Payers Pledge Support For COVID Care, But Gaps In Promises May Lead To Denials

With the COVID-19 pandemic still in full force across the United States, payers are trying to reassure patients and providers that they have no need to worry about the cost of care. America’s Health Insurance Plans (AHIP), a trade group representing health insurers, recently published a database showing the various actions taken by its members to ensure access to COVID-19 testing and treatment, including waiving cost-sharing and prior authorization requirements.

But while payers have committed to covering COVID-19 testing and treatment with no patient cost-sharing, they have said little about provider reimbursement. Indeed, a closer look at the fine print of these policy waivers reveals several problems that could potentially lead to denials and underpayments for providers without an effective appeals strategy in place.

Problem 1: Policy Expiration Dates

We have previously written about some of these waivers and flexibilities, many of which have been in place from the beginning of pandemic. However, not all payers have extended their policies to cover the duration of the ongoing public health emergency (PHE) declared by the US Department of Health and Human Services (HHS), which is currently in effect through October 23rd, 2020. Indeed, as we reported back in June, some of these policies expired as early as May 31st, 2020, when both Aetna and United Healthcare (UHC) reimposed authorization requirements for inpatient admissions as well as post-acute care. Neither of these huge national insurers reinstated their waivers even in the face of a summer infection surge across the country, meaning that hospitals still dealing with furloughs, staffing shortages, and budget shortfalls may also be faced with an uptick in authorization and concurrent review denials. Payers, meanwhile, are financially sound and fully staffed, giving them the opportunity to issue more denials, but also to review more appeals.

Problem 2: Network Requirements

Many of the policy waivers compiled in AHIP’s database come with a caveat: they apply only to testing and treatment at an in-network provider, which is significant given that many insurers today have narrow networks. Providers that accept funds from the Provider Relief Fund established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act are generally not permitted to balance bill. However, if providers receive a denial for COVID-19 testing or treatment from a non-contracted payer, they can appeal based on the CARES Act’s requirement that insurers cover the cost of COVID-19 care without cost-sharing.

Problem 3: Post-Acute Care

Closely related to the problem of network requirements is post-acute care. Narrow insurance networks may make it difficult to find a post-acute care placement for patients discharged from the hospital after being admitted with COVID-19 infection. While the Centers for Disease Control and Prevention (CDC) has confirmed that a negative COVID-19 test is not a prerequisite for discharging a patient from the hospital to a nursing home, in practice, many skilled nursing facilities (SNFs) still refuse to accept COVID-19 patients. This may compound the difficulty of finding a post-acute care placement for the patient if the patient’s insurance already has a limited number of facilities in its network, thus preventing the hospital from discharging the patient and prolonging the patient’s stay.

This concern is apparent in data published by the Centers for Medicare and Medicaid Services (CMS) for Medicare patients admitted with a diagnosis of COVID-19 through July 18th, 2020. At that point, a total of 214,804 patients with Medicare had been hospitalized with COVID-19, with a median length of stay (LOS) of 8 days and an average payment per fee-for-service hospitalization of $25,024. Out of all Medicare patients hospitalized with COVID-19, 24% were discharged to a SNF, suggesting that delays in discharge to post-acute care are a major risk for hospitals treating COVID-19 patients.

If a delay in discharge results in a medical necessity denial, providers should be aggressive about challenging the denial through the appeals process. Providers should not be held liable for a denial that occurs due to the payer’s inadequate network. Providers can argue that they made every effort to discharge the patient but were hampered by the payer’s limited network of post-acute care facilities as well as burdensome prior authorization requirements. A reasonable payer might at least be willing to consider paying the administrative day rate for inpatient care while the patient was awaiting placement, even if the patient did not meet criteria for continued stay according to the Milliman or InterQual guidelines.