How do I hate thee, insurance company? Let me count the ways

I am this close to divorcing my insurance company. What seemed like a fairly happy relationship has turned ugly. So, 8 1/2 months ago--basically as soon as we accepted this new job--I called to find out more about my maternity benefits since I was newly pregnant. I had already found the name of the CNM I am currently seeing, so I wanted to verify if she was covered, and whether she was in or out of network. Let's be honest--having insurance coverage for a midwife made me a lot more willing to consider that as an option. Of course if I felt that it was right to have a midwife, I would pay for one, insurance or not. But the fact that she was covered did make a huge difference for me.

So I verified last fall with my company that she was covered, although probably only as an out-of-network provider unless I petitioned for an in-network exemption. Since there are no other in-network home birth providers in my area, I hoped this wouldn't be too much trouble. My midwife's biller looked into this and obtained an authorization code for in-network exemption, which she re-verified at least once at a later date. The biller even did a test bill, which was approved and authorized back in November 2008.

So everything looks fine and dandy, right? I have my in-network deductible of $400-odd dollars, then I pay 20% of the remaining charges (compared to 40% for out-of-network). This works out to around $1,000 that I would pay out-of-pocket, perhaps less if they can bill for enough charges. My midwife's global fee is $3,600, although if you have insurance the numbers on the claims will be a bit higher than this.

Today I got a call from the midwife's biller, saying she just heard from my insurance company that the in-network exemption was a mistake and that they would only cover the CNM as out-of-network. Not the end of the world, but I decided to call and inquire about this change. Everyone I talked to said the same thing--the authorization code was a mistake, and that only physicians and specialists can be granted an in-network exemption.

I asked to speak to the person's supervisor to see if anything else could be done at this point. This is where it went downhill. This new person looked into my case and informed me that not only was the out-of-network thing non-negotiable, my CNM would actually not be covered at all by my policy! The specific insurance contract I belong to stipulates that a CNM must:
a) be directly supervised by a physician
b) attend births in a hospital or birth center (I think the wording was "in a health care facility")

Why didn't they tell me this 8 1/2 months ago when I called specifically to verify that she was covered? Why didn't they tell this to my biller when she submitted a claim back in November to verify that the insurance was working properly?

So now my insurance company totally refuses to cover the CNM I am seeing, even though for the past 8 1/2 months I had been assured that she was covered--after all, she is a licensed health care provider in my state. I spent a few hours on the phone talking to two more supervisors & managers and kept being told the same information: the CNM must work in a hospital or birth center, and must be under the direct supervision of a physician. Doesn't matter that they had told me, and my midwife's biller, multiple times that she was covered. Doesn't matter that they had already approved at least one claim from this midwife.

I refused to let them end the conversation. I kept asking if there was anything else I could do to petition this. They said that I could only appeal the claim after the birth. They would certainly deny the claim, and they said there was little to no chance that they would approve my appeal since my policy had those two stipulations written into it.

So after I kept asking who I could talk with to see if there was any hope of getting insurance coverage--keeping in mind that I had been assured all along that I did have coverage for this CNM--I finally got the 3rd or 4th level supervisor to tell me who wrote my policy's contract; she said it would be someone at my husband's college. So I called the college, found the right person, explained my situation: I am 8 1/2 months pregnant, had been told all along that I had coverage, and at the last minute was informed that my CNM would not be covered even though she's a legal, licensed provider in our state, because of certain technicalities written into the insurance contract. I asked her to look into changing the wording of the contract to cover any midwife or physician licensed to attend births, without the clauses mandating place of birth or physician supervision (since those are not required by our state by any means). She said, "oh, I know you--you're Eric's wife!" and seemed quite willing to look into changing the terms of the insurance contract. She said she'd look into it and get back to me tomorrow.

So I hope, hope, hope that this will work. I am glad I was obnoxiously persistent, because it was maddeningly hard to squeeze that bit of information out of the last supervisor.

Can I say it's just a tad stressful to find out, perhaps just a week or so away from giving birth (if I go into labor at 38 weeks like I did last time) that your insurance company suddenly will not cover your health care provider? And that it will not cover any CNM who works independently, despite the fact they they are fully legal and licensed? And that it mandates that I give birth in a hospital or birth center? (And of course there's no birth center in my town, so that's not an option anyway.)