Insurance guidelines are not clinical guidelines—and it’s time to challenge that legally

The guidelines insurers use to deny claims are fundamentally different from those developed by clinical specialty societies. This discrepancy has serious consequences for both patients and providers—and it may be time to challenge it in court.

In “DRG Downgrades: The Clash of Medical Standards and Insurance Guidelines,” Dr. Poonacha and Lea Chamoun highlight how insurers use vague, self-serving criteria that diverge from evidence-based clinical standards.

Consider these excerpts:

• “Clinical practice guidelines are developed through a systematic process to ensure they are evidence-based… Typically, a panel of experts convenes to create these guidelines… Each author discloses any conflicts of interest… the development process is explicitly outlined… including the level of evidence for each recommendation.”

• “In contrast, the process of health insurance guideline development is often less transparent. It is frequently unclear how these guidelines are formulated, who is involved, and whether conflicts of interest exist… The divergence between insurance-driven criteria and clinical standards, such as those from CMS, leads to frequent denials of coverage… Insurance guidelines are only for specific diagnoses, not the full spectrum of health issues… This discrepancy emphasizes the need to bridge the gap between insurance guidelines and clinical standards.”

This issue extends beyond DRG downgrades and affects the entire fee-for-service system. Insurers routinely apply their own guidelines to deny payment and coverage. Giving insurers this unchecked power presents a blatant conflict of interest.

Why should an insurer—far removed from the clinical encounter—have the final say over a treating provider’s decisions?

While the authors call for “harmonizing” guidelines, a better solution is to establish independent clinical panels to review denials. The burden of proof should be on the insurer—not the provider. Clinicians, with their training and patient knowledge, should be presumed correct. Insurers should have to justify denial of care before a neutral panel.This would restore fairness and likely reduce inappropriate denials. This is not just a policy concern—it’s a legal and ethical one. Skilled attorneys should challenge the insurer’s unchecked authority. The time for reform is now.

We need to implement solutions now to avert a healthcare crisis

Dr. Pearl’s recent post predicting a “massive healthcare crisis” is right on point. He offers compelling evidence of the crisis’s likelihood and wisely acknowledges that no one knows how our society will ultimately respond. He outlines three plausible scenarios:

• Private equity–driven cost cutting

• Generative AI transformation

• Crisis-induced disruption

These are all credible possibilities. I would add two important considerations:

• The longer we delay implementing meaningful solutions, the more drastic and painful those solutions will become. We need urgent, realistic action. Slashing Medicaid coverage does not address the root problem. Instead, we must reform how we pay providers.

• Our current coding-based payment model undermines the value of cognitive services—primary care, mental health, palliative care, and gerontology. This system not only weakens these essential services but also wastes money. We should be allocating 15–20% of healthcare dollars to these core areas, not less than 5%.

Viable solutions exist - we just need the courage to implement them. For more information on these ideas, visit www.the journeys-end.org.

The Root Cause of America’s Healthcare Crisis

A response to Anna Eisenberg’s “Deep Dive” Eisenberg’s six-part Deep Dive into the U.S. healthcare system is a well-researched and timely summary of the urgent challenges we face. Many of her points are well-known but bear repeating:

• The U.S. spends nearly twice as much on healthcare as other advanced nations, yet our outcomes are worse. Meanwhile, 10–15% of Americans remain uninsured. Experts have long warned that the Fee-For-Service (FFS) payment model drives up costs and fragments care. As the article notes, “FFS is the primary driver of both high costs and fragmented care.”

• The leading alternative, Value-Based Care (VBC), has seen limited uptake and hasn’t fundamentally changed the system.

• Administrative burden is crippling healthcare. It costs over $1 trillion per year—roughly 25% of total U.S. healthcare spending—and is a key source of provider burnout. The main culprit is our convoluted medical coding system.

• Chronic illness, driven largely by lifestyle choices (e.g., a 42% obesity rate—double that of other advanced nations), continues to rise, particularly among the elderly.

• Medicare faces insolvency by 2033, compounded by the aging population—the so-called “Silver Tsunami.”

• U.S. policy has prioritized specialization and innovation over essential care. As Eisenberg writes, “The U.S. excels in high-tech services… but fundamental services like Primary Care… are underfunded and understaffed.”

• Medicare Advantage, the private-sector alternative to Medicare, is under federal investigation for care denials and costs 22% more per enrollee than Traditional Medicare—again due to manipulation of the coding system used to set premium payments.

Eisenberg also touches on possible reforms:

• “The future of America’s healthcare will be decided on a political battlefield… Powerful lobbying forces defend a profitable status quo.”

• “The financial trajectory is unsustainable.”

There is growing consensus around a new social contract for healthcare. Encouragingly, public support for serious reform is rising. But one central issue receives too little attention: coding.

Look closely at the reasons for our primary care shortage, fragmented system, rising costs, physician burnout, Medicare Advantage overpayments, and insurers’ ability to deny care—all roads lead to coding. This system was designed to measure and pay for care, but it has instead become an engine for inefficiency, fraud, and burnout. It rewards volume over value and creates a bureaucratic nightmare for providers and patients alike.

We must move toward simpler, outcomes-focused payment models—ones that reward actually caring for patients, not maximizing code entries. Likewise, we need new methods for adjusting insurance premiums that don’t depend on coded data games.

Viable alternatives exist. To learn more about healthcare reform that prioritizes people over paperwork, visit www.thejourneys-end.org.