The Insurance Intelligencer
6/28/10
The New Healthcare Law: Protection, or Pretense?
The media hoopla over the health care bill is over; the bill has been passed. As of 3/23/10, the Patient Protection and Affordable Care Act of 2010 (PPACA) is the law of the land. May we assume that the inequities, cruelties, and brutal realities of private health insurance are now tempered, improved, resolved?
Legions of healthcare lawyers are currently poring over the PPACA. I am just one cancer survivor -- one who has won fifty-nine major insurance appeals for others by understanding the real reasons for insurance denials, and what it is that motivates insurers to reverse those denials.
I would like to share a few provisions of the law that stood out for me, given my experience with how insurance company policies, provisions, and decisions play out in the real lives of patients, and the dedicated medical providers who treat us.
Grandfathering
Grandfathering = the mother of all loopholes, right off the top. Which insurance plans will be exempted from the new law? All insurance plans in existence on the date the law was passed. All of them.
There are a few provisions of the new law that do apply to existing group plans: health insurance for employees working thirty hours or more, dependent coverage for children up to age twenty-six, various restrictions on denials for pre-existing conditions.
However, the bottom line is that all existing insurance plans are exempt from most of the provisions of the new law. They can continue to operate as they always have, they can enroll new members. Business as usual.
Disclosure
There are all manner of complicated disclosure requirements for insurers offering new plans. Just one problem with this -- insurers have had fifty years to perfect the art of "concealing, while appearing to disclose."
Good luck getting insurance companies to disclose.
Example #1: Let's say that insurers are required to disclose their number of treatment denials. My lifesaving surgery was denied in 2005; I have the denial letter in my files. However, as far as my insurer is concerned, there was no denial. In their records, the entire episode is classified as a "goodwill payment."
Example #2: Under the new law, insurers offering new policies will need to disclose their "claims payment policies and practices."
I could write a dissertation on how health insurers reduce reimbursement, after the medical treatment has been performed. Bundling codes, changing codes, deleting codes -- the variations are endless. Some insurers even go retroactive -- digging into past cases, looking for ways to take away even more payment.
However, the biggest, most secret, most baffling practice to patients is the infamous "reasonable and customary." All of the disclosure requirements in the world will not unmask nor demystify this massive illusion of coverage.
Let's say that the patient has a PPO. Their benefits booklet states that the insurer will pay "80% for out-of-network treatment." The truth, but not the whole truth. Every patient who has ever contacted me -- regardless of their level of education or sophistication -- believes that the insurer will be 80% of billed charges. Patients embark on astronomically expensive surgeries and hospitalizations, believing that 80% of their bills will be paid.
Far from it. The insurer will pay 80% of whatever the insurer deems to be "reasonable and customary." If you call your insurer, and ask, "What does reasonable and customary mean?" -- they will reply, "We do extensive research and surveys, all over the country, to see what medical providers are charging."
There is no research, and there are no surveys. The numbers upon which insurers base their reimbursement are secret, mysterious, and constantly changing.
Guess where insurers get these figures? Ingenix. Guess who owns Ingenix? United Healthcare.
In 2008, New York attorney general Andrew Cuomo took sixteen major insurers to task for this misleading-to-fraudulent practice. Ingenix was fined $300 million, plus $50 million to set up a non-profit database to generate the numbers on which reimbursement will be based. How fair and impartial this new set-up will be remains to be seen, as the first of the sixteen insurers just settled with Cuomo this January.
When we require insurers to disclose their reimbursement practices, they will simply say, "Our reimbursement is based on reasonable and customary charges."
Very few consumers will ever ask, "What do you mean by that?"
External review
64% of the employees in this country are insured by self-funded plans. People, this means that your employer -- who knows nothing about the practice of medicine -- has absolute power over your life and death.
The only check on this divine right is the federal district courts. Good luck with that, when surgery is scheduled for next week.
The new healthcare law requires that self-funded plans submit their denials to "external review." What is external review, and is it up to this herculean task?
Independent/external review processes came into being in the 1980s, because many people got fed up with insurers and employers having sole decision-making power over medical treatments. People thought, "It's independent, it's got to be better, right?"
In early 2009, a woman called me from Colorado. She had exhausted all of her internal appeals with the insurer; she was on her way to independent review. I said, "Hold your horses. Who are these people?" The case under review involved a massively complex abdominal surgery for cancer, with heated intraperitoneal chemotherapy.
It took me twenty minutes to discover that the "independent review organization" was a chiropractor with a post office box in Texas. It was not an organization, and it was not qualified to perform a review.
This external/independent review process is anonymous, unregulated, unsupervised, and accountable to nobody. They could uphold every denial that came their way, and nobody would ever know.
Is this not a fragile branch upon which to balance the lives of 64% of the employees in the United States?
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Just a few thoughts about the new healthcare law. I will constantly be looking for ways in which I can use it to help you, when your treatment is denied.
Happy and peaceful Insurance Warrior-ing,
Laurie Todd
health insurance help