CEO SUMMARY: UnitedHealthcare directly tackled the issue of out-of-network labs waiving or capping copayments, coinsurance and deductibles that are to be paid by patients. In a network bulletin this month, UHC said that such arrangements may violate federal law and could lead to state insurance department investigations into false claims. In the same bulletin to physicians and other providers, UnitedHealthcare also said it would require prior authorization for all genetic tests beginning later this year.
IN ITS LATEST NETWORK BULLETIN, UnitedHealthcare warned out-of-net- work laboratories not to waive or cap patients’ copayments or deductibles. In the same bulletin, it also announced that it will require prior authorization for all genetic tests later this year.
In a bulletin to providers March 1, UHC says: “Effective Q3 2016, UnitedHealthcare will require care providers to obtain prior authorization for genetic testing for our commercial members. Details on how to request prior authorization, the genetic testing policy to be used in the review process, and other information will be included in a future Network Bulletin newsletter and on our physician portal.”
On the issue of waiving patients’ fees, UHC is specific and threatening. “Some nonparticipating labs attempt to attract customers by waiving or capping copayments, coinsurance or deductibles. Such arrangements undermine the benefit plan by eliminating incentives created to encourage members to choose to receive care within the network and to discourage overutilization of services,” says UHC, the nation’s largest health insurer.
“UnitedHealthcare’s benefit contracts exclude coverage for any out-of-network lab services for which the provider waives the coinsurance, copayments, or deductibles. In addition, routine waiver of coinsurance, copayments, or deductibles may be a violation of the federal False Claims Act, subject to investigation by the Office of the Inspector General and/or any applicable state insurance department’s fraud division,” wrote UHC.
referrals To Network Labs
The bulletin also explains that UHC’s network includes “more than 1,500 clinical reference laboratories.” In-network physicians and other providers “are expected to refer our members to network laboratories for clinical lab and anatomic pathology, unless otherwise authorized by UnitedHealthcare consistent with their participation agreement,” the bulletin says.
UnitedHealthcare officials did not respond to a request for comment.
The warning about waiving patients’ payments is likely a result of leaving so many laboratories out of its network, stated Linda D. Liston, CPC, Director of Managed Care Services for McKesson Business Performance Services.
“UnitedHealthcare gets a lot of out-of-network charges because it won’t give small, local, or regional labs contracts. We know this from our experience with UHC,” she explained.
“When we tell UHC that it is receiving a large number of lab test claims for UHC members in a particular area and that is a reason why it should contract with those local or regional labs, its officials say, ‘We’ve got our national agreement and don’t need another lab or pathology group,” explained Liston, who has served as McKesson’s director of managed care services for 20 years.
Battle To Get Lab Contracts
“With UHC, it’s a constant battle to get contracts,” she added. “But UHC is not alone,” she continued. “Some insurers say that, if out-of-network labs waive patients’ co-insurance or deductibles, they drop the allowable charge by 20%.
“We also see health insurers write into their commercial contracts that labs cannot waive the 10% or 20% co-insurance payments that patients are required to pay,” she said. “But waiving of copayments is not the only problem UHC has with out-of-network labs.
“We speak with UHC almost every day about our lab clients,” noted Liston. “If a lab client needs a contract, we explain how—when UHC has an in-network hospital—it needs to have an in-network lab too. Otherwise, UHC members will expect in-network prices for lab work but get hit with out-of-network charges. Even after we explain that, it often takes UHC many months to years to get a contract implemented.
“Here’s an example,” she said. “We work with many independent labs that provide laboratory services for local hospitals because hospitals outsource that lab work. For any hospital lab that doesn’t have a histology section, then the independent lab does the technical component (TC) and bills for that service. But if that independent lab is out of network, then the patient gets hit with a higher deductible and coinsurance.
“Also, the pathologist bills for the professional component (PC) and that pathologist or pathology group also needs to be in-network for the UHC patient to get in-network pricing for all the services provided in that episode of care,” she added.
“Most of the time we see a pathology group practice doing the PC, but the hospital’s lab is responsible for the TC,” explained Liston. “Thus, how does the pathology group get paid by commercial insurers? It needs a contract to be a member of the payer’s network for the services it provides to the hospital’s inpatients.
“But then UHC—and other health insurers too—will say, ‘It’s not that big of a deal.’ In fact, yes, it is a big deal,” Liston said. “Insurers need to realize that any of their patients in this situation will get an in-network bill for the technical component (TC) service performed by the hospital’s histology lab, but an out-of-network bill for the professional component (PC) that is performed by the pathology group.
TC/pC Baffles Insurers
“In these situations, UHC tells us, ‘We have a national lab and can outsource the technical component,’” she added. “But in this instance, we’re talking about inpatient services. How does UnitedHealth outsource hospital inpatient work to a national lab? UHC’s staff needs to understand how their policies can affect their beneficiaries negatively.
“These are the reasons why it is logical to believe UnitedHealthcare continues to have a lot of lab leakage,” surmised Liston. “We see labs and pathology groups across the country that are out-of-network, yet they have a significant payer mix—including work from UHC. It may not be 50% of their volume, but it could be 10% to 15% of their payer mix.
“The bottom line is UHC—and other insurers—should have more in-network labs where they need them most, concluded Liston.
Contact Linda Liston at 936-564-6002 or Linda.Liston@McKesson.com.
Gene Test Pre-Approval Coming to UnitedHealth
AS CLINICAL LABORATORIES KNOW, most health insurers have limited coverage for genetic tests. But each payer seems to adopt its own approach.
“You have different payers doing different things in how they cover genetic tests,” observed Linda D. Liston, Director of Managed Care Services for McKesson Business Performance Services.
In its network bulletin dated March 1, 2016, UnitedHealthcare plans to adopt its own solution to coverage by requiring prior authorization for genetic tests beginning in the third quarter. UHC says it will explain the prior-authorization process sometime in the coming months.
“By requiring prior authorization now, United Healthcare is coming rather late to the game,” noted Liston. “Other insurers already have these processes in their plans. Some lab professionals speculate that this policy statement makes it appear that UHC is taking a step that they think will help drive their lab business to what they consider their preferred or participating labs.
“UnitedHealthcare is like every other insurer, trying to control costs and steer their patients to in-network or participating labs,” she stated. “The question now is whether they will use a system like Laboratory Corporation of America’s Beacon Laboratory Benefit Services—which they have in Florida—in other states.”
BeaconLBS is a clinical decision support system that physicians are required to use for pre-notification and prior authorization for some 80 laboratory tests for UnitedHealthcare’s commercial HMO patients in Florida. (See TDR, July 21, 2014.)
Waiving Lab Patient Fees Invites Payer Audits, Suits
IN RECENT YEARS, private health insurers and federal healthcare prosecutors have begun to pay attention to the business practices of some lab companies soliciting physician lab test referrals while promising to never bill their patients for the co-pays, out-of-pocket, or deductible amounts required by their health plan coverage.
The practice of waiving patient fees has been an issue in several recent high-profile federal whistleblower cases where settlements were announced. One such case involved Health Diagnostics Laboratories, Inc., and Singulex, Inc., and the settlement was announced on April 9, 2014. Both labs settled while denying the charges. (See TDR, April 20, 2015.) Another federal settlement involved Millennium Healthcare, a toxicology and pain management testing company. This settlement was announced on October 19, 2016, and Millennium denied the charges. (See TDR, November 16, 2015.)
Last year, Aetna, Inc., and Cigna filed lawsuits against Health Diagnostics Laboratory, claiming that HDL did not bill patients for their share of the lab test fees and seeking tens of millions of dollars.
Also, during 2015, THE DARK REPORT was first to publicly alert clients and readers that some health insurers, when auditing laboratories, were now seeking documentation that, for the lab test claims being audited, the laboratory had billed patients for the required copays and deductibles. (See TDR, August 24, 2015.)