Study Sheds Light on Insurance Companies’ Policies


A recent Marquette University study assessed payer policies of the three largest health care payers in each state.

By Jim Hall, CPA

Those who know me well know that I am a huge proponent of federalization of insurance laws. Now, before you stop reading, let me make it clear that I am not referring to a single payer system but a system where one set of laws are applied in all 50 states (just like interstate banking and commerce laws). In the April 2011 issue of Impact magazine, I wrote an article outlining my reasons why I feel it is necessary.

It is easy to relate anecdotal stories of why federalization of insurance laws is necessary, but without data most legislators can only sympathize. The stories are fascinating, but how big an issue could this really be? And if you are like me, who has time to sit down and gather the information necessary and put it into a meaningful document?

Enter American Physical Therapy Association Private Practice Section (APTA PPS) Payment Policy Committee members Bridget Morehouse and Mary Daulong, along with assistance from Marquette University doctoral students Stephanie Fiore, Sabrina Weng, A.J. Butts, Nico Olson-Studler, Sarah Iglar, and Danny Coppin. Under the direction of Mary Daulong, these students were tasked with the project of researching the top three insurance payers’ websites in every state. The purpose of this study was to design a document that would assist private practitioners in researching information that would be required in order to appeal claims denials or find authorization forms. However, this purpose was overshadowed by the “bigger picture.”

Their task was to locate on each payer’s website items such as Physical Therapy Medical Policy and Medical Necessity, among other things. They were then asked to use a 1 to 5 grading scale to score how easy (1) or difficult/problematic (5) it was to find the document(s) identified. The results of this exercise were exactly what all of us would have anticipated; the students were shocked at the lack of consistency from insurance company to insurance company. They anticipated Blue Cross Blue Shield would have a consistent medical policy from state to state, however that was not the case.

This document is the first step toward illustrating the problems providers experience in trying to understand what an insurer needs from them in order to get paid. By the way, the students prepared a 17-page PowerPoint presentation and 180+ pages of insurance website information along with the grading scale described. The document will eventually be made available to PPS members, and I am hopeful that a second round of this study will provide additions, which would include how long it takes to navigate the website to determine this information, as well as downloading Medical Policies, Medical Necessity information, and Pre-Authorization forms. When this is done, I anticipate adding these documents as an addendum to the original study, and this document should grow from 180 pages to thousands of pages. That document will also illustrate how easy it is to treat a patient, but how difficult and time consuming it is to appeal a $50-$150 visit when an insurer arbitrarily decides to deny coverage and tell you all you have to do is go to their website and find the policy, forms, etc., and fill them out to complete an appeal (after waiting on hold for 30 minutes to speak with someone for direction).

If you are still not convinced this is an issue, the study encompassed the top 3 payers in all 50 states. I went out to the Trizetto Clearinghouse website and downloaded their professional payer list (Institutional/Hospital payers were excluded from the list). That list does not include payers that only accept paper claims. Want to hazard a guess as to how many payers there were? There are slightly more than 6,400 payers listed. While your practice may not file claims to more than 50 payers consistently, at some point you are going to run across new payers. This new payer experience may be a messy one, and the cleanup is going to take a while.

All that said, not only will these documents help you in that process, they will also become an effective tool to carry to legislators everywhere to ask for one cohesive set of federal insurance laws that all insurers would use to compete for business. And if that’s not a large enough task, maybe state insurance commissioners could be confronted by not only state association members lobbying for insurance reform, but other health care practitioners as well. I believe that we all owe the individuals involved in this study a collective “thank you.” We will work to share this document with other medical specialties to form a unified position.

Jim Hall, CPA, is the general manager of Rehab Management Services and a member of the PPS Payment Policy Committee. Jim can be reached at

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