What Are Some Common Cost-Containment Procedures Used By Insurance Companies?

In order to curtail health insurance costs from spiraling out-of-control, most insurance companies have instituted a variety of cost-containment features to their Individual and Group health insurance plans. Common cost-containment procedures, under which coverage may be denied or restricted, include:

1. Same day surgery admission – instead of allowing a person to be admitted the day before surgery which results in a charge for an additional day of hospitalization charges, the patient is required to be admitted the day that the surgery is to be performed.

2. Pre-admission testing – before authorizing hospitalization or surgery in a non-emergency situation, additional testing to determine whether hospitalization or surgery is required must be performed.

3. Outpatient surgery requirement – many surgical procedures may now be performed on an outpatient (non-hospitalized) basis reducing the need for reimbursement of hospitalization costs.

4. Second opinion – before procedures, care, and related medical expenditures will be authorized, the insurance company requires a second opinion from a qualified health care practitioner.

5. Prior consent for hospitalization – the insured is required to present to the insurance company the particular course of treatment proposed by the health care practitioner before authorization for coverage will be provided.

Case Studies: Common Cost-Containment Procedures in Insurance

Case Study 1: Same Day Surgery Admission

Sarah requires surgery for a medical condition covered by her health insurance. However, her insurance company implements a cost-containment procedure that requires same-day surgery admission. This procedure helps reduce unnecessary hospitalization charges by admitting patients on the day of their surgery instead of the day before. By adhering to this policy, Sarah avoids additional hospitalization costs and contributes to overall cost containment.

Case Study 2: Pre-Admission Testing

Mark needs to undergo a non-emergency surgery that requires hospitalization. However, his insurance company follows a cost-containment procedure of requiring pre-admission testing. Before authorizing the surgery or hospitalization, the insurance company requires additional testing to determine the necessity of the procedure. By undergoing these tests, Mark ensures that his surgery and hospitalization are warranted, contributing to cost containment efforts.

Case Study 3: Second Opinion Requirement

Lisa receives a recommended course of treatment for her medical condition. However, her insurance company implements a cost-containment procedure that mandates a second opinion before authorizing coverage for the proposed procedures, care, and related medical expenditures. Lisa seeks a qualified health care practitioner’s second opinion, ensuring that the recommended treatment aligns with medical standards and contributing to effective cost containment.