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SAN ANTONIO
MEDICINE

Health Insurance Company Chicanery

By Neal S. Meritz, MD

The health insurance industry utilizes many
tactics, some overbearing and some more sub-
tle, but doctors and patients are invariably the
victims. Physicians have always had a love/hate
relationship with health insurance companies.
This is the result of decades of dishonorable
treatment of doctors, hospitals and patients in
policy making and payment considerations.
Health insurance companies have become
multibillion dollar industries in part by refus-
ing to pay physicians, care centers and hospitals
fairly. Denying and delaying claims is the foun-
dation on which the health care industry reaps
those enormous profits.

Coding
Medical coding is how the physician’s prac-
tice turns services provided into billable rev-
1
enue, and if that coding is deemed inaccurate The insurer agreed to overturn about 40% of Ratio.” Thus, actually paying doctors and pro-
6
by the insurer, reimbursements will be delayed, that 0.2%. Former Kansas Insurance Commis- viding health care to patients are considered fi-
denied or only partially paid. The ICD system sioner Sandy Praeger states, “We think some nancial losses by an insurer.
is complex and confusing with claims most companies are probably denying claims, count-
frequently rejected due to alleged billing and ing on the hassle factor, so that people will just Other Tactics
coding errors. Medical coding is predomi- go ahead and pay out of their own pockets.” 5 Health insurers employ many other decep-
nately payment related; it has almost nothing tions to avoid paying doctors. They might claim
whatsoever to do with patient care. Any claim COMPLEXITY that the procedure is experimental or cosmetic.
that results in non-payment or delay results in Consumer Reports Insurers have been found guilty of canceling, il-
increased revenue for the insurer, and ICD The complexity of our health care structure legally and retroactively, policies of people
considerations further that aim. is the reason that we have the most expensive, whose medical conditions are too expensive to
inequitable, inefficient and unpopular health treat. Many denials are for procedures judged
Denying Valid Claims care system of any developed country, with to be “not medically necessary.” Insurance com-
Healthcare insurers routinely make the busi- poor to mediocre outcomes. Reimbursement, panies rely on technicalities such as improper
ness decisions to deny the claim and hope that with its mind-boggling payment rules, creates coding or demographic errors to deny valid
2
the patient does not pursue the appeal. Faced an enormity of administrative costs as well as claims. Insurers now perform what they refer to
with a denial, most patients and doctors will many perverse incentives. Physicians and hos- as “audits,” utilizing software known as “denial
accept the insurer’s decision and pay the bills pitals are insurance company prey. The system, engines” because the programs are designed to
themselves, thus increasing the insurer’s with its intentional confusion, is designed to purposely decrease payments to doctors and
3
profits. According to healthcare.gov, in 2019, wear physicians down. An insurance company hospitals. Multiple industry sources have re-
181 major ACA (Obamacare) medical insur- has nothing to lose and everything to gain by ported the automatic downcoding or denial of
ers reported 232.2 million in network claims placing barriers in the physician’s path. The high-level evaluation and management
received, with 40.4 million denied, an average percent of premiums that an insurance com- services. And, of course, there is the hassle fac-
7
of 17.4%. Less than 60,000 of these denials pany spends on claims and expenses that im- tor from: prior authorizations, exclusion of
4
were appealed, an appeal rate of less than 0.2%. prove health care is called the “Medical Loss medications and intentional confusion.

34 SAN ANTONIO MEDICINE • May 2021