Health Care and Insurance and Government

Anthem, docs still skirmish: Insurer's new pre-approval rules rankle some A rocky marriage

March 14, 2005

Anthem Blue Cross and Blue Shield just dumped a load of extra work on the office staff of the average ear, nose and throat specialist, according Dr. Thomas Whiteman.

The WellPoint Inc. subsidiary now requires pre-approval for nonemergency, high-tech imaging such as MRI or CAT scans. The insurer started the new policy March 1 to curb overuse.

Whiteman said the average otolaryngologist-or ear, nose and throat specialist-schedules as many as eight of these tests a day. If Anthem insures just half that total, the requirement means two more hours of work with no additional payment.

"They've pushed our margins to the absolute minimum for us to be here doing this work, and then they've added red tape," the Muncie doctor said. "The government is the only other entity that does it this bad."

Anthem has worked to improve doctor-insurer relations since it endured a spate of negative publicity over the issue a few years ago. The insurer has seen progress since then and expects even more thanks to last year's mega-merger that created WellPoint Inc., said Dr. David Lee, Anthem Blue Cross and Blue Shield's vice president of health care management for Indiana.

However, as Whiteman's story indicates, patches of frost still exist.

Complaints about Anthem and its treatment of doctors came from near and far over the past few years. In 2002, Indianapolis-based Otolaryngology Associates filed a complaint with the state Depart- ment of Insurance alleging that Anthem repeatedly failed to pay for services according to an agreed-upon schedule, ignored some claims and paid others late, among other concerns.

Dr. Thomas Fairchild, the group's president, spotlighted the problems by sending a letter outlining the complaint to 2,000 other doctors and practices in the state.

Around the same time, the Indiana Federation of Ambulatory Surgery Centers complained that Anthem refused to reimburse centers for more than one procedure performed on a patient in a single day.

A few years ago, the Connecticut State Medical Society filed a lawsuit against Anthem and six other insurers practicing in the state. That complaint alleged that the insurers illegally reduced and delayed reimbursement, said Cam Staples, a lawyer representing the society.

"There's no sense any company is doing a particularly better job relating to their physicians than any other," he said.

Some of the defendants have settled, but the class-action case is still pending in federal court for Anthem and others. Staples expects a trial to start this fall.

The Indiana Department of Insurance fined Anthem $50,000, and the insurer agreed to take several steps to improve physician relationships in accordance with a market-conduct exam released in late 2003.

Anthem officials said they've done much work in that regard.

Anthem suffered some consolidation pains a few years ago when it reduced the number of computer systems that pay claims from six to two, Lee said.

"With a company the size of Anthem, that is a huge undertaking, and naturally there were some hiccups along the way," he said.

Anthem operations in Indiana, Ohio and Kentucky struggled with timely and accurate claims payments. For instance, doctors sometimes treated patients covered by different Anthem systems. Those systems weren't communicating with each other to pay claims the same way, and as a result, a doctor could be reimbursed differently for performing the same service.

Once the insurer resolved those malfunctions, "our customer service really improved dramatically," Lee said.

Anthem took other steps as well. The company formed a provider advisory council of about 20 doctor or hospital representatives from around the state. The council discusses ways the insurer and providers can work more efficiently and improve the quality of medicine in the process.

One recommendation that came out of their first meeting last fall was for Anthem representatives to spend time in the average doctor's office observing operations.

Anthem also restarted workshops it used to hold with representatives of doctors' offices from around Indiana to explain how the company functions and to hear feedback.

"Our approach has really been to extend ourselves to our physicians and really attempt to collaborate with them to improve the delivery of health care in Indiana," Lee said.

Doctors have filed more than 700 complaints against Anthem with the state Department of Insurance since 2003, said Bettye Foy, deputy commissioner for the department's consumer services division.

She said that total includes both substantiated and unsubstantiated complaints, and she doesn't consider it an abnormally large number given that Anthem is the largest insurer in the state.

Still, it shows that the insurer's improvements haven't solved all disagreements. Dr. John Wernert still hears complaints about denied and delayed payments from other members of the Indianapolis Medical Society.

The Medical Society's president-elect said an electronic claim filed with no errors should be reimbursed in a matter of days, but it still sometimes takes weeks.

"These are the kind of ongoing issues you deal with with any large insurer, but it makes it particularly painful when you're talking about a local company," he said. "They're right downtown, but you don't seem to get any movement [on a claim]."

Whiteman believes Anthem and other insurers have improved their reimbursement turnarounds since the 1990s, when they would routinely "blow off" a claim for three months. Still, the insurer finds ways to rile him.

That high-tech imaging policy not only adds paperwork, Whiteman said, it also leads to the insurer second-guessing a doctor's clinical diagnosis.

"It gets into a whole hornet's nest," he said. "Boy, if they really want to do this fair, they should at least tell me who's on the other end telling me what I can and cannot do."

Anthem started pre-approval because utilization of those services was growing 17 percent to 20 percent in the Midwest, or "by leaps and bounds," Lee said. Several other insurance companies have a similar requirement.

Consultants told Anthem officials about 20 percent of those services would be considered medically unnecessary, according to American College of Radiology guidelines.

Lee said denials should be rare, and they will only happen after a doctor representing the insurance company has talked to the treating physician. He also said the insurer plans to adjust the program as it proceeds, possibly removing the requirement for doctors who stay within the guidelines.

"We don't want it to be an obstruction to the physician or just another hurdle for them to obtain quality assistance for the patients they care for," he said.

The formerly named Anthem Inc. and California-based WellPoint Health Networks Inc. completed a $20.8 billion merger last year to create the largest health insurer in the United States. The new company was named WellPoint Inc., and its headquarters are located in Indianapolis.

Doctors expressed concern that Anthem's "800-pound gorilla" would balloon to 1,600 pounds once this deal was finished, Lee said, adding that he believes "the exact opposite has occurred."

The merger gives the company and its subsidiaries a broader base of best-practice examples to draw upon, Lee noted. It also provides greater national influence and more resources to improve quality of care and foster things such as the development of electronic medical records in doctors' offices.

Whether all of this improves doctor relationships remains to be seen. Staples, the Connecticut Medical Society lawyer, noted his clients still deal with the same Anthem representatives in Connecticut regardless of who runs the parent company in Indianapolis.

"I don't think there's a sense it will make any difference who the people are at the top," he said.

Regardless of what may or may not happen, one theme Anthem Blue Cross and Blue Shield plans to continue is its improved effort to seek doctor feedback.

"We understand not every physician is going to be 100-percent happy with us all the time," Lee said, "but we do want to hear their concerns and address them specifically."
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