Payer Intelligence, Part 3: Understanding Commercial Medical Policy

By Rayellen Kishbach, Director of Business Development for Policy Reporter

In Parts 1 & 2 of the Payer Intelligence series, we looked at Medicare National guidance by the Center for Medicare & Medicaid Services (CMS) and State-specific Medicare Local Coverage Determinations & Coding Articles published by the Medicare Administrative Contractors (MACs). This article shifts attention to commercial payers and the medical policy and related documents they publish.

While over 64 million people are Medicare beneficiaries, a much larger number of people in the US have commercial medical insurance, served by hundreds of commercial payers. Six large national/large regional payers provide insurance for the majority of commercial beneficiaries representing over 105 million covered lives:  United Healthcare, Anthem, Aetna, HCSC, Cigna and Kaiser Permanente.

As a coder, these are the documents to track from your commercial payers.

Commercial Payer Policies
A medical policy is a health plan document used to support coverage decisions for a specific service, drug, or diagnostic. Generally speaking, in the policy, the payer provides a review of the evidence that was considered to establish medical necessity (or investigational status) of a service, drug, or device. When payers organize their policies, they may focus either on a specific set of services (such as neuromodulation) or they may focus on a set of services that treat a specific disease state (such as treatment for major depressive disorder).

A pharmacy policy is a document that contains medical necessity coverage information relevant to a drug, multiple drugs, or a drug class that is either explicitly called “pharmaceutical” by the publisher or is covered under the pharmacy benefit. Note that some infusion drugs will be “on medical policy” (like oncology drugs that are billed with a J code), while most prescription drugs will be “on pharmacy policy.”

Medical and pharmacy policies can also provide insight into the payer expectations for documentation, exclusions, and coding (some but not all payers clearly translate the policy to procedure and diagnosis codes). Note that when FDA approves a new product, it may take months to years for the new product to be included in a payer’s medical or pharmacy policy.

In the next part of this series, we will explore other payer publications that help you understand payer thinking for services that are “not on policy.”

This “Payer Intelligence” series provides a set of quick tutorials on payer publications that support accurate coding and efficient revenue cycle operations.

About the Author
Rayellen Kishbach is a Director of Business Development for Policy Reporter, a TrialCard Company with over two decades of experience building and selling healthcare knowledge products. Policy Reporter provides an innovative healthcare software solution that tracks payer policies in real time wth customized alerts to subscribers. The company’s patented software-driven solutions include a suite of billing and reimbursement tools for providers and laboratories, market intelligence tools for payers, and a suite of patient access solutions for life science companies.

WE ARE HIRING. Policy Reporter is regularly recruiting and hiring for positions that can be a great fit for professional coders, auditors, and revenue cycle experts. From data quality to health document analyst to reporting and 1099 research contract positions, you might be a good fit if you have certification such as CPMA, CHDA, or CDIP and are good at synthesizing complex information and communicating clearly. Diagnostics and Laboratory prior authorization, billing and claims experience is a plus! Contact [email protected] for next steps in working with Policy Reporter.

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