Arizona medical providers, patients say they are facing rising insurance claim denials

PHOENIX – Brittany Panico has seen insurers increasingly deny critical drugs and delay approvals for her patients, most of them living with complex autoimmune diseases.

At a town hall about medical claim denials organized in September by Arizona Attorney General Kris Mayes, Panico, a Gilbert rheumatologist, shared the story of a patient with uncontrollable gout.

"It's the single drug that's FDA approved for this diagnosis," Panico said. "We just got it approved last month. We've been appealing since October, so almost a full calendar year of appeals."

A small room, filled with medical providers, patients and lawyers, listened intently, desperate to share testimonies like Panico's.

"A lot of chronic diseases cause disability if they are left untreated … I have hundreds of these stories," Panico said.

If an insurance company denies the claim, the payment comes out of the individual's pocket. Arizona had an average in-network insurance denial rate of 21% in 2023, according to Kaiser, higher than the national average of 19%.

Despite recent initiatives that erased medical debt for hundreds of thousands of Arizonans, a rising number of insurance denials is undermining those efforts.

The problem could also be exacerbated by a new reimbursement policy going into effect on Wednesday from Cigna Healthcare.

Providers, like Panico's Summit Rheumatology, use Cigna to receive reimbursement for the medical services they provide.

Cigna's new policy, Evaluation and Management Coding Accuracy (R49), restructures many insurance claims and potentially reimburses medical providers at a lower rate based on the complexity of the claim and the sufficiency of evidence to justify it.

"So instead of us getting reimbursed for the services we provide, they are automatically lowering our (service) worth," Panico said.

Denied medical coverage is a persistent issue, with insurers often blaming improper coding, missing information, unmet criteria or the absence of submitted claims. According to the town hall speakers, communication channels between providers and insurers can become clogged or even silent.

Nancy Higgins schedules new patients and procedures at Pioneer Sports and Spine, a small pain management clinic in Gilbert.

"Cigna basically denied all of our claims," Higgins said at the town hall. "We had about 80 claims we submitted, and then we called Cigna because we didn't get paid, and they said we didn't have any claims on file. We had about $50,000 that Cigna owed us."

Cronkite News reached out to Cigna, Blue Shield Blue Cross, Humana, UnitedHealthcare and Aetna for comment. Only UnitedHealthcare responded, stating that it approves 98% of claims –a statement that could not be independently verified.

When a reimbursement claim is denied, medical providers can appeal the claim; however, these appeals take time.

"We spend every fifth week basically arguing with the insurance companies," said Kenneth Mishark, a medical practitioner at the Mayo Clinic who attended the town hall. "There's subjectivity, and then there's stupidity, and quite honestly, it's not absent that they tend to cross that line."

This sentiment is not uncommon in the medical world, as this reality places a burden on everyone within the health care system. Yet, large healthcare organizations, such as Mayo, can fight back, while smaller providers often lack the resources or staff to pursue the appeals process.

"I pay my medical assistant to sit on the phone for hour after hour; meanwhile, patients are calling asking for help but cannot get through because my medical assistant is on the phone trying to obtain authorization," Panico said. "It impacts the economy of our office structure."

The constant struggles with insurance companies have caused the number of cash-pay clinics to "skyrocket," Panico said.

These fast-service medical providers do not accept any form of insurance and instead rely on direct payment from the patient, circumventing insurance-related reimbursement.

"We can't make a living by helping patients with insurance; we have to have access to revenue through some other way," Panico said. "I think it speaks volumes to why we are frustrated … I dropped three plans this year because they refused to pay me. We have to essentially tell patients we can't see them because their insurance won't reimburse us."

Recent trends have shown that patients are seeking out cash-pay clinics, and providers prefer this system for increased revenue and fewer administrative obstacles. However, Arizonans will likely feel the strain of reduced availability of medical clinics that work with their insurance.

The Attorney General's Office has planned several town halls throughout the Valley to hear from medical providers and patients, with the potential to pursue legal action against insurance companies for violation of the Arizona Consumer Fraud Act.

"I do not intend to delay on this," Mayes said. "We have already opened an investigation into this. We have attorneys working on this diligently."