Health Insurance Medical Policy Explained

This video provides an in-depth exploration of health insurance medical policy, a critical but often misunderstood aspect of healthcare finance. Dr. Eric Bricker, the speaker, aims to demystify these "plan documents that support coverage decisions based on medical necessity," which he colloquially refers to as the "buts" in health insurance – the specific conditions or services that health insurance companies will not cover. The core message is that these policies are extensive, highly variable across insurers, and frequently diverge from a patient's doctor's clinical judgment, leading to denied payments.

The presentation meticulously distinguishes medical policy from prior authorization, emphasizing that medical policy dictates whether a service is covered at all, regardless of pre-approval requirements. Dr. Bricker highlights the sheer volume of these policies, citing UnitedHealthcare as an example with 259 distinct medical policies outlining what they will and will not cover. He then uses the common example of obstetrical ultrasounds to illustrate the profound lack of standardization. He details how UnitedHealthcare allows one ultrasound per trimester (unless high-risk), Aetna requires meeting one of 12 specific indications in the first trimester or 27 in the second/third, Empire Blue Cross Blue Shield has 38 general indications, and Cigna permits only two ultrasounds for the entire pregnancy, each with its own set of indications.

A significant point of contention raised is the stark contrast between these insurer-defined medical policies and actual clinical practice. Dr. Bricker provides a compelling example from UT Southwestern Medical Center, where their OB/GYN practice typically performs three to four ultrasounds in the third trimester alone for normal-risk pregnancies, a frequency far exceeding what most insurance medical policies would cover. This discrepancy means that many medically reasonable procedures, as determined by a doctor, are likely to be denied coverage by insurance. The video concludes by empowering viewers with the knowledge that all medical policy denials are appealable, urging patients and doctors to fight back through multi-level appeal processes, and to assume non-coverage until proven otherwise for most healthcare services.

Key Takeaways:

• Medical Policy Defines Non-Coverage: Health insurance medical policies are official documents that explicitly outline healthcare services and conditions that an insurer deems not "medically necessary" and, therefore, will not cover, often contrary to a doctor's clinical opinion.
• Distinct from Prior Authorization: Medical policy determines if a service is covered at all, fundamentally different from prior authorization, which is the process of getting pre-approval for a service that is already deemed covered by policy.
• Extensive and Non-Standardized: These policies are vast in number (e.g., UnitedHealthcare has 259 distinct medical policies) and vary significantly from one health insurance company to another (e.g., United, Aetna, Cigna, Blue Cross plans all have different rules).
• Variability in Coverage Criteria: Using obstetrical ultrasounds as an example, the video demonstrates how coverage for even common procedures can differ drastically: UnitedHealthcare allows one per trimester, Aetna has specific indications for each trimester, Empire Blue Cross Blue Shield lists 38 general indications, and Cigna limits to two total ultrasounds with specific indications.
• Disconnect with Clinical Practice: There is a frequent and significant divergence between insurer medical policies and established clinical practices. For instance, a common OB/GYN practice might recommend three to four ultrasounds in the third trimester for a normal pregnancy, while insurance policies might cover far fewer.
• Assumption of Non-Coverage: Given the extensive and complex nature of medical policies, patients and providers should adopt a default assumption that a healthcare service or procedure might not be covered by health insurance until explicit confirmation is received.
• Empowerment Through Appeals: All denials based on medical policy are appealable. Patients and their doctors are strongly encouraged to appeal denied claims, even through multiple levels (first, second, and potentially third appeals).
• Doctor's Role in Appeals: Successfully appealing a medical policy denial typically requires the active involvement and support of the patient's doctor to provide clinical justification.
• Crucial for Healthcare Professionals: Understanding the intricacies of medical policy is essential for a wide range of healthcare stakeholders, including employee benefits professionals, HR, CFOs, insurance brokers, benefits consultants, doctors, nurses in leadership, hospital administrators, and professionals in pharma and medical device industries.
• Lack of Transparency: A significant systemic issue is that these complex medical policies are rarely explained clearly to plan members or even to many healthcare providers, leading to confusion and unexpected financial burdens.

Tools/Resources Mentioned:

• UnitedHealthcare Provider Website (for commercial policies)
• Aetna Health Care Professionals Website (for Clinical Policy Bulletins)
• Empire Blue Cross Blue Shield Provider Website (for clinical guidelines)
• Cigna Website (for coverage policies)
• UT Southwestern Medical Center's OB/GYN website/medblog

Key Concepts:

• Medical Policy: A document from a health insurance company outlining the specific medical services, treatments, or conditions that are covered or, more commonly, not covered, based on the insurer's definition of "medical necessity."
• Medical Necessity: The standard used by health insurance companies to determine if a service or treatment is appropriate and required for the diagnosis or treatment of a disease, illness, or injury, often differing from a physician's clinical judgment.
• Prior Authorization: A process by which a healthcare provider must obtain approval from a health insurance plan before performing certain services or prescribing certain medications to ensure coverage. This is distinct from medical policy, which dictates if the service is covered at all.
• Appeals Process: The formal procedure through which a patient or provider can challenge a health insurance company's decision to deny coverage or payment for a healthcare service.

Examples/Case Studies:

• UnitedHealthcare's 259 Medical Policies: Illustrates the vast number of specific rules and exclusions health insurance companies maintain.
• Obstetrical Ultrasounds: Used as a detailed example to show the wide disparity in coverage criteria across UnitedHealthcare, Aetna, Empire Blue Cross Blue Shield, and Cigna, highlighting the non-standardized nature of medical policies.
• UT Southwestern Medical Center OB/GYN Practice: Presented as a real-world example of common clinical practice (3-4 ultrasounds in the third trimester for normal pregnancies) that often conflicts with restrictive insurance medical policies, leading to denials.