UnitedHealthcare is Steering Patients Away from Hospitals to Cheaper Care

03 November 2019 - Ci Magazine
magnifying glass over UnitedHealthcare logo

UnitedHealthcare has a new policy. It is the Site-of-Service Medical Necessity Review Policy. This new policy essentially shifts the burden of proving that a hospital site is necessary for the outpatient procedure a patient is having performed onto the patient and his or her physician/surgeon. Consequently, this new Site-of-Service Medical Necessity Review Policy just adds another level of difficulty to UnitedHealthcare’s pre-authorization system: A system that is already extremely complex.

UnitedHealthcare is Shifting Outpatient Surgeries and Procedures to Lower-Cost Settings

UnitedHealthcare’s goal is to redirect outpatient surgeries and other procedures to the less-expensive, ambulatory surgery centers, physician’s offices and outpatient facilities that are located outside of hospitals. One of the reasons that UnitedHealthcare gives for denying certain claims is because a hospital usually charges more to perform these specific procedures than an outpatient clinic, surgery center or physician’s office would.

Physicians Complain About the Increase in Pre-Authorization Requirements

Accordingly, physicians are complaining about the increase in the number of pre-authorization requirements they must provide so that their patients’ procedures are covered. These complaints stem, in part, from the fact that health insurance companies are denying claims for certain services when these services are provided in the outpatient department of a hospital.

For example, Anthem has refused to pay for Magnetic Resonance Imaging (MRI) and Computed Tomography (CT) scans performed in the outpatient hospital setting. Another new requirement from Anthem pertains to the emergency department (ED). Anthem’s emergency department policy has resulted in immense backlash, ultimately leading to hospitals filing lawsuits against the insurance company. According to Anthem’s new ED policy, once a member visits an emergency department, if the company determines that the reason a member visited the ED was not representative of a true emergency, payment for that visit will not be rendered.

UnitedHealthcare’s Site-of-Service Medical Necessity Review Policy

Starting Nov. 1, 2019, UnitedHealthcare will no longer pay for certain surgical procedures that are delivered in an outpatient hospital setting, that is, unless, due to medical necessity, the surgery must be performed at the hospital. Although this Site-of-Service Medical Necessity Review Policy is already being used for some surgical procedures, in November 2019, the number of procedures this policy applies to is expanding.

UnitedHealthcare Policies and Procedures Affected by This New Policy

Currently, this new policy applies to Affordable Care Act exchange members and fully-insured commercial group members. However, in time, the company does plan to implement a comparable policy change for the self-insured employers contracting for administrative services.

UnitedHealthcare’s Site-of-Service Medical Necessity Review Policy will apply to more than 1,100 CPT codes, some of the procedures included in this grouping are:

  • Knee replacements.
  • Colonoscopies.
  • Cardiac catheterization.
  • Biopsies.
  • Eye surgeries.
  • Pacemaker implantation.
  • Tumor removal.

Insurance Companies Are Working Towards Keeping Healthcare Money In-House

Health insurers are in the process of purchasing ambulatory surgical centers, physician offices and other lower-cost provider facilities. By purchasing these centers, offices and facilities, and then creating new policies that make it difficult for their members to attain certain outpatient services from a hospital, these insurance providers effectively have more control over where members receive their health care services.

Consider that UnitedHealth’s Optum employs thousands of physicians and that the company recently acquired the DaVita Medical Group, which owns Surgical Care Affiliates. Within this network, UnitedHealthcare now has 7,500 practicing physicians and more than 200 ambulatory surgical facilities.

UnitedHealthcare Defends Its Site-of-Service Medical Necessity Review Policy

In an email, a spokesperson for UnitedHealthcare writes that according to information gathered from the company’s internal data, an outpatient procedure performed at an ambulatory surgery center as opposed to a hospital can cut the cost for the procedure in half. She points out that this reduced cost also saves the member money.

According to UnitedHealthcare’s utilization review guideline, surgical procedures performed in hospital outpatient settings for members with more serious health conditions, including advanced liver disease and coronary artery disease, will be considered medically necessary. In addition, if any member is unable to access an ambulatory surgical center due to his or her geographical location, a hospital outpatient setting will be considered necessary. Nonetheless, it is important to note that there are restrictions to this policy and this policy does not apply to every state.

In an emailed statement, Anders Gilberg, who is the Medical Group Management Association’s senior vice president of government affairs, said, “Prior authorization requirements that delay or deny care do not support the patient experience element of the triple aim no matter how much health insurers try to spin them as such.”