It's not Ho-Ho-Ho but rather Hold-Hold-Hold during the holidays for health insurance policyholders

“I’m sorry, Mr. Patient, but we are waiting for authorization from your insurance company before we can schedule your procedure.”  Given that many families meet their insurance deductibles from routine medical issues during the year, there is always a rush at year-end to squeeze in that last procedure or two.  According to an article published in the American Medical Association blog, 44% of doctors say prior authorization (PA) requests “often or always” hold up care … 26% of physicians saying that they wait 3 days or more to receive authorization.  UnitedHealthCare stated, ‘our standard turnaround time is 10-14 days, but if the physician requests “expedited” turnaround, we can generally complete those in 24-72 hours.’ 

Another maddening aspect of health insurers is sitting on hold, sometimes for nearly an hour, to simply be able to initiate a three-way call with the provider and the insurer so that they can swap fax numbers with each other… Really, fax numbers?  If you are a network provider, shouldn’t your contractual agreement already contain all the contact information?  Why does a policyholder have to connect the two?  With UHC covering more than 70 million members, a network of 1.3 million physicians, and 6,000 hospitals, it’s their obligation to lead the industry toward a better experience.    

In the Property & Casualty (P&C) insurance world, insurers are rapidly developing advanced systems to accommodate straight-through processing for auto claims. For auto claims, about 40% are either total losses or simply property damage claims with no injury.  This means that when a policyholder informs their carrier of the collision via their first notice of loss (FNOL) app and uploads a few photos of the car to the app, the insurance carrier is able to automatically determine if that vehicle is a total loss and trigger an automated series of events, dispatching a tow truck to the vehicle location and sending it immediately to a salvage yard, automatically processing the lien payoff amount and title release with the bank that holds the loan, scheduling and delivering a rental car to the policyholder, and initiating an electronic payment for the difference between the car’s value and the lien amount, all within seconds of the policyholder communicating with the app. For those vehicles that are repairable, the carrier immediately provides an estimate of repair to the policyholder, provides them with three nearby collision center recommendations, and once the policyholder chooses the repair center, can book an appointment and begin the process of getting their car repaired.  

The health insurance industry can follow suit as well.  USA Today reported that health expenditures include paying for general medicine, diagnostic procedures such as MRI scans, hospitalizations and surgeries, as well as medications and prescribed treatment. When you consider that the top 10 causes of death are heart disease, cancer, lung disease, accident, strokes, diabetes, flu/pneumonia, and kidney disease, these are all easily diagnosable. There is not much, if any debate, over whether a patient has heart disease, cancer, lung disease, etc.

If that is the case, then the vast majority of the challenge must simply be in the process. Some might say that the fraud risk is what requires these manual procedures.  According to the National Health Insurance Anti-Fraud Association, only about 3-10% of annual health care expenditures are potentially fraudulent. This tracks very closely with the percentage in the P&C world and has not stopped carriers from initiating advanced technology to bring down Loss Adjustment Expenses (LAE) and improve claim cycle times.  However, with UHC’s Cost of Goods Sold (COGS) at only 12% of total operating costs, the shareholders will have to be willing to support a multi-year program and massive investment to fully leverage the benefits of today’s technology.  

Since policyholders utilize their health insurers frequently throughout the year, they would be much more likely to download the carrier’s app than you would to file a property/auto claim. If you have had any health issues lately, you are likely very familiar with filling out the same information for every single provider that you meet with.  That app should be a central communication tool that links all the relevant providers for that policyholder and ensures a smooth patient experience.  Imagine a customer hurts their back. They go to a local chiropractor, have 5 sessions with them, still have pain, and then the chiropractor can coordinate with the primary care physician to have a steroid pack prescribed.  Policyholder still has pain, so the chiropractor refers the patient to get an MRI and schedule a follow up visit with a neurosurgeon.  Neurosurgeon reviews all the patient records and recommends a series of three lumbar injections, however, they are so busy that they can’t schedule the procedure for a month. The app could then show which local providers have the next available appointment to administer the injections and let the policyholder choose. The insurer is monitoring all these transactions, has the ability through Natural Language Processing (NLP), Artificial Intelligence (AI), Smart Triage, and other technological tools to quickly route this treatment plan to the care coordination team for review/approval, and the policyholder simply proceeds with the injections.  

Instead, the policyholder has to sit on hold with the insurer, trying to get all this coordinated, has to call multiple providers around town to figure out who has the next available appointment, all the while continuing to take the pain medication. Which would be better for the policyholder, to get the series of three injections within a 2-3 month timeframe and then be able to quit taking the medication, or, due to a series of delays with prior authorizations, scheduling challenges, etc., it ends up taking 4-5 months which means the patient took medication for two more months than necessary?  The hidden costs to the carrier include the extra medication because they were unable to coordinate care more quickly as well as the overhead/internal cost to continue to monitor that open claim for the additional two months.  Let’s hope that 2022 brings greater efficiency to the health care industry.  

Tim Christ is a Vice President at Claimatic, a SaaS intelligent decisioning software that serves several P&C insurers.  He is the author of two books on insurance, business, and technology, a speaker at industry events, and a frequent contributor to various insurance publications.  Contact him at tchrist@claimatic.com.