Last month, the CEO of UnitedHealth was murdered in New York City. There was an associated outpouring of comments on social media related to that. Most of those comments suggest that there is a lack of knowledge about the insurance companies approval processes.
There is sometimes a perception that things are either approved or disapproved. It should surprise no one that it is more complicated that that.
The approval process includes gathering of information for the insurance companies. That information is then sent to them. They have certain criteria that need to be met. If those criteria are not met by the requestor, a denial is likely to follow. In these instances the process does not involve any medical caregivers. They are handled by staff members.
The good news is that there is an 83 percent approval rate for claims. Unfortunately that means that there is a 17 percent denial rate. That is clearly higher than we would desire. In Delaware, the denial rate is a little lower at 14.9 percent.
Of those denials only 10 percent of them are ever appealed. When an appeal does take place, it has an 80 percent approval rate. So if we do appeal, it is usually approved. Clearly one issue is that we do not do enough appeals.
One might wonder why more denials are not appealed. In some instances it is because the requesting provider does not feel it will be approved anyway. In some instances it is because the approval process will take too long for the patient’s needs. In other instances it is because the provider does not have sufficient staff with the time to do so. It is complex.
Let me provide a personal example. Most years in January we switched State Medicaid insurance companies. Each of them had their own drug formulary. If we had a patient on a medication that was not on their formulary, we had a choice. We could switch to an approved medication or appeal the decision to keep our patient on the medication they were already taking.
Most years is was a formality. I would have to fill out paperwork on all my patients on a particular medication and it would be approved. The appeal process took some time. However, it was pretty much 100 percent approval.
One year, as usual, the Medicaid insurer told us that a certain medication was not on their formulary. It was a medication that had a short acting form that did not work for ADHD and a long acting form that did. They wanted us to take out patients off the long acting preparation and put them on the short acting medication. I filled out the denial request form as I had always done but this time it came back denied again. The easy way was to switch them all to non-working short acting medication. That was easy but wrong.
However, I decided to appeal it further. I had a phone conversation with the insurer. They stood their ground. They said I had to switch to the short acting medication.
At that point, I told them that I had eleven patients that needed approval. I wanted to be clear about their desires. They wanted me to write in those eleven patient records that the insurer was requiring me to switch from an FDA approved drug for ADHD to a non-FDA approved drug for ADHD. If they wanted the records to reflect that fact, I would be glad to do so.
For some strange reason, at that point, they decided to give me approval. However, just think how much of my time it took for that to happen. We cannot expect busy physicians to do that kind of thing routinely.
Insurance denials are indeed a complex issue. They are often overturned on appeal. However, we do not do that many appeals. Social media knows very little about it, but there are a lot of people who act like they do.