“Not Medically Necessary”: Helping America’s Health Insurers Deny Coverage

TL;DR

For listenersOffer from Amazon

Turn quiet afternoons into listening time

• Thousands of audiobooks, podcasts and originals
• Listen on your phone, tablet or Echo — also offline
• Cancel anytime

Try Audible free →Free trial for new members

As an affiliate, we earn on qualifying purchases.Hide

A ProPublica and Capitol Forum investigation exposes how insurance companies rely on third-party firms like EviCore to deny medical claims, often using algorithms to manipulate approval thresholds. This practice prioritizes cost-cutting over patient needs, raising concerns about care delays and denials.

Major health insurers in the United States are increasingly outsourcing the decision-making process for medical claim approvals to companies like EviCore, which use sophisticated algorithms to deny coverage for patients. This practice, which affects over 100 million insured Americans, raises concerns about the influence of cost-cutting motives on patient care.

A recent investigation by ProPublica and Capitol Forum reveals that EviCore, owned by Cigna’s Evernorth, employs an AI-backed algorithm called ‘the dial’ that can be adjusted to increase the likelihood of denying prior authorization requests. This system is designed to scrutinize whether procedures recommended by doctors are necessary and cost-effective, but insiders say it is often manipulated to maximize insurer savings.

Internal data indicates that since 2021, EviCore has denied or partially denied nearly 20% of prior authorization requests in Arkansas, a state that publicly reports denial rates. In comparison, federal Medicare Advantage plans had a denial rate of about 7% in 2022. Former employees and industry experts describe the algorithm as being adjustable to send more requests for review, which increases the chances of denials, with some insiders admitting control over the process.

Why It Matters

This practice significantly impacts patient care, as delays and denials can prevent necessary treatments, sometimes with life-threatening consequences. It also raises questions about the influence of profit motives in healthcare decision-making, potentially undermining trust in the insurance system and leading to increased financial burdens on patients.

Background

EviCore is the largest of several companies providing outsourced medical review services to insurers, covering roughly one-third of insured Americans. Its contracts are often based on reducing healthcare costs, with claims of delivering a three-to-one return on investment for insurers. The company’s guidelines are periodically updated with medical research, but critics argue they are often rigid and outdated, leading to inappropriate denials and delays.

Industry insiders have long criticized the system, with some calling EviCore ‘EvilCore’ due to its aggressive cost-cutting practices. The use of adjustable algorithms to influence denial rates is a recent focus of investigation, highlighting the opaque nature of these cost-control tools.

“They love to deny things.”

— Barbara McAneny, former president of the American Medical Association

“We are improving the quality of health care, the safety of health care and, by very happy coincidence, decreasing unnecessary costs.”

— EviCore spokesperson

“We could control that. That’s the game we would play.”

— Former EviCore employee involved in technology

What Remains Unclear

It remains unclear how widespread the manipulation of the algorithm is across all contracts and whether regulatory agencies will investigate these practices further. The full extent of patient harm caused by these denials is also still being assessed.

What’s Next

Regulators and lawmakers may scrutinize the use of such algorithms and the transparency of denial practices. Insurers and review companies might face increased oversight, and further investigations could reveal more about the impact on patient care and healthcare costs.

Key Questions

How do these algorithms influence medical claim denials?

They can be adjusted to increase the number of requests sent for review, which raises the likelihood of denial, effectively allowing companies to control approval rates for cost savings.

Are patients aware that their care is being denied based on these algorithms?

Most patients are not aware; denials are communicated through insurance notices, often without detailed explanations of how algorithms or thresholds influenced the decision.

What can patients do if their claim is denied?

Patients can appeal the denial, often with the help of their healthcare providers, but the process can be lengthy and complex, and success is not guaranteed.

Will regulators intervene to stop these practices?

It is not yet clear whether regulatory agencies will investigate or impose restrictions on algorithmic denials, but increased scrutiny is possible given recent revelations.