When her doctor recommended sinus surgery and her insurance confirmed that no prior authorization was required, Christine Knaack focused on getting the surgery and improving her symptoms.
The outpatient surgery, performed just over a year ago, provided Knilk with the medical relief he was looking for.
But the 65-year-old Burnsville resident’s insurance paid for the surgery, which caused him to feel bad for months.
Knaak’s story provides a window into the continuing, and perhaps growing, tension between health insurance companies and health care providers over coverage denials. Rejection without a clear reason can be upsetting for patients, who often feel helpless. It also highlights the lack of comprehensive public data on how often and why denials occur.
“We’re always frustrated by the lack of transparency… trying to figure out what kinds of services are being denied and why,” said Kay Pestaina, California-based vice president of health policy. said. Group KFF.
In August, Knaak’s employer-sponsored health insurance provider, Horizon Blue Cross Blue Shield of New Jersey, told her after surgery that it would not cover most of the costs. The insurance company determined that the procedure was not medically necessary.
Knaak began the appeals process the following month, but reached a low point in late March when she received a letter from her health care provider, Park Nicolet, saying she was liable for more than $30,000.
The appeals process was confusing and plagued by miscommunication, Knaak said. She worked in customer service for decades, responding to manufacturers’ concerns over the phone until her recent retirement. Her experience trying to get clear support from a medical company was unpleasant.
“I come from the school of customer service, the school of taking calls, solving problems and getting them resolved,” Knaack said. “No one seems to want to do it. … I’m caught in the middle.”
In early April, the Star Tribune reached out to both Horizon Blue Cross Blue Shield and Park Nicollet for questions about billing disputes. Just over a week later, the insurance company announced that it had no additional financial liability to Kunark and was paying the claims.
The problem, Horizon Blue Cross said, was that Park Nicollet initially requested prior approval for the incorrect procedure. The surgical request did not require prior approval. But that was necessary for the actual treatment Knirk received in March 2023. The insurer said this was a “Park Nicolet error” that delayed the normal process of verifying coverage upfront.
In a statement to the Star Tribune, the insurance company said, “Due to delays in obtaining additional medical records necessary for the follow-up investigation, subsequent appeals remained pending until the records were identified and reviewed.” . “Your claim has been approved and your payment has been processed.”
HealthPartners, the Bloomington-based company that operates Park Nicolet, disputes that explanation, saying it has “never been denied due to coding or authentication errors.” HealthPartners said the real problem was the long delay in the appeal process due to so-called “administrative errors” by Blue Cross.
“We continued to communicate with BCBS and Christine until BCBS discovered the appeal was unfounded in December,” the health system said in a statement to the Star Tribune. “We shared timely clinical information with BCBS to support her medical needs for the surgery.”
Data about refusal
For decades, there have been disputes between health insurance companies and health care providers over claim denials based on medical necessity findings.
But experts say there is still a lack of comprehensive public data comparing the frequency of denials for medical necessity versus other reasons, especially when it comes to employer-sponsored insurance.
This week, consulting firm Kodiak Solutions submitted data to the American Hospital Association showing that initial denials from health insurance companies have increased significantly in recent years, rising from 1.2% in 2020 to 1.7% in 2023. did. The report noted increases across several different types of insurance. , especially for inpatient care.
AHIP, a national trade association for insurance companies, would not comment on these numbers, but it does provide context for why the number of claims examined in the study were not identified or denied. If not, such numbers can be misleading, he said.
Robert Traynham, AHIP’s executive vice president of public affairs, said insurers can deny claims if the provider does not provide supporting clinical documentation in a timely manner to justify payment. He said payments could be declined to address fraud, waste and abuse, including in the case of duplicate requests.
And some denials are combined with approval of alternative treatments that better meet clinical guidelines. This may occur, for example, if the health insurance company approves him for a 4-day hospitalization when he requested a 7-day hospitalization.
“Requested services may be inconsistent with current clinical guidelines and evidence-based medicine, leading to denials, thereby jeopardizing patient safety and positive clinical outcomes.” ,” Traynham said in a statement.
However, it is clear that providers face many more challenges with health insurance denials, including technical and administrative issues that could be resolved much more easily. It states that this includes those caused by
Terrence Cunningham, director of administrative simplicity policy at the American Hospital Association, argues that when denying medical necessity, insurers sometimes refer to internal guidelines that differ from national standards set by professional associations. do. Another problem, Cunningham said, is that each insurance company’s policy is different and updated frequently, making it difficult to follow all the rules.
“There’s been a lot of talk in recent years about surprise bills and what happens when people go out of network,” said Molly Smith, group vice president for public policy at the American Hospital Association. “Perhaps the bigger surprise is when people have insurance, they’re in-network, and then that insurance no longer covers them. We really think this is an area where we need to increase our oversight. I’m thinking about it.
AHIP said in a statement that hospitals “have no problem charging or demanding exorbitant prices for medical services without any consideration for the impact of pricing on consumers’ premiums and cost-sharing.” I retorted that he seemed to be thinking about it.
“Very awkward”
Park Nicollet was an in-network provider for Knirk’s health insurance plan. The insurance limited out-of-pocket costs to less than $4,000 for covered expenses, so when Park-Nicolette’s March letter said she was responsible for $32,449.52, Knaack said: I was shocked.
Kunak said she was sometimes frustrated because the letter said she had not asked Nicolette to file an appeal on her behalf. A notebook recording the 32 phone calls she made over seven months to resolve her problems says otherwise.
Knaack said Parke-Nicolette told her in September that she would have to lead the appeal, and then filed her own appeal. She said this resulted in duplicate efforts to collect medical records, which she would have wanted to avoid.
HealthPartners said in a statement that there had been an “unfortunate” misunderstanding in the appeals process, adding in a statement: “We are committed to working with patients to help them navigate their insurance coverage.”
Knaak said she also received confusing messages from Horizon Blue Cross Blue Shield about the nature of the “first-level” and “second-level” appeals in her case. When she spoke with her insurance company in February for an update on the situation, Knaack was stunned to hear from her customer service representative that her claim was still waiting and not activated.
Without responding to any of Knilk’s specific concerns, the insurer said in a statement: “This is a collaborative effort between health care providers and health insurance companies. “This is an important reminder that we all deserve and need health care to work the way we all want it to work.” ”
Knaak is glad to be free from the threat of huge medical bills. But she wants others to share her story to warn consumers about how things can go wrong and urge insurance companies and health care providers to do better. I am appealing to you.
“I still wonder, ‘Why didn’t Blue Cross Blue Shield and Park Nicollet communicate more about this?'” she said. “This whole appellate system is very complicated. I don’t know why things are so confusing.”
