Chris Stanley via Modern Healthcare
County courtrooms are no strangers to contract disputes between local hospitals and insurers. Lately, though, they've had some big cases dropped in their laps as hospitals owned by HCA Healthcare, Sentara Healthcare, and Piedmont Healthcare take health insurance giant Anthem to court over its new policies that restrict outpatient imaging and emergency department (ED) reimbursement.
Anthem's imaging policy precludes coverage for most advanced imaging performed in hospitals on an outpatient basis. A spokeswoman for the Indianapolis-based insurer did not say where the policy is currently in effect, but the company has said it planned to expand it to all 14 states it operates in by March 1. The ED policy, which was in six states as of February, allows Anthem to deny coverage for visits by commercially insured members it later determines were not emergencies.
The hospitals argue their contracts with Anthem, through its Blue Cross and Blue Shield affiliates, require all parties to agree to such material changes to the policies. They also say the imaging policy isn't really about medical necessity, as Anthem has said, because the insurer allegedly granted exemptions for hospitals that agreed to accept lower rates.
Dr. Christopher Stanley, a director with Navigant who served for years as chief medical officer for UnitedHealthcare of Colorado, said cost consideration is indeed part of health insurers' definitions of medical necessity. From the payer standpoint, services covered under hospital-based contracts tend to cost two to three times more than the same ones performed at free-standing clinics, he said.
"Many health plans have incorporated in their definition of medical necessity to also say that if the same service can be provided at a lower cost, it's not medically necessary to have the procedure done at a higher-cost location," he said. "So they include concept of affordability."
Ultimately, the complaints argue that Anthem's policies will not only harm hospitals financially, they may harm patients by potentially causing them to delay or forgo necessary care.
Part of the reason Anthem's policies in particular are making such a splash is because they're targeting providers themselves. Other carriers have focused on "educating" patients about less-expensive options, a tactic that doesn't get as much attention, Stanley said.
UnitedHealthcare, for example, charges higher co-pays for MRI scans performed at hospitals compared with outpatient facilities, he said.
"We didn't prevent, deny that type of care, but we saw a huge shift in utilization patterns to where people started using the free-standing facilities a lot more."