I don’t miss it..) Enormous profits are generated by just saying “no” to claims. The Royal Globe case in CA (1979) was based on stopping terrible (bad faith) general business practices, which is what we have now with health insurance companies, but on steroids. When Royal Globe was overruled in 1988, it seemed (to me) to be an issue of overreach by a plaintiff whose case could have been dismissed, but alas, gifts to business were off and running and Royal Globe was denounced. No more “unnecessary litigation”. Now we have mandatory arbitration. What health insurance companies are doing imo is simply awful unfair corrupt business practices with nothing at all holding them to account. Thievery. I used to envision two claims adjusters sitting in a room with two phones and a script saying “no”. If you were the company lawyer, they’d tell you to say no. If you have claims issues now, you need an advocate, particularly if you’re ill. I can negotiate this idiocy fairly well, despite illness, but I feel terrible for people who are ill and overwhelmed. The other issue (and I’ll stop) is note hospitals write off the difference between what they charge and what they’re reimbursed, so Joe Taxpayer subsidizes them. So I’m not crying for the hospitals. (Other lawyers, of course, may have different views.)
I had an experience 2 years ago when I went in for my “free” wellness visit. The insurance company did not pay the bill and the doctor’s office (thru their billing service) sent me the bill w/ no explanation. I saw from the bill they had added extras that the insurance company refused to pay. In addition. the insurance company said that the practice had not informed the insurance company about my doctor being part of the practice. I called the insurance company and explained to them that I was going to the doctor who was part of the practice. I extracted a committment from them for the invoice pay date (3 months after I called them!). After more than a year I received the same bill from the practice. First, I ignored it (as I had not signed anything that I would pay them if insurance didn’t). I received the same bill again 3 months later. This time I called the insurance company to find out why they hadn’t paid the bill. They wanted the practice to call them (as though they couldn’t call them!). I wrote to the practice and told them to call the insurance company.
To avoid your credit rating being affected, please communicate everything in writing. Confirm the conversation in writing if you do call them. Do not sign any paper that says you will be responsible for the bill if you’re using insurance. Fight every bill.
The whole setup with insurance companies, physician practices and hospitals stinks to high heaven. Insurance companies, physician practices and hospitals all collude to hose the consumer. They were originally cozy with the relationship but each party has gotten greedy. We need an agency to police their activities. The state insurance commisioners are in the pocket of these crooks.
Excellent advice, Oh. And so true. Just an aside, but iirc, they have (or used to have) 90 days to process a claim. Many times they’ll send the claim back to the physician stating it’s the wrong code, etc. (Another kicker is “We approve this, but that doesn’t mean we’ll pay for this.” Anything to keep money in their pockets.) And remember, we pay big bucks for this privilege of angst ridden documentation and fear of ruined credit. Years ago I was encouraged to participate in a brutal clinical trial of high dose chemotherapy for aggressive cancer. A few months in, I showed up and was told that the insurance company refused to pay because it was experimental. I told them either the doctor who got the initial ok was paying or the insurance company was. Talk amongst yourselves. That was the end of the discussion. Sadly, I believe that would be much more difficult now.
Another point that may be helpful: Employers often run their own health insurance plans, and use the insurance company as a “storefront.” The law allows employers running such plans to keep a certain percentage of any annual profits, and coverage denials for certain technicalities may be partly due to your employer. I found this out by accident, and it turned out to be crucial to my ability to appeal.
I spent a lot of hours during my time as a nurse, “working the system” as they say, to get medication coverage and approvals for necessary prescribed therapies and durable medical goods like prosthetics and wheelchairs for the patients of the doctors I worked for.
My characterization of the initial contacts with “UNsurance” corporatocracies, once I got past the telephone-tree thicket to speak to a human, was “Department of Denial, how may we not help you.”
UNsurance, because you are UNsure what your costs will be, UNsure whether your prescribed and needed meds will be “on formulary” a week from now, UNsure whether your doctor will be “in network,” UNsure whether you will will be retroactively kicked off your UNsurance altogether for some specious reason…
Just recently had my first denial – I have anthem and fortunately have hardly ever made a claim. However went to get a flu shot recently and it was denied. Turns out they are now owned by some entity called “caremark” that also owns cvs, so they only cover shots given at cvs these days…
Back in 2013, a close friend and her first husband were headed to DC to see Obama’s second inauguration. Before they left Tucson, she thought it would be a good idea to go over to the CVS for a flu shot. And that she did.
In her words, she got sick as [family blog].
She did recover in time to make the trip to Our Nation’s Capital.
A few years ago, she got an unexpected check in the mail. It was in the amount of $40 and was from CVS. The reason: That flu shot.
My friend will never, ever get another flu shot.
A slogan I would like to see on tee shirts and bumper stickers:
Health Insurance is Fraud
Once claim resolved – should one that should have reimbursed a hospital carry a 29% carry fee to be paid to the hospital?? A parallel With penalty rate credit cards, and deliberately new delays in postal service service times, seems like more people are going to be penalized.
How about one where a patient is not reimbursed but should have been — how about a 29% penalty and triple damages to cover the time in correcting billing?
Seems fair but, then, the big rough tough business boys and girls won’t get their playtime and nappies.