Why Doctors Review Health Insurance Claims

Doctors employed by health insurers help make sure members get safe and effective care — and that members’ premium dollars aren’t wasted.

When a doctor prescribes a drug, test or a course of treatment, people tend to take it at face value. Doctors have medical training and experience, after all, and often have a close relationship with their patients.

So when an insurer says it needs to approve the treatment before it will be covered, or denies a payment for a service their doctor recommended, members may balk at what seems like bureaucratic interference.

But medical review is a step health insurers take to help make sure members get safe and effective care — and that members’ premium dollars aren’t wasted.

“There are certain services that need to be reviewed to make sure there is evidence it will work for the member,” says Dr. Joseph McClaran, a medical director with the Blue Cross and Blue Shield Plans in Illinois, Montana, New Mexico, Oklahoma and Texas.

This review process is one of the key ways insurers help to hold down premium costs for everyone.

Clinicians at every step

Medical review isn’t necessary for all services. Annual physicals, blood tests and other routine care services are typically covered without review.

But some treatment plans or surgeries do require prior approval, and some claims may be reviewed after the service has been rendered. Insurers employ nurses and doctors to review cases for proper documentation, medical necessity and other criteria.

There are a few reasons a preauthorization, predetermination or claim would not be approved. The most common reason is missing documentation, according to McClaran.

As physicians, we focus on the science that supports the treatment rather than cost of the treatment.

For instance, a doctor may reference a result of an MRI in a note, but the insurer may need the complete MRI report to approve the claim.

Other times, the insurer may deem a service experimental or investigational because it isn’t proven to improve outcomes.

If a review leads to a denial, the health insurance plan sends a letter to the member and his/her physician explaining the reason the service was denied. The appeal process is explained in the denial letter.

Sometimes medical review brings something more important to the request — point of view. The medical reviewer has access to medical policies (based on evidence-based best practices that help determine medical necessity).

In one instance, McClaran reviewed a case in which a physician ordered home health physical therapy for a patient with cystic fibrosis. Essentially, the therapist would tap on the patient’s chest to loosen up mucus and decrease the chance of a lung infection. However, the patient’s benefits would only pay for 25 home health visits in a year.

As part of the review, McClaran contacted the patient’s physician. He explained the denial and made a suggestion — though the patient’s plan wouldn’t cover more home health visits, it would cover a high-frequency chest wall oscillation vest. The vest vibrates and performs the same function as the in-home therapist did, but at a much lower long-term cost.

“I knew we had a way around this, but the doctor didn’t know,” McClaran says. “I was able to point him to the durable medical equipment, associated medical policy and with this information the provider was able to secure the approval for the vest.”

Cost and crime containment

Medical review can help contain health care costs and root out fraud or waste in the system.

Some experimental procedures or medications are expensive but don’t have clinical trials proving they will benefit the member or treat the member’s condition.

“We won’t pay for a drug that’s not proven to work,” McClaran says.

Medical review helps shine a light on services that drive up the cost of care but may not help the member’s condition.

“As physicians, we focus on the science that supports the treatment rather than cost of the treatment,” McClaran says. “Of course, if evidence shows that multiple treatments have been proven similarly effective, medical policy may require a trial of the less costly treatment first.”

Additionally, the review process serves as a “checks and balance system” of sorts, says Dr. Deb Sirmans, a medical director with the five Blues Plans. “It helps catch the outliers.”

Hundreds of billions of dollars are spent each year on wasteful or unnecessary care, experts estimate.

Focus on the member

Decisions about which tests and treatments to pursue are between a doctor and a patient. The insurer determines what’s covered under a member’s plan.

While the peer review process can help hold costs in check and identify potential fraudulent or wasteful activity, the doctors who participate know in the end it’s about the member, not about the money.

In fact, that message is a key part of training Sirmans received from the five Blues Plans when she joined as a medical director.

“They always told us, use your medical knowledge and do what’s right for the member,” Sirmans says. “We are physicians who do have the members’ best interest at heart. We do take time looking at all these cases to do what we think, based on guidelines and literature is in the best interest of the member and for medical practice.”


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