Health Inequity: Barriers Caused by Abusive Payer Practices

On February 2, 2023, ProPublica, the publication with a mission to “expose abuses of power” and particularly known for their extraordinary thoroughness of investigation, published a piece exposing United Healthcare’s practices denying medically necessary care for one patient, Christopher McNaughton, who is diagnosed with ulcerative colitis. The barriers caused by abusive payer practices is nothing new to patients living with chronic health conditions, including HIV and viral hepatitis.

McNaughton’s disease state is particularly challenging and his treatment was costing United Healthcare about $2 million per year. McNaughton, after receiving repeated coverage denials of live-improving and life-saving medication from United Healthcare, many appeals, conflicting results from “third-party” medical reviewers, and an insistence from United Healthcare that McNaughton’s care was not “medically necessary”, McNaughton’s family sued. What that lawsuit uncovered was a trove of data, recordings, emails, reports, and more that showed distain for McNaughton’s family seeking the care he needs, a cover up of a review which properly identified the medical necessity for McNaughton’s treatment in alignment with his provider’s recommendations, and even more grossly abusive legal tricks to disrupt and complicate the lawsuit process.

McNaughton receives his insurance coverage through Penn State University, where he goes to school and his parents work. Amid all of the turmoil of navigating denials, McNaughton and his family had reached out to the sponsor of his health cover only to find an extraordinary lack of help. The curious detail there is the university’s “health insurance coordinator” turns out to be a full-time employee of United Healthcare, despite no disclosure of that fact on Penn State’s webpages and the coordinator being assigned both a Penn State email address and phone number. Arguably, as the sponsor of the plan, Penn State has a role to play here, too, much like large employers and even the government in public payer programs.

Similarly, the New York Times covered the issue of payers refusing to cover the cost of high-cost, life-saving care, especially when that care includes newer medications. All the advancements in the world can’t change the course of a person’s life, if they can’t afford those advancements or the cost of those advancements might bankrupt a patient. While some public payer programs help to protect patients from these burdens, with complex regulatory requirements, even those are often farmed out to the same private payer entities responsible for McNaughton’s experiences, or those described by the numerous patients included in New York Times’ piece. For Medicaid, these entities are called managed care organizations (MCOs) and in Medicare they can been under the Medicare Advantage program. For many patients in private plans, formulary restrictions are quite common. This is still also true in Medicaid and Medicare Advantage plans, in which a patient and/or their provider has to chase after a series of costly administrative barriers in order to get an exception, which may or may not be denied at the end of the day. Indeed, MCOs and private payers have a history of refusing to add new medications to formularies, arguing “cost-effectiveness”, despite U.S. Food and Drug Administration (FDA) approvals and study designs showing greater efficacy, curative potential, or meeting a unique need. We won’t argue how placing greater value on “cost-savings” in the short-term in the face of more efficacious medication for patients is both morally and ethically abominable. Ultimately, these types of moves just shift cost-burdens to patients, namely in the expense of their health and even their lives. Similarly, newer medications may be placed on higher tiers, requiring higher co-pays or step-therapy (failing a different medication before having access to a newer one). Program designs with high deductibles and copay schemes (sometimes called co-insurance) are leaving more and more patients behind, as evidenced by work from Dr. Jalpa Doshi, a professor at the University of Pennsylvania, which showed rates of medication abandonment increase dramatically as co-pays rise.

Digging into the details of navigation, a Kaiser Family Foundation (KFF) analysis found Medicare Advantage plans forced patients through the process of securing permission from their payer before getting coverage of care – or as we like to call it, getting care – known as prior authorization. In theory, prior authorizations should align with a patient’s medical necessity as identified by their provider, encourage exploration of less costly treatment courses, and save both the plan and patients some money in the process. In practice, prior authorizations, particularly with regard to medication benefit coverage, is used to delay and deny care very similar to auto insurers looking to get out paying for a claim. KFF’s analysis found that in 2021, Medicare Advantage plans received 35 million prior authorization requests. Medicare Advantage only has 23 million enrollees in the contracts reviewed, thus averaging about 1.5 prior authorization per enrollee. The application of these requests is not uniform. Kaiser Permanente (no affiliation with KFF) had a prior authorization rate of 0.3% per enrollee and Anthem had a rate nearly time times higher at 2.9% per enrollee. To be fair, Kaiser Permanente’s network of providers work at entities Kaiser Permanente owns. The overall denial rate of prior authorizations across Medicare Advantage plans in 2021 was about 5% (or 2 million partial or full denials). Navigating denials, as shown in the ProPublica piece, is more than a little bit challenging when payers are bound and determined to limit their own costs. This is easily displayed in seeing the appeal rate for those 2 million denials of coverage was just 11% (or about 220,000). Of those appeals, a full 82% were overturned (or about 180,400). An Office of the Inspector General (OIG) report found more than 10% of a small sample of denials were “inappropriate” and would have generally been covered by traditional Medicare. It’s safe to say, at least 200,000 patients in Medicare Advantage plans alone have experienced delayed, medically necessary care…just because.

All of this incredibly noteworthy as the Biden Administration works to finalize an audit rule for Medicare Advantage plans which is expected to generate some potential $2 billion dollars returned to the government for overbilling, or claiming patients were sicker than they were. These payers are posed to argue simultaneously that patients don’t need medically necessary care despite being sicker than they actually are. It’s truly a remarkable moment to see predatory practices barrel their ways towards one another in the name of payer profits.

The New York Times piece notably reminds readers, when payers or even government officials argue for “cost savings”, they’re not necessarily talking about cost-savings for patients. The Inflation reduction Act, for example, requires manufacturers to refund the difference of medication’s cost rising higher than inflation to the government, but the government isn’t required to pass those savings make it back to patients. Again, to be fair, it might be particularly challenging for public program administrators to ensure those savings make it back to patients because those administrators are already saving plenty of money into their own pockets through bulk purchasing, already negotiating lower costs, and discount or rebate programs. On the double dipping end of the never-ending double dip, these same payers are fighting back against a series of programs run by medication manufacturers known patient assistance programs. The most common form of patient assistance programs is designed as co-pay assistance, helping patients cover their out-of-pocket costs of a particular medication. Right now, payers are using several dirty tricks to make sure they get the benefit of those billing dollars, rather than patients. The HIV + HepC Institute have joined other advocates in suing the Biden Administration over a rule issued under the previous administration to ensure those assistance programs designed to benefit patients and extend access to care are actually being used that way.

States are taking on efforts to combat abusive prior authorization practices introducing or having already passed “gold card” programs, in which providers with a history of successfully meeting prior authorization requirements in previous years may be exempt from needing to go through those processes for a certain period of time. The Biden Administration, for their part have also introduced a set of rules to streamline prior authorization processes, in an effort to expedite the experiences patients and providers have in navigating payment for care. And Congress is expected to see what was known as the Safe Step Act reintroduced this year, a bi-partisan and exceedingly popular piece of legislation aimed at curbing fail-first practices.

But patients, advocates, and policymakers should be careful about unintended consequences and keep an eye out for payers to adjust their practices. In gold-card programs, payers could just expand their prior authorization requirements, narrow formularies, and increase their rate of denials in order to disqualify providers who were previously qualified for the programs. We should also get creative in seeking to close some of these loopholes in the Affordable Care Act’s promise to bring a more equitable and easier to navigate health care landscape. Introducing parity between medical benefit profit caps (known as medical loss ratio) and pharmacy benefit profit caps might encourage (read: require) pharmacy benefit managers to share the savings, have discounts follow patients, expand formularies, and otherwise ensure their program dollars are being used to the maximum benefit of patients.

Provider Survey: Prior Authorizations Harm Patients

The issue of prior authorizations (PAs) comes across my plate quite frequently. Really, it’s bigger than PAs. PAs are but one of several types of practices known as “utilization management” and it’s also one of the fastest ways to get me hot under the collar in a way reminiscent of the fury and frustration of a poison oak rash. But PAs are particularly notorious because they’re one of the methods of utilization management health care providers have to directly engage with, rather than something saddled in the lap of a pharmacist or patient at the point of sale. If you haven’t run into the issue of prior authorizations, let me back up some and give you a brief explanation.

The health insurance you get when it’s branded with a major corporation’s name (rather than a government program) is either a commercial plan or that of the same entity working as a “managed care organization” on behalf of a government funded program. But that package is generally two different types of benefits packaged as one, medical coverage over the cost of seeing your doctors and getting labs and pharmacy coverage over your prescription medications. Just like when your medical coverage limits the type of provider you can see or the facility “in-network” they’ll pay for you to go to, your pharmacy benefit may include a limit or design to steer you toward a limited network of pharmacies and that benefit decides what types of medications they’ll cover, what they’ll make you pay in cost sharing (co-pays), and what hoops you have to jump through when they don’t want to cover a particular medication because it’s costly. One of the ways both of these types of benefits seek to discourage patients from seeking out expensive care or medications is by making your provider ask them pretty please if you can have a particular treatment. This is a prior authorization.

But who calls the shots when your doctor and the pharmacy benefit manager (PBM) disagree about you needing that specific treatment? That’s a complicated answer and what happens to patients navigating that space of waiting for your doctor and PBM to communicate and figure things out is not well studied in clinical terms. PBMs generally ask a third-party with expertise to make a medical decision on if you really need that particular treatment or if something else might be…ok based on the reasons your provider says you need that specific treatment. The thing is, the PBMs both pick and pay that third-party. There is no truly independent arbiter to navigate a coverage decision. That third-party has a vested interest in maintaining their business model and keeping the folks who write their checks happy. And those folks aren’t you or your doctor. They tend to view the PA under the lens of a singular condition, lacking the whole context of your health needs and history, and while “medical necessity” is the most common claim needed to get around a PA, proving that can often be a onerous and sometimes lengthy process.

None of that addresses that your doctor is your doctor for a reason. They’re intimate with your personal medical situation, co-occurring conditions, things like how big a pill you can swallow without choking, what vitamins you take, and more. There is never a better decision-making process than the one made between patient and provider.

The best way to explain the PA process is calling it “deny and delay”. Deny the claim, delay a patient getting the care they need. There’s a quiet and underlying assumption that patients and providers are picking their care based on what costs the most, which neglects the fact that plan designs already make it ridiculously challenging for the average person to afford even basic care, much less care required to manage chronic conditions. Sky-high premiums and deductibles to tune of thousands of dollars mean most patients simply can’t afford to pursue costly care, even if you need it.

The American Medical Association has sought to measure these experiences and outcomes with a physician survey, asking doctors and their administrative staff to quantify what’s going on for doctors offices and patients when running up against PAs. The survey findings are shocking but not surprising if you, dear reader, can recall any time you’ve already had to navigate a PA. Let’s run down the top line numbers:

- 93% of participants said PAs delay care for patients (up from 92% in 2017)
- 82% of physicians said PAs lead to medication abandonment at least sometimes (24% said “often” and 2% said “always”)
- 91% said PAs have a “somewhat or significant” negative clinical impact on patients
- 51% said their patients had to take time off work in order to navigate a PA
- physicians said they had to manage about 41 prior authorizations a week and have to dedicate about 2 full days a week to navigating PAs with about 40% of their staff solely working to manage the paperwork associated with PAs

Patient outcomes were seriously impacted by PAs with 34% of physicians reporting they had patients experience adverse events as a result of delayed care due to PAs, 24% of physicians said they’ve had patients hospitalized waiting on an approval from their insurer, 18% reported that a PA lead to a life threatening event for a patient, and 8 % of participating physicians said PAs have lead to patients becoming disabled, experiencing cognitive anomaly, permanent bodily damage, birth defects, or even death.

Here’s the kicker, while 98% of providers have found claims by insurers their PA policies are evidenced based, only 30% of physicians agreed those policies in practice were actually evidenced-based.

All of this is to say, providers see payer abuses of utilization management harming patients quite regularly all in the name of profit making for insurers and PBMs. An insurance policy isn’t worth the paper it’s written on much less the money spent if, in the end, patients can’t actually get the care they’re paying for. If a provider’s contentious process of educating a patient about their health, why they need a particular treatment, and monitoring of that health condition to a patient’s benefit is how a consumer would generally define “practicing medicine”, then the denial of that specific care must also be considered “practicing medicine”. We don’t pay insurers to practice medicine, we pay them to cover the costs of our care.

For their part, the AMA has also previously suggested 21 principles in the reform of utilization management in order to stop the practice of payers practicing medicine by utilization review. Clearly, more needs to be done on the legislative and regulatory fronts in order to protect patients from these predatory and abusive practices. Insurers and PBMs are excellent at planning ways to punish legislative action and patients if constraints are placed on them. It’s time our law makers and government begin responding to existing abuses of our health care ecosystem and affirmatively anticipate market adjustments favoring profit over patients. It’s beyond time government funded programs require payers to actively engage patients in feedback processes and meet minimum metrics of patient success and satisfaction as the government does with all other stakeholders receiving those dollars. Payers can no longer be exempt from the basic decency required to be a full-fledged player in health care rather than the grifter status they enjoy right now. Patients simply can’t afford it.