JournalInquirer.com

The health-insurance industry’s state of denials
CT@Work
Published: Thursday, August 6, 2009 12:08 PM EDT
Leo Canty
How do you prepare for this kind of fight for your life — a knockdown, drag-out contest that’s all too common between subscribers and their health-insurance company? The scrapping comes into play when care or payment is denied or an insurance policy cancelled, leaving the sick and dying in an awful predicament.

Those who still have their medical plans think they are reasonably set if they need to see the doctor or get treatment. After all, you and your boss pay big bucks on health-care premiums, so you expect to get the care when you need it … right? Think again, because your opponent in the other corner, the health-care industry, is struggling to keep up with losses as costs rise and consume profits. But the driving formula — premiums paid minus health-care costs equals profit — affords few options.

If companies charge more for premiums, business is lost. Dropping the profits chases investors away. CEO compensation reductions may save a few million but more is needed. And there are efficiencies and cost cutting. In that option an increasingly common practice is claims denial. By some estimates 10 to 15 percent of claims are being denied for a wide range of issues — wrong information, paperwork snafus, treatments that are deemed ineffective, and many others.But a fellow named Wendell Potter has a different angle. “Insurers have every incentive to deny coverage,” Potter says. “Every dollar they don’t pay out to a claim is a dollar they can add to their profits, and Wall Street investors demand they pay out less every year.”

Potter is a Connecticut resident and former CIGNA communications executive who is speaking out about what he’s seen and previously defended in health-care industry practices. In his revealing PBS “Bill Moyers Journal” interview last month Potter also said, “You don’t think about individual people. You think about the numbers, and whether or not you’re going to meet Wall Street’s expectations.”

So let the health vs. wealth battles begin.

The industry is active and hard at work in this game, but most people aren’t prepared unless you’re among those in training. They are the ones quitting the cigarettes, booze, fatty foods, and sleeping eight hours after a daily two-mile jog. To those who think that regimen sounds more painful than being beaten up by Dr. No and the uh-uh team at the HMO claims denial department, call this number: 1-866-466-4446. It’s the Office of the Health Care Advocate.

Health insurance is complicated, and even more so when one loses coverage. Those finding themselves in this state of denial have an advocate that can help win in memo-to-memo health-care combat. Gov. Jodi Rell and the captains of health-care business and industry know the value of this phone call. They supported a plan to cut the budget for the phone, and all the staff — in the name of shrinking the size of government, of course.

Kevin Lembo and the Office of the Health Care Advocate announced this week big claims about the effectiveness of their efforts. Last year, their $1 million in advocacy tax dollars returned $5.2 million in savings as denied claims were reversed, getting coverage for the unprepared, sick, and dying customers of HMOs and insurance companies.

“We won 85 percent of the cases,” Lembo says. Since the win rate is so high, and many people are not prepared to get in the fight, it seems like there just might be a pretty large pile of profit to lose if this fight for your life stuff catches on. But that wouldn’t be a reason to shut down the program … would it? They’ve only saved $2.1 million as of July 1 for this year.

So far Lembo is on the job and his phone is still working. But who knows what the budget slicing and dicing may finally produce. If Rell and the Big Insurance profit protectors really support cost-cutting measures, then they would praise the million-dollar investment that returned $5 million in savings. If the plan is to make sure the health-care industry remains fully able to respond to the investors’ call, they will send Lembo packing.

There seems to be a common thread running through Rell’s treatment for Lembo’s office, and the recently vetoed Sustinet and pooling bills. As much as Rell and her investor friends love a fight, they hate a level playing field. You can’t deny that.

Leo Canty is executive secretary of the Connecticut AFL-CIO and chairman of the board of the Connecticut Health Foundation. He lives in Windsor.