Probes into Aetna's Claim Denials May Not Find Much

California state regulators are investigating Aetna's coverage decisions and whether physicians properly review claims. The concerns may be overblown, however.

As the California Department of Managed Health Care and the California Department of Insurance investigate Aetna for concerns over how physician reviewers at the health insurer decide claim denials, it lends credence to skeptical health plan members who doubt whether those decisions are based on clinical facts.

The investigation stems from the lawsuit of a California man who is suing Aetna for an alleged improper denial of care. Former Aetna medical director Jay Ken IInuma, MD, stated in a deposition that he did not examine the patient's records before deciding whether to deny or approve care, relying instead on information provided by nurses who reviewed the records.

When that statement was made public, the California Department of Managed Health Care and the California Department of Insurance announced that they are investigating Aetna’s policies and procedures for approving or denying claims.

Related: California launches investigation following stunning admission by Aetna medical director

The investigations may raise hopes of a "gotcha" moment for anyone who doubts that health plans have good intentions for their members, but they may not find much in the end, says Richard Trembowicz, JD, associate principal with ECG Management Consultants in Boston.

The medical director's statement may not be an admission of guilt that it first appears to be, he says.

It is common for health plans to have non-physicians review claims and then require physician reviews for claims that are appealed, Trembowicz notes.

It appears the claim in question in the lawsuit was at the appeal level, and that's why a physician was involved at all, he says.

Trembowicz says the medical director's statement may have been acknowledging that he only looked at the non-physician's notes to confirm the reason for the denial was outdated lab work, a simple and easily remedied issue, and no clinical assessment was needed.

"In a ministerial case like that, the medical director may not review the medical record because there is no need to review medical information and make a clinical assessment," Trembowicz explains.

"It's not clear yet whether the denial was because of the missing blood work or if it was deemed not medically necessary, but that's a big difference. If it was just missing blood work, it's no surprise that the doctor didn't study the medical record. It could be a technical violation of policy, an instance of cutting corners, but it doesn't rise to the level that some people are making this out to be," he says.

That doesn't mean that Aetna has done nothing wrong, Trembowicz says.

The medical director's statement may be sufficient for the state to find fault with how this particular claim was handled, he says, even if there is no problem with Aetna's overall policies and procedures.

"If that is what happened, it's probably a technical violation of Aetna's internal policy and the requirements of most states," Trembowicz says. "I would see this as pretty atypical. Insurance companies keep records of all appeals and decisions, including the physician who signed off on it, and their electronic records indicate whether the physician accessed the relevant documents. I don't think this situation is common at Aetna or with any other insurer."

Trembowicz notes that the media attention to this case plays into the hands of critics who allege health plans deny legitimate claims for financial reasons.

Another insurer, Anthem, has been criticized for its policy in some states denying coverage for emergency department claims when the complaint turns out not to be a true emergency, and the Aetna dispute adds fuel to that fire, he notes.

"None of this is good for Aetna or other health plans. If people are reading the news and seeing that claims are denied and the physician reviewer doesn't even look at the medical record on appeal, that's a terrible impression for Aetna," he says. "But on the facts of this case, it may be far less egregious than it appears at first."

In a February 14 hearing about this lawsuit, Orange County Judge John C. Gastelum said that the accounts in the media presented "clearly a totally one-sided story."

Aetna issued a statement clarifying that "medical records were in fact an integral part of the clinical review process" for the disputed claim and included a sworn statement from the doctor saying, "In addition to reviewing the relevant portions of submitted medical records, it was also generally my practice to review Aetna nurses' summaries, notes, and the applicable Aetna Clinical Policy Bulletins."