States Tighten Health Care Denial Laws: Can Insurers Outrun?

TL/DR –

Amina Tollin, a patient with a chronic nerve condition, polyneuropathy, had her life-saving blood infusion therapy stopped by Medicaid after it stopped covering the $18,000 monthly costs. This was due to an increasingly common process among insurers known as prior authorization, which requires doctors to get approval before insurers pay for certain treatments and procedures. Nine states have enacted laws to minimize such delays and denials, and more than two dozen have considered legislation, but these laws often lack strong enforcement mechanisms, leaving many patients with chronic conditions experiencing delays, denials, and reduced quality of life.

Prior Authorization Causing Delays and Denials of Vital Care

Amina Tollin, a 40-year-old resident of Tucson, Arizona, has been living with polyneuropathy, a chronic nerve condition, for several years. Her treatment involved a monthly blood infusion therapy costing $18,000 per session. However, three months ago, Medicaid stopped covering the therapy due to a process called prior authorization, leaving her in severe pain.

Prior authorization, a common process among insurers, requires doctors to obtain approval before they can cover the cost of certain treatments. This has led to delays and denials of care, causing harm to patients and increasing healthcare costs.

Over the past years, numerous states have considered legislation to minimize these delays, and nine have enacted new laws, according to the American Medical Association.

However, supporters of these laws caution that their effectiveness may be limited due to weak enforcement mechanisms. Ron Howrigon, a former Cigna executive, warns that incorrect denials will still persist despite these laws.

State Attempts to Tackle Prior Authorization

States have adopted four primary strategies to combat prior authorization issues, says Kaye Pestaina, the director of the program on patient and consumer protection at KFF, a nonprofit research organization. These strategies include shortening the decision time on a request, reducing administrative burden for physicians, increasing transparency and data requirements, and mandating decision-making based on peer-reviewed, clinical data.

However, enforcement of these new laws may pose challenges. For instance, state insurance commissioners will rely heavily on complaints from patients and doctors to uncover violations. Additionally, the fines and penalties may not be enough to compel multi-billion dollar insurance giants to comply.

Medical Directors Could Be Held Accountable

Howrigon suggests making medical directors within insurance companies accountable for decisions that harm patients as a possible solution. In Oklahoma, a bill is advancing that could make insurance company medical directors liable for medical malpractice, opening them up to lawsuits.

Patients Left in Limbo

In Arizona, a bill that requires insurers to honor prior authorizations for at least 90 days has been introduced. But it would not apply to Medicaid beneficiaries like Tollin. After three months of limbo, Medicaid finally approved her infusions, but she fears the struggle could return when the coverage ends next year.

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