What your health insurer doesnt want you to know
by Caleb Reading
[NOTE: MSN took the story down, so I’m backing it up here in it’s entirety. This is important.]
From slow payments to slick contracts and even to splitting your own pills, your insurance company may be playing games to save money.
By Vicki Lankarge, for insure.com
Since antiquity, when Hippocrates wrote “Do no harm,” countless patients have put their trust in physicians who have taken that oath. But somewhere along the line, medicine became a business — a $1.3 trillion a year business, according to the U.S. government — run by insurance companies that have taken no such oath.
Do you ever feel that when it comes to your health plan, the deck is stacked against you? That’s because there are plenty of things your health insurer doesn’t want you to know. Here are just 13 of them.
1. It is sometimes cheaper to let you die rather than to treat you for a serious condition.
Health insurers don’t deny care; they deny payment for the care, which usually amounts to the same thing. They deny payment because it saves them money. These denials sometimes cause patients’ deaths.
Sound outrageous? Consider the statement below. It’s an excerpt from the May 30, 1996, testimony given before the U.S. States House of Representatives by Dr. Linda Peeno, a former HMO medical director and medical claims reviewer for Humana and Blue Cross and Blue Shield of Kentucky. Peeno is now a medical-ethics consultant and managed-care whistleblower.
“I wish to begin by making a public confession: In the spring of 1987, as a physician, I caused the death of a man. Although this was known to many people, I have not been taken before any court of law or called to account for this in any professional or public forum. In fact, just the opposite occurred: I was ‘rewarded’ for this. It bought me an improved reputation in my job, and contributed to my advancement afterwards. Not only did I demonstrate I could indeed do what was expected of me, I exemplified the ‘good’ company doctor: I saved a half million dollars!
“Whether it was nonprofit or for-profit, whether it was a health plan or hospital, I had a common task: using my medical expertise for the financial benefit of the organization, often at great harm and potentially death, to some patients….I am the evidence that managed care is inherently unethical, in the areas of both medicine and business. Had my experiences been the result of merely local aberrations, I would not have had anything to do for the past six years. On the contrary, I discovered that my experiences are standard practice and quite ordinary for the managed care business.”
2. Health insurers routinely hide benefit exclusions.
Health insurers make their covered benefits as narrow as the market allows and routinely redesign benefits to control their highest costs, insiders say. They also use disingenuous policy language to “hide” exclusions in not-very-plain sight.
For example, some dental plans cover accidental injury to your teeth. So if you bite down on a hard candy and your tooth partially crumbles, you believe the insurer will pay to fix it. But you’re in for a rude awakening when you submit your claim and it’s denied weeks later. That’s when you discover the policy’s “definition of terms” section states in fine print: “Injury to the teeth while eating is not considered an accidental injury.”
3. Health insurers don’t really want you to understand how your health plan works.
Health insurers use marketing that enhances the attractive elements of a plan, but they don’t disclose potential plan problems. Most group health insurance members have no idea of their exact coverage limits or rules of their plans until after the open enrollment period when they receive their benefit booklets.
Even then, the benefit booklets don’t fully reflect the contract between the members’ employer and the health insurer. The seeds of some of the most common claims problems are sown when employers purchase health insurance for their employees, says Maria K. Todd, president and CEO of HealthPro Consulting Consortium, a private managed-care consulting firm in Aurora, Colo. Todd says most employers use health insurance brokers to whom they give a list of desired benefits. The broker, in turn, identifies insurers that offer affordable plans with those benefits. Once the employer selects an insurer, the broker hands the employer a contract to review and sign.
“But the average human resources director really isn’t aware he or she is being given a boilerplate contract that favors the health plan,” Todd says. They may not realize that every element of the plan is potentially negotiable, and that they could hammer out improvements for the plan members. (For more information, see “Claim denials: Who’s responsible when your health plan doesn’t play by the rules?” at left.)
4. Health insurers employ “phantom networks.”
Did you ever try to switch primary care physicians within your plan’s provider network only to find out with each phone call that many of the doctors named on the provider list are not accepting new patients? Then you have fallen prey to a health insurer that uses a “phantom network,” a directory filled with doctors who are no longer with the plan or who are not taking new patients. Health insurers leave the names on the list to make it look they have more doctors available to health plan members.
The New York Attorney General’s Office is currently investigating health plans that list physicians as participants even when the doctors are not taking any new patients.
5. Health insurers can make you “split” your pills.
You may be surprised one day when you fill your prescription and discover a pill splitter inside the bag along with a bottle of larger-dose pills that you must cut in half. Mandatory pill splitting has been condemned by the American Medical Association (AMA), the American Society of Consultant Pharmacists (ASCP), and the American Pharmaceutical Association (APhA) due to the health risks involved. These include the chance that patients will divide the pills unevenly and wind up taking incorrect doses or, because some suffer from cognitive impairments, may forget which pills they must split.
Six California Kaiser Permanente patients and one doctor formerly under contract with the HMO are currently suing Kaiser for allegedly forcing its members to split pills. The lawsuit alleges the practice allows Kaiser to profit because smaller-dose versions of some prescription pills cost Kaiser almost as much as larger-dose versions of the same pill.
6. Health insurers will go after your auto insurance settlement.
You’re probably not aware that it’s perfectly legal in most instances for health insurers to place a lien on any third-party settlement money you get from an auto insurer after an accident. This practice is known as “subrogation,” which simply means “substituting one for another.”
Health insurers are allowed to recoup the cost of your medical care from the settlement you receive from the person who injured you. For example, if your auto accident medical expenses total $5,000 and you win a $10,000 settlement, your health insurer can take half — but only if its “rights of recovery” are spelled out in your plan agreement or summary of benefits. There have been plenty of court cases over this practice, and the issues aren’t clear cut. You do have the option of hiring an attorney to fight your health insurer’s subrogation demands. (For more information, see “Protecting your auto insurance settlement from your health care provider” by clicking at left.)
7. Health insurers purposefully delay paying claims to maximize their profits.
Although 46 states have prompt-pay laws, those laws apply to “clean claims,” or claims submitted to them without any missing or wrong information. The problem is, says Peeno, health insurers create a maze of payment-submission rules that guarantee there will be many “technical” denials for missing information or failure to follow the convoluted claims-submission procedures.
Why do insurers drag their feet on paying claims? Your premium money is invested in interest-bearing accounts. An insurer delays remittance until the interest in these accounts is sufficient to pay the accumulated claims without cutting into the insurer’s profit margin. Medical ethicists such as Peeno say “growing” the money isn’t a questionable business practice, but the deliberate denial and/or slow payment of claims is. The problem is widespread. Last year, Texas Insurance Commissioner Jose Montemayor slapped 17 health insurers with fines totaling $9.2 million for violating the state’s prompt-pay law and lawsuits have been filed across the country by doctors charging slow payment of claims by health insurers.
8. Your doctor isn’t calling the shots.
Do you know whose guidelines your health insurer follows when approving the length of your hospital stay? Your doctor’s, right? Wrong. Your insurer is most likely using guidelines developed by an actuarial consulting firm such as Milliman & Robertson. The problem is: Most doctors complain that Milliman & Robertson’s recommended hospital stays are dangerously brief.
For example, Milliman & Robertson data state that the “target” hospital stay for meningitis (an infection of the covering of the brain and the spinal cord) is three days. Many physicians say this is outrageously short and that the average length of hospital stay for meningitis is a week or more. The use of Milliman & Robertson data to limit patients’ care (and increase revenue) is just one of the allegations brought forth in a lawsuit filed by the state medical associations of California, Georgia and Texas in U.S. District Court in Miami that accuses nine health plans (Aetna and its Prudential unit, CIGNA, Coventry Health Care, Foundation Health Systems, Humana, PacifiCare Health Systems, United Health Group and WellPoint Health Networks) of violating federal racketeering laws.
9. You don’t have to pay out-of-network charges when they’re not your fault.
There are times when you’ve played by all the HMO rules and you still wind up with a bill for out-of-network charges. But is it your responsibility to pay the doctor’s fee for an out-of-network radiologist who read your hospital X-ray because no in-network radiologist was available? No, you most certainly do not. A patient can do nothing more than to select an in-network primary care physician and in-network hospital, according to Dr. Harvey Frey, director of the Health Administration Responsibility Project in California. Other than that, you have no control of who else gets involved with your care within the hospital setting.
If this happens to you, raise a ruckus. Appeal the insurer’s payment decision. File an official complaint with your state insurance department. Ask the department to investigate the insurer’s tactics.
10. Health insurers make a fine distinction between “emergency” and “urgent” care.
Your health insurance policy most likely contains a clause that states you will not be billed for emergency room services if those services are eligible under “The Prudent Layperson Standard” for emergency room visits. These visits have been defined as medical, maternity, or psychiatric emergencies that would lead a “prudent layperson” (an average person) to believe that a serious medical condition exists or the absence of immediate medical attention would result in a threat to the person’s life, limb or sight. This includes situations where an individual is in severe pain.
But in some health plans, conditions such as a broken hip are not classified as conditions that require emergency care. They are classified as “urgent” conditions and you must call your primary care physician to get authorization to visit the emergency room.
“The devil is in the details,” says Robert Finney, a former manager for health-care cost containment at the Hewlett-Packard and author of “HMO Hardball”, a consumer self-help book. “HMOs hide the details in incomprehensible self-serving contracts written by HMO lawyers to take advantage of sick and disabled patients.” (For more, see “Emergency care: Know your rights” at left.)
11. Health insurers don’t want you to know how they come up with their prices.
Would you shop at a grocery store where none of the merchandise had price labels? Of course not, but many health insurers use a pricing practice known as “UCR,” which stands for “usual, customary, and reasonable,” to determine how much of a claim they will pay. As the name says, these charges are supposedly the “going rate” that health care providers in your area charge.
But you can’t get their UCR prices to dispute your claim or compare plans. They’re secret. Even court orders have done little to force insurers to supply the formulas that they say they use to devise UCR rates, claiming it’s “proprietary” business information.
12. Health insurers don’t want you to take your grievance outside the health plan.
Every health plan has an internal grievance process, but many are reluctant to let you know that many states have also implemented laws governing external appeals that in certain cases give you the right to a review by an independent board of qualified experts. If the appeal is determined in your favor, your insurance company cannot deny your claim. (For more, see “How to avoid a health insurance claim denial — and what to do when you can’t” at left.)
Additionally, health insurers are not keen about letting you know that if you file a grievance with your state insurance department, insurance regulators are bound by law to investigate all consumer complaints that fall under their jurisdiction. Insurers also do not want you to file a complaint with the U.S. Department of Labor, the agency that oversees health plans that are governed by ERISA, the Employee Retirement Income Security Act. ERISA governs self-insured health plans, meaning the employer assumes the risk for plan members. (See “How to make claims under a self-insured health plan” at left.)
13. Health insurers don’t want you to know that some of their practices violate laws.
Although 46 states have prompt-pay laws, insurers still violate them flagrantly enough to set off lawsuits and insurance department investigations that often lead to fines. The majority of these are settled quietly. And then the cycle begins again.
What health insurers really fear are the massive class-action lawsuits that ask the courts to force the insurers to repay all the money they have gained from these practices. One of these lawsuits is currently being played out in a Miami courtroom where 600,000 doctors are taking a stand against nine of the nation’s top health insurers.
On May 9, 2001, Judge Federico Moreno ordered full discovery in the lawsuit, a ruling that requires each party to request information and documents from the other side in an attempt to “discover” facts relevant to the case.
At the time of Moreno’s discovery ruling, Rocky Wilcox, the general counsel for the Texas Medical Association, promised the order “will rip back the curtain and expose to the American public all the dirty tricks these HMOs play every day.”