May 28, 2022

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Free Covid-19 tests are only “free” if you can figure out insurance reimbursement

Do you have a printer? Do you have a fax machine? If not, you might have trouble getting your “free” at-home Covid-19 test paid for by your health insurer.

As of January 15, Americans with private insurance are able to submit their at-home testing bills to their insurer in order to get reimbursed. But for some people, that may be easier said than done. Some insurers are letting their customers submit their bills online, but others are requiring people to physically print a piece of paper that resembles an IRS form, fill it out, and then either send it to their insurer through the mail or fax it.

A quick scan of social media finds Americans who sound baffled by what they are being asked to do in order to secure free Covid-19 tests in the middle of a public health emergency.

People can also order free tests through a new government website, covidtests.gov. But they are limited to four tests per household, which may not be enough for the people who have been exposed or need to test regularly.

Asking a patient in the year 2022 to send a fax in order to have their medical services paid for may sound laughable. But it’s a microcosm of the burdens the US health system puts on Americans in order to receive necessary health care.

“Our health care system is mind-numbingly complex,” said Larry Levitt, executive vice president at the Kaiser Family Foundation, “and that complexity takes its toll on patients in terms of time, access, and affordability.”

The United States health system, more than any other in the developed world, forces patients to manage their health care on their own. They pay a lot of their own money for medical care. They have to make sure their specific doctor is covered by their specific insurer. And even if their doctor believes they need a certain treatment, patients must follow rules set by their health insurer, or risk delays in treatment or ultimately having their insurance claims denied.

Patients run into these obstacles all the time — with serious consequences for their well-being. A recurring finding in health care research is that when patients run into any friction, whether high cost-sharing, limited access to providers, or something else, they tend to receive less timely and appropriate care. Over time, that will make people more likely to develop serious health conditions and, ultimately, die younger than they would with proper care.

It starts with the sheer cost of health care to US patients. Out-of-pocket spending per person is higher in the US than in any other wealthy country save Switzerland, and roughly twice as much as in countries like the UK, the Netherlands, and Japan. Recent research has found that even small cost obligations, as little as $10 for a prescription, can discourage patients from taking their medicine as prescribed. A third of Americans have reported in public opinion surveys that they skip medications or other necessary medical care because of the cost.

But the US health system puts up other, subtler hurdles. Insurers don’t cover care at every doctor’s practice or hospital; they instead contract with certain providers to create provider networks, within which their patients must seek care for their treatment to be covered. These networks put the onus on patients to figure out where they can go for care, at the risk of incurring huge medical bills if they get it wrong. That problem came to the forefront in the recent debate over surprise billing: Many people were going to the hospital for an emergency, only to find out after the fact that either the hospital or a doctor who treated them was not covered by their insurer.

That has been a common experience for American patients: About one in four heart attacks lead to the patient being charged for out-of-network care in the emergency department or if they are admitted.

Networks also make shopping for health insurance more difficult. Patients have to try to figure out in advance whether their existing primary care doctor or specialists, or the local hospital, will be covered by their new plan. Levitt told me he had recently been helping a friend shop for an insurance plan through the Affordable Care Act and ran into that problem.

“There have been multiple calls with the marketplace, the insurers, and doctors’ offices,” Levitt said. “It’s hard to get straight answers. I’m a health insurance expert and he’s got an MBA from Harvard.”

Patients can run into the same kind of problem with drug formularies, a list of approved drugs that health plans use to prioritize coverage for certain medications. If a drug is not on a plan’s formulary, customers must pay more of their money than they would for approved drugs. Sorting out which drugs are covered or preferred under a health plan’s formulary can be a headache, and research has shown that such restrictions lead to patients using fewer medications.

And even when care is ostensibly covered, it can be hard to actually get it paid for. The complicated reimbursement for Covid-19 tests is one striking example. Another common barrier is prior authorizations — when an insurer won’t cover a test or a procedure unless the health care provider has requested and received permission ahead of time.

In both academic research and provider surveys, prior authorization requirements tend to lead to treatment delays, even though most requests do eventually get approved. Forcing patients and doctors to take this extra step doesn’t seem to weed out unnecessary care, but does lead to delays for care that is ultimately deemed necessary.

It’s a needlessly complicated process that provides little benefit but creates plenty of problems — in other words, like the test reimbursement process, it’s the US health system in a nutshell.