Texas lawsuit offers revealing look into prior authorization disputes

Bob covers the money in health care, focusing on health insurance and hospitals. His stories delve into Medicare Advantage, opaque prescription drug benefits, and how much executives actually make. He is also the author of the Health Care Inc. newsletter. You can reach Bob on Signal at bobjherman.09.

Several hospitals in Texas owned by the giant for-profit chain HCA Healthcare are suing Independence Blue Cross, a large Blue Cross Blue Shield plan based in Philadelphia, for more than $345,000 in unpaid medical claims that involved care from roughly four years ago.

The dispute highlights the contentiousness that still exists over prior authorization and the varying standards for determining whether care is medically necessary. It also provides a snapshot into the high prices hospitals charge Blues plans.

Prior authorizations, which are requests to insurance companies to preapprove care, exist to reduce wasteful and unnecessary care. But providers, patients, and policymakers have condemned insurers, saying they are using those policies to cut costs and increase profit. Some have called for a ban of the practice. In response, health insurers have made some voluntary pledges to cut down.