As the coronavirus spreads throughout the country, hospitals and other health care providers are finding themselves inundated with patients. Those providers who are in-network with payors have and will likely continue to experience difficulty in complying with certain provisions of their contracts. For instance, as payors are also experiencing an unexpected influx of telephone traffic, the wait time for various approvals, including, but not limited to, pre-authorizations are being delayed.
Providers are often contractually obligated to obtain pre-authorizations for certain procedures and services prior to rendering the care. Due to the increased telephone traffic and increased wait times on the payor end, these providers are now faced with a dilemma. A process that as of two weeks ago only took a matter of ten to fifteen minutes now can take up to an hour or more. This creates a serious dilemma for those providers who need to render care to their patients and comply with their contractual obligations to payors.
The Senate has spoken to this issue via the Families First Act which prohibits cost sharing and imposing prior authorizations for COVID-19 related testing under Medicare, CHIP, and individual and small/large self-funded group plans. See Division F-Health Provisions, § 6001, Coverage of Testing for COVID-19. While some payors have recognized and acknowledged the difficulties posed by COVID-19 and have made exceptions to the standard requirements, those exceptions have been limited. For example, the Blue Cross Blue Shield Association has indicated that its network of 36 BCBS companies will waive prior authorizations for diagnostic tests and covered services that are medically necessary for members diagnosed with COVID-19. Similarly, Wellmark and Anthem, Inc., have waived prior authorizations for covered services related to COVID-19. While these limited pre-authorization waivers are a start, they do not resolve the dilemma faced by those providers treating patients who are not suffering from COVID-19.
With the significant delays in obtaining pre-authorization approvals, providers are increasingly faced with whether to delay care in order to comply with their contractual obligations. Providers should review their contracts with each of the payors with which they are in-network. These contracts may contain force majeure clauses which excuse non-performance where it is no longer possible to comply with the agreement.
However, the absence of a force majeure clause does not necessarily mean that the provider is left without any options. A party may argue that frustration of purpose or impossibility of performance justified its non-performance with the requirement to obtain pre-authorizations. The availability and the application of these doctrines will vary from state to state.
In any event, if a provider elects to invoke the force majeure clause contained in the contract with payors or to argue that the provider can no longer perform due to the current circumstances of COVID-19, the provider does so at a risk. Payors could deny the claims submitted for services rendered or performed without obtaining a pre-authorization. Providers should be on the lookout for such denials and be prepared to dispute them and engage in the appeal process immediately. In an effort to avoid future denials, providers should communicate with representatives from each of the payors to indicate that, in light of the current circumstances, providers are unable to honor the pre-authorization requirement and in order to render necessary care and for patient safety reasons, the provider will render care without pre-authorizations for the remainder of this pandemic. As this is an evolving situation, providers should continue to be on the lookout for guidance from the government and/or bulletins which speak to this issue.