Major Health Insurer
BY KRISTEN HWANG , CalMatters
Medical insurance delays can keep someone in a hospital bed much longer than they need to be waiting for after-care services like home health care. Those delays can also block hospitals from using beds needed for new patients.
California hospitals have long complained about those delays, and in a new lawsuit, they’re suing one of the state’s largest health insurers to force it to speed its approvals of secondary treatment.
The California Hospital Association, which represents more than 400 hospitals, filed the complaint against Anthem Blue Cross in Los Angeles County Superior Court Tuesday. The complaint alleges Anthem is violating the state’s long-standing patient protection laws, which require insurers to provide health care in a timely manner, and engaging in unfair business practices. It also claims that Anthem refuses to pay for the excess hospital days caused by its delays.
“Anthem’s misconduct creates an impossible situation for patients and hospitals,” the lawsuit states.
Although the lawsuit targets Anthem, hospital association President Carmela Coyle said delayed discharges are an industry-wide problem.
“This is a long time coming,” Coyle said. “California has some of the strongest laws in the nation governing insurance protection of patients, and these laws are violated every day.”
A spokesperson for Anthem said the company did not have an immediate response and would be investigating the allegations.
Anthem is the largest health insurer in the state, excluding Kaiser Permanente which contracts almost exclusively with its own hospitals. Anthem represents approximately 6 million Californians, nearly twice as many as the next biggest insurer.
Every day, 4,500 Californians spend unnecessary time in hospital beds waiting for health insurers to approve their discharge to a secondary facility, a recent report from the California Hospital Association says. That results in 1 million days of needless hospital care annually, the report said.
Coyle said the association has raised the issue with the Department of Managed Health Care, which oversees most health insurers.
In a statement, department spokesperson Kevin Durwara said the agency has been meeting with the hospital association to address hospitals’ “concerns and challenges” with insurance delays since 2021. The meetings resulted in a letter issued to insurers in Fresno County, where hospital capacity was particularly limited, instructing them to make it easier for hospitals to discharge patients.
State law does not specify how quickly insurers must approve hospital discharges to post-acute care and that complaints about delays are addressed on a case-by-base basis, the statement said. State law does however define how quickly patients need to be able to see a doctor for appointments.
Anthem met the access standards for urgent and non-urgent appointments 66% of the time in 2022, according to the most recent state data.
How insurance delays hold back patients
In general, health insurers are required by law to arrange for and authorize post-hospitalization care for patients in a timely manner. For example, a stroke patient may no longer need to be hospitalized but may need to be sent to a skilled nursing facility to continue recovering. Hospitals are not allowed to discharge patients who need additional services without authorization from insurers.
Patients who no longer need to be hospitalized spend an average of 14 extra days in the hospital as a result of insurance delays, according to a recent point-in-time survey from the hospital association. Those who need to be transferred to a mental health facility are stuck for even longer, spending 27 unnecessary days in the hospital on average.
Medi-Cal patients fare the worst, accounting for 46% of all unwarranted hospital days, according to the survey.
“This is basically a daily occurrence,” said Vicki White, chief nursing officer at Henry Mayo Newhall Hospital in Santa Clarita.
Across the state, the hospital association estimates delays cost hospitals an estimated $3.25 billion in unneeded hospitalization each year and contributes to overcrowded conditions in hospitals and emergency rooms.
Last winter during the seasonal respiratory virus surge, White said her emergency department had between 20-30 people waiting for a bed daily, in part, because discharge delays prevented the hospital from freeing up bed space.
“We are blocking 4,500 beds a day for people who need care,” Coyle said. “That is a serious problem.”
California doctors see long waits
The average number of days patients spend in hospitals increased by 9% in 2022 compared to 2019, partially because of discharge delays, according to a report from the California Health Care Foundation.
Dr. Sean Mairano, chief medical officer at Enloe Health in Chico, said in his experience insurance denials and delays have gotten worse over time. Frequently insurers will take days to respond to a request from a physician or won’t respond at all.
For example, the lawsuit describes a patient with “catatonic schizophrenia” that needed to be admitted to a full-time psychiatric treatment center. The lawsuit alleges that Anthem’s delays in finding an appropriate facility for the patient to be discharged to resulted in eight extra days of hospitalization.
“In extreme cases, people will be here for weeks or months on end awaiting decisions from insurance companies,” Mairano said.
What results is patients not getting the speech or physical therapy or other services they need to fully recover. Sometimes, patients get so frustrated they leave the hospital against medical advice and end up back in the emergency room days later, Mairano said.
“From the clinician’s standpoint it’s obviously frustrating (but) it’s really the patients who are stuck in the middle. It’s not their fault. They’re just trying to get well,” Mairano said.
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