Anthem Blue Cross, the country鈥檚 second-biggest health insurance company, is behind on billions of dollars in payments owed to hospitals and doctors because of onerous new reimbursement rules, computer problems and mishandled claims, say hospital officials in multiple states.
Anthem, like other big insurers, is using the covid-19 crisis as cover to institute 鈥渆gregious鈥 policies that harm patients and pinch hospital finances, said Molly Smith, group vice president at the American Hospital Association. 鈥淭here鈥檚 this sense of 鈥楨veryone鈥檚 distracted. We can get this through,鈥欌 she said.
Hospitals are also dealing with a spike in retroactive claims denials by UnitedHealthcare, the biggest health insurer, for emergency department care, AHA says.
Disputes between insurers and hospitals are nothing new. But this fight sticks more patients in the middle, worried they鈥檒l have to pay unresolved claims. Hospitals say it is hurting their finances as many cope with covid surges 鈥 even after the industry has received tens of billions of dollars in emergency assistance from the federal government.
鈥淲e recognize there have been some challenges鈥 to prompt payments caused by claims-processing changes and 鈥渁 new set of dynamics鈥 amid the pandemic, Anthem spokesperson Colin Manning said in an email. 鈥淲e apologize for any delays or inconvenience this may have caused.鈥
Virginia law requires . In a Sept. 24 letter to state insurance regulators, VCU Health, a system that operates a large teaching hospital in Richmond associated with Virginia Commonwealth University, said Anthem owes it $385 million. More than 40% of the claims are more than 90 days old, VCU said.
For all Virginia hospitals, Anthem鈥檚 late, unpaid claims amount to 鈥渉undreds of millions of dollars,鈥 the Virginia Hospital and Healthcare Association said in a June 23 letter to state regulators.
Nationwide, the payment delays 鈥渁re creating an untenable situation,鈥 the American Hospital Association said in a Sept. 9 letter to Anthem CEO Gail Boudreaux. 鈥淧atients are facing greater hurdles to accessing care; clinicians are burning out on unnecessary administrative tasks; and the system is straining to finance the personnel and supplies鈥 needed to fight covid.
Complaints about Anthem extend 鈥渇rom sea to shining sea, from New Hampshire to California,鈥 AHA CEO Rick Pollack told KHN.
Substantial payment delays can be seen on Anthem鈥檚 books. On June 30, 2019, before the pandemic, 43% of the insurer鈥檚 medical bills for that quarter were unpaid, according to regulatory filings. Two years later that figure had risen to 53% 鈥 a difference of $2.5 billion.
Anthem profits were $4.6 billion in 2020 and $3.5 billion in the first half of 2021.
Alexis Thurber, who lives near Seattle, was insured by Anthem when she got an $18,192 hospital bill in May for radiation therapy that doctors said was essential to treat her breast cancer.
The treatments were 鈥渆xperimental鈥 and 鈥渘ot medically necessary,鈥 Anthem said, according to Thurber. She spent much of the summer trying to get the insurer to pay up 鈥 placing two dozen phone calls, spending hours on hold, sending multiple emails and enduring unmeasurable stress and worry. It finally covered the claim months later.
鈥淚t鈥檚 so egregious. It鈥檚 a game they鈥檙e playing,鈥 said Thurber, 51, whose cancer was diagnosed in November. 鈥淭rying to get true help was impossible.鈥
Privacy rules prevent Anthem from commenting on Thurber鈥檚 case, said Anthem spokesperson Colin Manning.
When insurers fail to promptly pay medical bills, patients are left in the lurch. They might first get a notice saying payment is pending or denied. A hospital might bill them for treatment they thought would be covered. Hospitals and doctors often sue patients whose insurance didn鈥檛 pay up.
Hospitals point to a variety of Anthem practices contributing to payment delays or denials, including new layers of document requirements, prior-authorization hurdles for routine procedures and requirements that doctors themselves 鈥 not support staffers 鈥 speak to insurance gatekeepers. 鈥淭his requires providers to literally leave the patient[鈥檚] bedside to get on the phone with Anthem,鈥 AHA said in its letter.
Anthem often hinders coverage for outpatient surgery, specialty pharmacy and other services in health systems listed as in-network, amounting to a 鈥渂ait and switch鈥 on Anthem members, AHA officials said.
鈥淒emanding that patients be treated outside of the hospital setting, against the advice of the patient鈥檚 in-network treating physician, appears to be motivated by a desire to drive up Empire鈥檚 profits,鈥 the Greater New York Hospital Association wrote in an April letter to Empire Blue Cross, which is owned by Anthem.
Anthem officials pushed back in a recent letter to the AHA, saying the insurer鈥檚 changing rules are intended partly to control excessive prices charged by hospitals for specialty drugs and nonemergency surgery, screening and diagnostic procedures.
Severe problems with Anthem鈥檚 new claims management system surfaced months ago and 鈥減ersist without meaningful improvement,鈥 AHA said in its letter.
Claims have gotten lost in Anthem鈥檚 computers, and in some cases VCU Health has had to print medical records and mail them to get paid, VCU said in its letter. The cash slowdown imposes 鈥渁n unmanageable disruption that threatens to undermine our financial footing,鈥 VCU said.
United denied $31,557 in claims for Emily Long鈥檚 care after she was struck in June by a motorcycle in New York City. She needed surgery to repair a fractured cheekbone. United said there was a lack of documentation for 鈥渕edical necessity鈥 鈥 an 鈥渋ncredibly aggravating鈥 response on top of the distress of the accident, Long said.
The Brooklyn hospital that treated Long was 鈥減aid appropriately under her plan and within the required time frame,鈥 said United spokesperson Maria Gordon Shydlo. 鈥淭he facility has the right to appeal the decision.鈥
United鈥檚 unpaid claims came to 54% as of June 30, about the same level as two years previously.
When Erin Conlisk initially had trouble gaining approval for a piece of medical equipment for her elderly father this summer, United employees told her the insurer鈥檚 entire prior-authorization database had gone down for weeks, said Conlisk, who lives in California.
鈥淭here was a brief issue with our prior-authorization process in mid-July, which was resolved quickly,鈥 Gordon Shydlo said.
When asked by Wall Street analysts about the payment backups, Anthem executives said it partly reflects their decision to increase financial reserves amid the health crisis.
鈥淩eally a ton of uncertainty associated with this environment,鈥 John Gallina, the company鈥檚 chief financial officer, said on a conference call in July. 鈥淲e鈥檝e tried to be extremely prudent and conservative in our approach.鈥
During the pandemic, hospitals have benefited from two extraordinary cash infusions. They and other medical providers have received more than $100 billion through the CARES Act of 2020 and the American Rescue Plan of 2021. Last year , and other insurers accelerated billions in hospital reimbursements.
The federal payments while serving low-income patients and rural areas struggled.
Those are the systems most hurt now by insurer payment delays, hospital officials said. Federal relief funds 鈥渉ave been a lifeline, but they don鈥檛 make people whole in terms of the losses from increased expenses and lost revenue as a result of the covid experience,鈥 Pollack said.
Several health systems declined to comment about claims-payment delays or didn鈥檛 respond to a reporter鈥檚 queries. Among individual hospitals 鈥渢here is a deep fear of talking on the record about your largest business partner,鈥 AHA鈥檚 Smith said.
Alexis Thurber worried she might have to pay her $18,192 radiation bill herself, and she鈥檚 not confident her Anthem policy will do a better job next time of covering the cost of her care.
鈥淚t makes me not want to go to the doctor anymore,鈥 she said. 鈥淚鈥檓 scared to get another mammogram because you can鈥檛 rely on it.鈥
