I Set Out to Create a Simple Map for How to Appeal Your Insurance Denial. Instead, I Found a Mind-Boggling Labyrinth.
by Cheryl Clark for ProPublica, Aug. 31, 2023
I spoke with more than 50 insurance experts, patients, lawyers, physicians and consumer advocates about building a tool anyone could use to navigate insurance appeals. Nearly everyone said the same thing: Great idea. But almost impossible to do.
ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published. This story was co-published with The Capitol Forum.
Have you ever had a health care claim denied by your insurer? Ever tried to appeal it? Did you wind up confused, frustrated, exhausted, defeated?
I’ve been a health care reporter for more than 40 years. And when I tried to figure out how to appeal insurance denials, I wound up the same way. And I didn’t even try to file an actual appeal.
ProPublica came to me earlier this year with what might have seemed like a simple proposition. They wanted me to create an interactive appeals guide that would help readers navigate their insurers’ maze. (A team of reporters at ProPublica and The Capitol Forum has been investigating all the ways that insurers deny payments for health care. If you’ve got a story to share, let them know here.)
Over the next several weeks, I spoke with more than 50 insurance experts, patients, lawyers, physicians and consumer advocates. Nearly everyone said the same thing: Great idea. But almost impossible to do. The insurance industry and its regulators have made it so complicated to file an appeal that only a tiny percentage of patients ever do. For example, less than two-tenths of 1% of patients in Obamacare plans bothered to appeal claims denied in 2021.
The central problem: There are many kinds of insurance in the U.S., and they have different processes for appealing a denial. And no lawmakers or regulators in state and federal governments have forced all insurers to follow one simple standard.
I tried to create a spreadsheet that would guide readers through the appeals process for all the different types of insurance and circumstances. When a patient needs care urgently, for instance, an appeal follows a different track. But with each day of reporting, with each expert interviewed, it got more and more confusing. There was a point when I thought I was drowning in exceptions and caveats. Some nights were filled with a sense that I was trapped in an impossible labyrinth, with signs pointing to pathways that just kept getting me further lost.
Here are some of the issues that make it so confusing:
First, people have to know exactly what kind of insurance they have. You may think that UnitedHealthcare is your insurer because that’s the name on your insurance card, but that card doesn’t tell you what kind of plan you have. Your real insurer may be your employer. Some 65% of workers who get their coverage through their employers are in what’s known as “self-funded plans,” according to KFF (formerly Kaiser Family Foundation). That means the employer pays for medical costs, though it may hire an insurance company like UnitedHealthcare to administer claims.
The other main type of insurance that companies provide for their workers is known as a “fully insured plan.” The employer hires an insurer to take all the risk and pay the claims. With that kind of plan, the name on your card really is your insurer. Why does this difference matter? Because the route you follow to challenge an insurance denial can differ based on whether it’s a fully insured plan or a self-funded one.
But all too often people don’t know what kind of plan they have and aren’t really sure how to find out. I’m told that some employers’ human resources departments don’t know either — although they should.
“It is a little scary, because people honestly don’t really know what they have,” said Karen Pollitz, a senior fellow at KFF who specializes in health insurance research. “I’m just going to warn you that if you set up the decision tree with an A: yes, B: no, or C: not sure, you’ll find a lot of people clicking not sure.”
Government insurance is its own tangle. I am a Medicare beneficiary with a supplemental plan and a Part D plan for drug coverage. The appeals process for drug denials is different from the one for the rest of my health care. And that’s different from the process that people with Medicare Advantage plans have to follow.
A spokesperson for the Centers for Medicare & Medicaid Services, the federal agency that oversees Medicare, wrote in an email that the agency “has been actively engaged in identifying ways to simplify and streamline the appeals process and has worked with stakeholders and focus groups to identify ways to better communicate information related to the appeals process with the beneficiaries we serve.”
And we can’t forget about Medicaid and the Children’s Health Insurance Programs, which together covered 94 million enrollees as of April, more than a quarter of the U.S. population. The federal government sets minimum standards that each state Medicaid program has to follow, but states can make things more complicated by requiring different appeal pathways for different types of health care. So the process can be different depending on the type of care that was denied, and that can vary state to state.
And don’t even get me started on how baffling it can be if you’re one of the 12.5 million people covered by both Medicare and Medicaid. As far as which appeals path you have to take, Abbi Coursolle, a senior attorney with the National Health Law Program, explains: “It’s Medicare for some things and Medicaid for others.”
I sought help from Jack Dailey, a San Diego attorney and coordinator for the California Health Consumer Alliance, which works with legal-aid programs across the state. On a Zoom call, he looked at an Excel spreadsheet I’d put together for Medi-Cal, California’s Medicaid program, based on what I had already learned. Then he shook his head. A few days later, he came back with a new guide, having pulled an all-nighter correcting what I had put together and adding tons of caveats.
It was seven single-spaced pages long. It detailed five layers of the Medi-Cal appeals process, with some cases winding up in state Superior Court. There were so many abbreviations and acronyms that I needed to create a glossary. (Who knew that DMC-ODS stands for Drug Medi-Cal Organized Delivery System?) And this was for just one state!
Dr. Christianne Heck, a neurologist specializing in epilepsy with Keck Medicine of the University of Southern California, said her health system has a team of professionals dedicated to appealing denials and making prior-authorization requests — where you have to call the insurer and get approval for a procedure beforehand.
“It’s a huge problem,” Heck said. “It usually takes multiple attempts. We have to play this horrible, horrible game, and the patients are in the middle.”
It’s especially complicated in oncology, said Dr. Barbara McAneny, a former president of the American Medical Association who runs a 6,000-patient oncology practice in Albuquerque, New Mexico.
“My practice is built on the theory that all the patients should have to do is show up and we should manage everything else … because people who are sick just cannot deal with insurance companies. This is not possible,” she said.
McAneny told me she spends $350,000 a year on a designated team of denial fighters whose sole job is to request prior authorization for cancer care — an average 67 requests per day — and then appeal the denials.
For starters, she said bluntly, “we know everything is going to get denied.” It’s almost a given, she said, that the insurer will lose the first batch of records. “We often have to send records two or three times before they finally admit they actually received them. … They play all of these kinds of delaying games.”
McAneny thinks that for insurance companies, it’s really all about the money.
Her theory is that insurance companies save money by delaying spending as long as possible, especially if the patient or the doctor gives up on the appeal, or the patient’s condition rapidly declines in the absence of treatment.
For an insurance company, she said, “you know, death is cheaper than chemotherapy.”
I asked James Swann, a spokesperson for AHIP, the trade group formerly known as America’s Health Insurance Plans, what his organization thought of comments like that. He declined to address that directly, nor did he answer my question about why the industry has made appealing denials so complex. In a written statement Swann said that doctors and insurers “need to work together to deliver evidence-based care and avoid treatments that are inappropriate, unnecessary, and more costly. Most often, a claim that is not immediately approved just requires the provider to submit additional information to appropriately document the request, such as the diagnosis or other details. If a claim is not approved after correct and complete information is submitted, there are several levels of appeal available to the patient and their provider.”
Swann outlined some of the appeals steps available, including a review by a doctor who wasn’t involved in denying the claim initially, the chance to submit additional clinical rationale and a review by an entity that’s independent of the insurer. He also noted that Medicare Advantage and Part D programs have multiple levels of appeals before winding up in court, including a step that requires a review by an outside, independent organization.
Domna Antoniadis is a health care attorney in New York who co-runs the Access to Care nonprofit, which educates patients and providers on their health insurance rights. She spent hours helping me navigate various appeal systems.
She offered up one important tip for people who use commercial insurance: Get the full plan document for your policy and read it. It’ll be around 100 pages and will tell you what medical services are covered and detail all the steps needed to appeal a denial. Don’t rely on the four-page summary, she said. It probably won’t help.
Likewise, Medicare, Medicare Advantage and Medicaid denial letters should explain the steps to appeal the decision.
When you can, enlist the help of your medical provider. Sometimes an insurer says no to a claim because a doctor’s office submitted it under the wrong code, and that can be fixed quickly.
Antoniadis acknowledged the challenges but believes that consumers have a lot more power than they realize. They can push back to advocate for themselves.
“The appeals process is not always handled properly by the plans, which is why consumers need to report and complain to their relevant government regulators when they believe they’ve been unfairly denied,” she said. “That’s integral to changing the system.”
Biden administration names 10 prescription drugs for price negotiations
The Biden administration Tuesday identified 10 expensive prescription drugs that will be included in price negotiations with pharmaceutical manufacturers as the government seeks to ease the financial burden on older and disabled Americans, an unprecedented step in a long political war over the nation’s exorbitant drug costs.
Half of these first drugs chosen for price negotiations are medications used to prevent blood clots and treat diabetes and were taken by millions of people on Medicare in the past year, according to a list released by federal health officials who oversee Medicare, the vast public health insurance system. Others are used to treat heart trouble, autoimmune disease and cancer.
The top three of the 10 drugs on the widely anticipated list include Eliquis, a blood thinner; Jardiance, which treats diabetes and heart failure; and Xarelto, another blood thinner. They cost Medicare $16 billion, $7 billion and $6 billion respectively in the past year.
Medications could be targeted for price negotiation if they are available under Medicare drug benefits, lack certain competition to push down their prices and have been sold for at least several years to give drugmakers time to help recoup the expense of developing them.
Tuesday’s step toward reducing Medicare drug prices was a significant element in last year’s Inflation Reduction Act, a law that President Biden and his aides herald as a policy victory, even though the number of medications and the timing of the first price reductions — 2026 — are less ambitious than some Democrats had sought for many years. And the fate of the entire negotiation plan rests with the courts because six drug manufacturers, the Chamber of Commerce and the pharmaceutical industry’s main trade group have lodged separate lawsuits around the country trying to block it.
Still, the Biden administration, Democratic allies in Congress and consumer health-care advocates portrayed this initial list of 10 drugs as a milestone to shore up the financial stability of the Medicare system and ease the burden on its beneficiaries. Medicare is a federal insurance system for people who are at least 65, along with younger adults who have disabilities. When last year’s law passed, the Congressional Budget Office predicted the negotiations would save the program slightly more than $100 billion during the following decade.
More than 60 percent of the 65 million people on Medicare take prescription medication, and 25 percent take at least four prescriptions, according to a survey this summer by KFF, a health-care policy organization.
The rest of the list consists of Januvia, Farxiga and NovoLog, which treat diabetes among other conditions; Enbrel and Stelara, for arthritis and psoriasis; and Entresto, for heart failure; and Imbruvica, for cancers of the blood.
Wall Street analysts widely expected that most of the 10 drugs selected for price negotiations would appear on the list, based on Medicare expenditures and their sales in the United States, among other criteria. For seniors enrolled in Medicare, their average, annual out-of-pocket costs ranged from $121 for diabetes drug NovoLog to $5,247 for cancer-drug Imbruvica, including those with financial assistance. All told, HHS estimates that about 9 million seniors enrolled in Medicare’s prescription drug program used one or more of the 10 drugs in 2022, and paid a total of $3.4 billion out of pocket.
The 10 drugs identified Tuesday represent the first wave of medicines destined for price negotiation, with the roster expanding in future years. For this initial batch, manufacturers have until the start of October to agree to price negotiation with the Centers for Medicare and Medicaid Services. If they do, the companies will quickly need to disclose an array of data to CMS for each selected drug regarding revenue and what the manufacturer spent to research, develop and produce it.
If a manufacturer refuses to negotiate or won’t agree to what federal rules call a “maximum fair price,” the company will face a substantial tax or must withdraw from Medicare and Medicaid, the nation’s largest public health insurance program designed for people with low incomes.
To be considered for the price negotiation, a drug must have no competition from a less expensive generic competitor, and a biologic — a category of drugs made from living organisms — must not compete with any cheaper version known as biosimilars. The number of drugs involved will expand slightly during the next two years, with a total of 15 each of the next two years and 20 drugs in following years. This year and next, the drugs are part of Medicare’s Part D, the program’s drug insurance created two decades ago. After that, the drugs can come from Part D or from Part B, such as cancer therapies, which are administered by doctors.
Limited though it is, the arrival of Medicare drug price negotiation is a sharp break from Medicare’s history. When the program was created in the 1960s, it covered drugs that were administered in a doctor’s office — Part B — but excluded medications that patients took on their own. Despite efforts over the decades to add outpatient drug benefits, they were woven into larger health-reform proposals that failed, and the broader drug benefits did not become part of the program until a set of Medicare changes adopted by Congress in 2003. To win Republican support, that statute included language that prohibited any role for the government to negotiate medication prices. The 2022 Inflation Reduction Act — known as IRA — rescinded the prohibition.
Since the outpatient drug benefits embedded in the 2003 law began three years later, Medicare beneficiaries have been able to get that coverage by buying a separate drug plan — through Part D — or as part of managed-care plans, known as Medicare Advantage. Either way, beneficiaries still pay some of the cost of getting the medicines, and the government has not influenced the prices that pharmaceutical companies set.
The push for price negotiation faced intense opposition from pharmaceutical companies, which contend that capping potential earning erodes their ability to invest in further research and development. After a rare loss on Capitol Hill, the industry and its business allies have turned to the courts, with the eight cases that could take years to resolve and could land before the Supreme Court.
If the negotiation process stands, industry analysts predict it will have profound ripple effect. Prices negotiated and made public by Medicare could affect negotiations between commercial insurers and drugmakers. In turn, pharmaceutical companies could focus on developing larger-molecule drugs — such as vaccines and gene therapies — that are exempted from potential Medicare price negotiations for a longer period than prescription pills.
The ultimate impacts of the law are hard to predict. Even companies critical of it acknowledge they could benefit from provisions that make their medications more affordable to patients.
“The IRA law is not all gloom and doom for biopharma, since it will reduce seniors’ out-of-pocket” costs, motivating patients to stay on them longer, according to analysts at Leerink Partners, a health care-focused investment bank. And some drugs designated for negotiation at first might not remain on the list for long, because they are scheduled to lose their patent protection soon after the lower prices take effect, meaning they would have competition and no longer be eligible for the negotiated prices.
For the Biden administration, the Inflation Reduction Act provision is a centerpiece of a battle to curb drug prices that it is waging on several fronts.
Under the law, Medicare beneficiaries pay a limit of $35 a month for insulin. Biden issued an executive order last year directing the Department of Health and Human Services to study new models to lower drug costs for Medicare and Medicaid beneficiaries. In May, HHS proposed a rule that would give the department and states more leverage to negotiate payment for the most expensive drugs covered by Medicaid. And the Federal Trade Commission has taken a more aggressive approach to pharmaceutical mergers, citing concerns about price increases when it filed suit in May to block Amgen from acquiring Horizon Therapeutics — even though the two companies don’t directly compete.
Because the impact of the Medicare drug price provision will unfold over years, the negotiated prices may have a minimal effect on some drugs, including Eliquis, a blood-thinning medication that cost Medicare $6.2 billion in 2021, by far the most of any drug. Eliquis, made by Bristol Myers Squibb and Pfizer, is set to lose patent protection in 2026, the year that Medicare’s negotiated prices first takes effect.
“Whatever the impact is will not be long lasting on our portfolio,” Angela Hwang, Pfizer’s chief commercial officer, said of Eliquis in a call with financial analysts this month, according to a transcript compiled by S&P Global Market Intelligence.
Bristol-Myers Squibb said in a statement Tuesday that Eliquis “was targeted for this program due to the sheer number of Medicare patients who benefit from the medicine, not its price.”
For now, companies are already considering the law’s effects when crafting strategies to develop or acquire drugs. Novartis, for instance, looks for acquisitions where “we think we have opportunities to either manage the IRA impact or avoid the IRA impact,” CEO Vasant Narasimhan said on an earnings call last month.
https://www.washingtonpost.com/health/2023/08/29/medicare-drug-price-negotiations/
Northern Light Health challenges Brewer over loss of tax exemption at some facilities
by Patty Wight - Maine Public - August 25, 2023
Northern Light Health is challenging the city of Brewer in a disagreement over its tax exempt status.
Northern Light officials say Brewer's tax assessor has decided that portions of their facility at Whiting Hill are no longer tax-exempt because the spaces are occupied by employees for third party vendors, including private practice oncologists and lab personnel.
But Northern Light says the workers provide services exclusively for the nonprofit health care system and its patients.
Northern Light says it would have to pay nearly half a million dollars in taxes and filed a complaint Friday in Superior Court seeking a declaratory judgment. The city of Brewer was not immediately available for comment.
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