Nebraska hospitals say it's getting harder to get insurers to pay them

Julie Lattimer had had a pretty good experience with Bright Health for most of the time she had a health insurance policy with the company, so she was surprised when a routine $60 lab charge was denied back in August.

The Lincoln woman said she was even more surprised by what the lab told her: Bright Health apparently wasn't paying the claim because it had run out of money.

The Minneapolis-based insurer, which started offering policies in Nebraska via the Affordable Care Act Marketplace in 2020, announced earlier this year it would cease offering policies in most states, including Nebraska, next year.

The move was largely because of financial woes at the startup company, which reported a $1.2 billion loss in 2021.

It's not clear if other Nebraskans insured by Bright Health have had an experience similar to Lattimer's. The Nebraska Department of Insurance said it could not comment on Bright Health's financial condition and whether it had received any complaints about the company.

But the company has had issues in other states. In April, Colorado fined Bright Health $1 million after receiving numerous complaints from residents about the insurer not paying claims in a timely fashion.

In addition, there have been nearly 200 complaints to the Better Business Bureau about Bright Health over the past three years, the majority of them relating to claims not being paid or payments not received in a timely manner.

Lattimer said she's spoken with a representative from the company who now says her claim will be paid, but it will take 30-60 days, meaning it will wind up taking four to five months to pay what she called "a little tiny claim."

Bright Health did not respond to a request for comment.

While Bright Health may be an anomaly in terms of the extent of its payment issues, hospitals and other health providers say they are encountering more problems in getting payments from the health insurance companies they work with.

"As a whole, the insurance industry has been slowing down payments," said Mike DeWerff, Bryan Health's chief financial officer.

DeWerff said he's recently seen an uptick in the amount of time it takes for commercial insurers to pay a claim Bryan submits, something that in the past averaged about 50 days.

"I'd say we're up a little bit, maybe five days, so maybe 10%," he said.

DeWerff also said the Lincoln-based hospital system is seeing more claim denials.

In 2019, before the coronavirus pandemic, Bryan averaged receiving about 800 insurance claim denials per quarter, he said. That increased to about 1,000 denials per quarter over the past couple of years and about 1,200 per quarter in the second half of this year.

"The denials are way up in the last year," DeWerff said.

The most recent data from the National Association of Insurance Commissioners showed a slight uptick in denials last year, reaching 15% compared with 14.5% in 2020. However, that was still lower than in 2018 and 2019, when denial rates were 16.9% and 15.3%, respectively.

But a study from consulting firm Kaufman Hall shows that denials likely have increased this year. The study reported that two-thirds of hospitals reported an increased rate of claims denials in 2022.

Bryan in not the only health care organization to report problems with health insurers.

Janna Cline, chief financial officer of Faith Regional Medical Center in Norfolk, said she's encountering more issues with insurance companies and has seen the hospital's relationship with some of those companies deteriorate.

"Insurers are really trying to reduce what they pay us," Cline said during a Zoom meeting last month with the Nebraska Hospital Association. She also noted that it's taking longer than it has previously to get paid.

"We've had some claims here internally that (are) 18 months old that we are having trouble getting insurers to pay us for," she said.

It's not just payment delays and claims denials that are dogging hospitals.

"We're seeing more requirements for prior authorizations," said Jeremy Nordquist, president of the Nebraska Hospital Association.

When hospitals run into those roadblocks, whether it's prior authorization, a slow payer or an outright denial, they have to spend a lot of time and effort submitting appeals or trying to get their money.

For DeWerff, that's the biggest issue.

He said a health system the size of Bryan doesn't feel that big of a financial sting by being paid a few days later.

What does cause a financial burden is the amount of staff Bryan has to have just to deal with insurers.

DeWerff said the company pays $2.5 million a year in salaries to 45 people who do nothing but work on preapprovals for care.

"Our biggest frustration is what we have to spend on the administrative burden," he said.

Ivan Mitchell, CEO of Great Plains Health in North Platte, agreed, saying insurers' tactics are leading to "a bureaucratic mess in making it more difficult to get paid."

He decried what he said are "a lot of bad players in health care right now," singling out private companies participating in the government's Medicare and Medicaid programs.

For example, Mitchell said the three managed Medicaid companies Great Plains works with "all find different ways to deny claims."

He also called Medicare Advantage, which is a system where private companies bundle people's Medicare benefits into a package and add certain perks, "Medicare Disadvantage," and said those companies also look for ways to deny claims and not provide the services they promise.

The state Department of Insurance lumps all complaints against insurance companies together, so it's difficult to know if there have been more complaints about health insurers, but it's possible, since overall insurance complaints are up.

As of Wednesday, the department reported 498 complaints so far this year, which is more than in either 2020 or 2021, although it's well below pre-pandemic numbers.

America's Health Insurance Plans, a trade group that represents health insurance companies, did not respond to a request to comment for this story. But in a May letter to the Centers for Medicare and Medicaid Services, its president and CEO defended the practices of companies that provide Medicare Advantage plans.

"We are quite aware that certain provider organizations would prefer that all clinicians be given a blank check to order any test or procedure at any time, regardless of the expected value or expense to the patient," Matthew Eyles wrote.

"But giving clinicians carte blanche is no way to improve health care affordability and access for every American — and we have known for decades that more medical care does not equate to better care."