Tuesday, April 21, 2009

How Insurance Pre-Approvals Impede Quality Care

When the ache in her lower abdomen became excruciating, the young woman was rushed to a surgery center, where the doctor diagnosed a ruptured appendix.

The woman needed an operation—fast. But before the surgeon could wheel her into the operating theater, he had to find out whether the patient's insurance company would pay. That meant paperwork: A report had to be dictated, typed up and submitted to her insurer for approval.

So while the woman waited in agony, her doctor dialed a toll-free number.

The instant he hung up a few minutes later, a digitized recording raced through fiber-optic cables on the Pacific Ocean seabed and into a computer server on the 17th floor of a Manila office tower, where medical school graduate Dinah Barrete was working the graveyard shift.
Chicago Tribune, 21 Apr 2009
As I read this story, I couldn't help but wonder why our quality advocates were not up in arms with outrage this morning. Why has the Agency for Healthcare Research and Quality (AHRQ) not developed specific quidelines the refuse to pay for such shoddy performance that delays a patient's care? Isn't the delay in therapy because of the medical "requirement" for insurance "pre-approval" dependent on a typed report in a case such as this the ultimate in poor care delivery? What would have happened in this case if the insurance company balked and refused to approve this patient's surgery? Would the doctor have been obligated to refused to do the surgery?

Of course not.

One of the largest breeches of "quality" patient care in health care today are insurance pre-approvals, especially in the circumstances of true medical emergencies. And it is expensive, too. Why should the doctor have to dictate his note or have it transcribed? What potential harm came to the patient as a result of the delay to her care? Do we know? Might there be other situations like a perforated viscus, depressed skull fracture, septicemia in a patient without a spleen be even more catastrophic if we had to wait for insurance pre-approvals and dictations before treating patients?


I would propose that the decision for surgery rests entirely with the doctor to decide, not some third party as this article suggests.

Let's save a ton of money and get rid of this insurance pre-approval racket and the insurance industry's requirements for a dictated note.

Then maybe we'd start saving real money during health care reform.



Anonymous said...

Granted, you must see much more of this, but as a patient who has had 6 different insurances in 33 years of working, only elective surgery requires pre-approval. This case would not be considered elective. The only restriction would be if the surgeon was a preferred provider or not - that would affect how much the patient would pay. But, the implication you give is the surgeon would not be paid at all - again, not the case with private insurance. If the insurance did not pay or not pay as a preferred provider, the responsibility lies with the patient. If patients don't pay, it ends up on their credit report. So, ultimately, it is the patient's choice to wait or proceed knowing the potential risks of THEIR responsibility of ownership of the fees.

It is true, however - if our insurance does not pay, for whatever reason (provider, hospital, etc not part of the preferred provider list) - then we, as patients, are often just one illness away from bankruptcy. When that occurs, yes - the provider is not likely to be paid or must get in line with other creditors. But, that should be addressed with the cost of medical care - and as a hospital pharmacist - the billed amount by a hospital has no relationship to the actual cost of anything - from drugs to drill bits used in the OR.... a result of the use of DRGs from decades ago.

Keith Sarpolis said...


On the one hand, I agree fully that this system is one of the many unfunded mandates that have driven up the cost of medicine. On th eother hand, it is nice to have the insurance company put their stamp of approval on the exam instead of them denying payment after the fact, sticking the patient with a huge expense they did not anticipate.

I have only had one expericence over the years where I had to talk to a physician regarding something an insurer denied, and he immediatly capitulated and approved the test. It is just aggravting to us all to have these hired henchmen for the insurance industry second guessing everything we do! Unfortunately, we practice in a medical nirvana where most physicians do the right thing by their patients without the necesity of doing inappropriate surgery or testing, but I don't think that htis is true in all places. Thus, how is the insurance company to keep costs down if it does not prescreen these studies or surgeries?

Of course, your point is that they may impede care and affect quality. In circumstances wher I think this might be the case, I just go ahead and do what I think is right whether the insurance ompany signs off or not. After all, not to do so is indeed putting the patient in peril and inviting litigation if care that is not vital is not acted on regardless of what the insurer says. They should plan on a good fight and a letter to the tribune if an insurer is so unwise to demand emergent care after the fact.

DrWes said...


You said: "...it is nice to have the insurance company put their stamp of approval on the exam instead of them denying payment after the fact, sticking the patient with a huge expense they did not anticipate."

Pre-approval does not and has never guaranteed later payment by an insurer. Ever insurer we have EVER contacted to "pre-approve" a procedure states this when we receive "pre-approval." What kind of stamp is that?

When we discuss cost-savings, we also find this (from the above-referenced article):

"The business of transcribing medical files employed 34,000 Filipinos and generated $476 million last year, said Ernesto Herrera, who heads the Trade Union Congress of the Philippines. He expects the number of transcriptionists to more than triple, and annual billings to jump to more than $1.7 billion, by the end of 2010."So who's paying that tab? Suprise, surprise, we are. But hey, since its farmed out overseas, it's not an expense, right?

Look, doctors and patients are utimately both on the hook if things don't get paid. After all, we're the lowest common denominator in health care today. All other third parties get their money irrespective of outcomes and put the bureaucratic (and costly) onus on the very people who are supposed to be delivering and receiving the care. Rarely is there a discussion about what it costs to our health care system (and potentially to the patient) to maintain the status quo of ever-increasing bureaucratic hoop-jumping.