Insurance Adjudication is Unnecessary; Let the PCP decide

Give the PCP bonuses for handling things in house, as well.

Introduction

Normally we discuss healthcare and health insurance in the US and today is no different.  Today we will talk about how insurance adjudication is simply a barrier to payment thrown up by legacy insurance carriers in an attempt to avoid payment of valid claims.  We will then discuss alternatives to adjudication and what other health agencies are doing about determining medical necessity.

Adjudication

Adjudication is the process the legacy insurance companies use to determine medical necessity.  Any claim that is determined to be unnecessary is denied.  There is built in conflict of interest here, though.  The insurance company has a vested interest in not paying your claim.  The more they pay for your medical care, the less profit they make.  Adjudication therefore becomes an instrument of promoting shareholder interest, that is profit, over taking care of patients.  

Adjudication is expensive as well.  A person with knowledge of medicine (if you say that fast it sounds like “doctor”) has to open, read and judge every claim entered for medical necessity. In 2023 this cost $25.7 billion. About 70% of claims are eventually paid after rounds of submit and deny.  That means that the original claim was valid at least 70% of the time and the insurance company couldn't find a good reason to deny it even after paying hundreds of people to find a reason to deny it.  Every round of claim and denial costs as much as the original.  None of this includes the cost your practitioner pays to submit the same claim over and over.

United Health is the king of denials with about ⅓ of all claims denied initially.  This reporter finds it difficult to believe that 1.3 of all claims were “medically unnecessary.”  If that were the case then all the insurance companies would deny the same number of claims.  Since that is not the case, the only conclusion is that all claims denials are suspect.

If not adjudication, then, what is the solution?

What do other Health Systems do?

In Europe, mostly whatever the GP says is gospel.  Basically if the primary care physician says you need it, then you need it.

Denmark

In Denmark, medical necessity is determined primarily by the treating healthcare professional (GP or specialist), who assesses if treatment is needed for acute illness, accidents, pregnancy, or chronic conditions that can’t wait, following national laws that broadly define care as “all necessary” but leave specifics to regions and professionals, focusing on evidence-based, effective, and cost-conscious care within the universal public system.

The Netherlands

In the Netherlands, medical necessity is largely determined by the General Practitioner (GP) acting as gatekeeper, deciding if a referral to a specialist or specific care is needed, while the Care Assessment Agency (CIZ) handles long-term care assessments for intensive needs. The system emphasizes primary care entry and a referral system, with insurers covering necessary care within the mandatory basic package, though costs are shared via deductibles and co-payments, and care is geared towards existing conditions rather than broad preventative screening.

Sweden

Sweden’s healthcare system determines medical necessity based on a set of national ethical principles and clinical guidelines that prioritize patients with the greatest need while ensuring equitable access. Decisions are made by healthcare professionals based on these established criteria, with oversight from national agencies.

Finland

In Finland, medical necessity is determined by healthcare professionals based on need, your residence status (permanent vs. temporary), and your entitlement documents (like the European Health Insurance Card (EHIC)), focusing on treatment to safely return home or comprehensive care if you’re a resident, with nurses often triaging urgency and doctors assessing specific care needs, guided by national laws and Council for Choices in Healthcare Finland’s (COHERE’s) recommendations for service choices.

Comparison Conclusions

If the rest of the world has done away with adjudication why can’t we in the US?  I am not advocating for government controlled or paid for anything, but we aren’t talking about that.  We are talking about a made up process from an entity with a built in conflict of interest, doing things exactly the wrong way, manually, that needs to be eliminated.  The payment question is so simple that even the existing bizdiot run insurance companies can issue a check or electronic payment.  

What is the Replacement?

The replacement is, of course, to let the Primary Care Physician (PCP) decide.  You won’t and can’t book a specialist, unless you are paying for it yourself, if you are, you can do what you like.  If you want a payer to cover it, then the PCP has the final call.  The patient is going to the PCP first anyway and should.  

I am going to make a little supposition here that I believe is correct.  Yes I know that belief has no place in science, and this is science, but I can’t find figures for what I want to prove.  Denying patient care, then doing the submit dance for several rounds is actually more expensive than just saying “if the PCP says you need it, then you need it.”  

Sure we can come up with “a few, uh, provisos, a, a couple of quid pro quos” or a stack of rules like Sweden and Finland or we can just trust that the oath the Danish and Dutch doctors took holds and just do what those mart people say.  Either way what the PCP says, goes.

Sure we can have arbitration, for cases where the patient says they need a procedure and the doctor disagrees, but those cases are going to be so far from the mainstream as to almost never happen,

Again, we suspect that the $25.7 billion that big insurance spends on denials is more than they would have spent by just approving everything that the doc says, particularly when you find out that they have to pay 70% of those claims anyway.

There is another benefit, too.  If we pay PCPs to keep things in house, saving everyone money, then we can give them a bonus for doing that.  Part of the oath is ‘first, do no harm,’ so we know they are going to keep the health and wellness of the patient in mind.  Some things however, just don’t need a referral and those things should warm the PCP a little bonus for saving everyone money.

As Long as We are Replacing Things

So now that we, you, dear reader, and us, have decided that Denmark and The Netherlands are doing it the right way, we can combine that with a couple of other things and automate the entire insurance industry.

Let’s posit that we could get doctors, practices and hospitals to adopt a new kind of care documentation system, one that uses data, things that you could select out of a drop down list box, to document care instead of typing in language based, text notes, then we could assign those procedures in the data payment amounts, and then we could eliminate medical coding, verification, adjudication, pre-authorization, denials, delays, insurance networks, rate negotiations, sales/brokers/agents, money for a third-party EMR, skyscrapers in every major city, hundreds of thousands of employees, all the monkey business and reduces cost by about half for the patient and about a quarter for the hospital. 

It also eliminates Epic/Cerner AND BUCAH.

Sentia has this system in production, right now, today.

Imagine a world where we have data instead of text, we eliminated legacy insurance, all their associated processes and its associated costs, and just paid the practitioner/practice/hospital for what they do as it is documented in real time.

Then imagine a world where this automation and its consequent reduction in costs becomes the de facto Electronic Medical Record (EMR) of choice because it is not only cheaper and easier for the patient, but cheaper and easier for the practitioner, practice and hospital as well.  That would probably mean that Senti ahas designed and built the World Health Records System.

Finally imagine a world where we can finally afford to keep everyone covered and in those places that have nationalized medicine, without raising taxes *Germany pays 56% on average more than you do) or having long wait times for care (the UK and Canada) or large nationalized industries (Netherlands and Denmark) to pay for it all.  Not only that, but your medical records would be available to you and your practitioner, world wide, day or night, in anyplace that has an internet connection.

Conclusions

With the data driven EMR we can completely fix healthcare finance.  We demonstrated a way to save the patient half, the hospital or practice an additional 25%, and the population of the US about 75% from the cost of healthcare.  We do this with streamlining, automation and really thinking about solving the general problem and not just the easiest way possible.

We have shown a way to revolutionize the way medical records are thought of, executed, used and searched.  This eliminates Epic, all the legacy EMR vendors and makes research a simple pick and click operation, saving millions of lives.

We have shown a way to integrate health coverage into the EMR.  The practice or hospital gets paid as the practitioner documents patient care.  That eliminates medical coding, verification, adjudication, pre-authorization, denials, delays, insurance networks, rate negotiations, sales/brokers/agents, money for a third-party EMR, skyscrapers in every major city, hundreds of thousands of employees, all the insurance monkey business and reduces cost by about half. 

It also eliminates Epic/Cerner AND the legacy insurers. Yes, that is worth reading twice.

It also makes your facility leaner faster, more efficient and more profitable.

This system includes the automation of the health insurance industry completely, eliminating more than half the costs by Sentia as the coverage company, employer based captive or TPA or by direct payments to doctors and practices.

Here are additional points detailing the costs incurred by the legacy insurance companies that you pay currently, in addition to wasting about half your premium, according to Grand View Research and current as of 2023 and that Sentia would eliminate completely:

Medical Records:

• The average practitioner spends $35,925 annually on electronic medical records
• The average patient spends $106 annually on electronic medical records
• The average patient encounter or visit cost for electronic medical records alone is $32

Medical Coding:

• The average practitioner spends $20,286 annually on medical coding
• The average patient spends $60 annually on medical coding
• The average patient encounter or visit cost for medical coding alone is $18

Compliance and Efficacy Reporting:

• The average practitioner spends $17,165 annually on compliance and efficacy reporting
• The average patient spends $51 annually on compliance and efficacy reporting
• The average patient encounter or visit cost for compliance and efficacy reporting alone is $15

Totals:

• The average practitioner spends $73,376 annually on completely avoidable costs
• The average patient spends $217 annually on completely avoidable costs
• The average patient encounter or visit cost for completely avoidable costs alone is $66

Yes, you read that correctly: $66 per visit. That is probably more than the practice makes on the average encounter.  There must be a better way. There is a better way and Sentia has it.

Remember also that these costs are over and above the 50%+ your insurance company wastes or shoves into their pockets.

Implementing this system should be fairly simple and will completely revolutionize the way healthcare is delivered and paid for, saving countless lives. We have shown a way to use this system to make the best healthcare system in the world also the most efficacious and the most affordable.

If you liked what you read contact us here, on our site, SentiaHealth.com, our parent company SentiaSystems.com, or send us an email to info@sentiasystems.com or info@sentiahealth.com.