Mississippians who purchase health insurance expect that their healthcare will be covered, should they become ill. While insurance companies demand higher and higher premiums, however, they increasingly employ “utilization management” protocols to provide less and less coverage. Whatever your political stripes, everyone can agree that health insurance consumers should get the coverage they paid for.
Health insurance companies would have us believe they are losing money with the Affordable Healthcare Act. But the numbers prove otherwise. Last year, insurers made 46 percent more profit than 2015, record high earnings. Of course, half of that profit came by squeezing customers for higher premiums, and co-payments.
Patients might willingly accept the higher out-of-pocket costs if they were at least getting decent coverage in return. But the other half of those record profits come from new “utilization management” (UM) protocols that shift healthcare costs back to the consumer and limit the ability of patients to access treatments for chronic conditions like diabetes, arthritis and high blood pressure. Insurers deny treatment coverage for nearly one-in-four patients with chronic illnesses, according to a 2017 survey by the Doctor-Patient Rights Project (DPRP).
Patients responding to DPRP’s survey identified five UM protocols in particular that their insurers used to justify treatment coverage denials. Some are policies most patients have heard of, like prior authorization or formulary exclusions. More insurance providers require doctors to obtain authorization before prescribing the medication they think will be most effective—as if corporate executives know better than treating physicians.
Along with the formulary lists of covered medicines, insurance companies recently started cataloguing in official formulary exclusion lists all the medications the company won’t cover. These lists have grown exponentially in the five years they have been in widespread use. For example, since 2014, the number of drugs excluded by CVS—the nation’s largest pharmacy—has quadrupled. Express Scripts, another major national pharmacy, excludes even more treatments than CVS.
Consumers may be less familiar with a UM protocol called “step therapy,” even though a 2015 survey of 300 employer-provided plans showed a clear majority (56 percent) employed the practice for specific treatments. The protocol is also known as “fail first” because it requires patients to try the insurer’s preferred sequence of treatments first and “fail” before the insurer will cover the treatment the doctor prefers. Before patients move to each successive step, they have to prove they failed on the current treatment, which usually requires the treating physician to file detailed paperwork documenting each step’s ineffectiveness.
If this sounds like a lot of hassle, it is. Not only does step therapy second-guess the prescribing doctor, it adds insult to injury by piling additional administrative burdens on physicians already drowning in insurer paperwork. All of this extra time and effort by doctors contributes to the estimated $471 billion the U.S. healthcare system spends each year on billing and insurance-related issues.
Through all of this trial and error, patients in dire need of care are delayed access to effective treatment. For example, a 2013 analysis of cancer patients required to go through step therapy before the insurer would cover a specialty medications found that more than two-thirds (67 percent) had to wait over a month before they even received the first drug in the insurer’s preferred sequence.
Many patients that DPRP surveyed said their chronic diseases worsened while working their way through the insurer’s preferred treatments. Step therapy can put patients at-risk of adverse drug reactions or other medical complications requiring additional clinical services and adding to insurers’ expenses.
Consumers that purchase insurance coverage rightfully believe they will have access to the care their doctors prescribe. No one begrudges for-profit health insurance companies from making money for their shareholders. But, insurance companies undermine their financial objectives when they impose UM protocols in a way that denies consumers access to prescribed treatments, delays effective care or threatens patient health.
Rogen Chhabra, who represents clients in medical negligence, work injuries, and benefit denials, is a founding partner of the law firm Chhabra & Gibbs, P.A. with offices in Jackson and Gulfport.