What To Do
When They Won't Pay
This is the kind of clout it takes sometimes to make a health plan back down: The
president of the San Francisco board of supervisors blocking the doorway of a hospital
room to keep out paramedics who were trying to take the patient to the health plan's own
It was the official's own mother in the bed; she had
nearly died of abrupt heart failure two days earlier and had just emerged from a coma. Even
though the attending physician said she was not stable enough to be transferred, the
health plan's rules said that patients who no longer required life support systems were to
"I literally stood in the door and said,
'Over my dead body. You will not take my mother out of this hospital,' " says
Kevin Shelley, the official, who is now a state assemblyman. "The paramedics gave up
and went away." His ruckus eventually caused the HMO to change its protocol.
"But here I was, president of the Board of Supervisors, and I had to go through every
blustery tactic I could, and still had difficulty. What does the ordinary person do?"
Unfortunately, Shelley isn't on call in every
hospital to help the ordinary person with their battles.
More unfortunately, there aren't a lot of
other knights in shining armor either. With a couple of happy exceptions, most patients
simply don't have somewhere they can routinely turn for help. To get help when
battling a health care bureaucracy takes some effort, and some luck.
Here's a guide to your options.
But first, the exceptions that provide an example of
what the rest of us are missing:
If you're covered by Medicare ... Every
state has an organization to intervene on your behalf. The only trick is finding it.
The generic name for the state organizations is the
insurance counseling and assistance program. In many states it's called HICAP
Health Insurance Counseling and Assistance Program. In others, it's SHIP Senior
Health Insurance Program.
The national Medicare hotline operated by the U.S.
Health Care Financing Administration (HCFA, pronounced "hickfa") can refer you
to your local insurance counseling and assistance program. The hotline number is (800)
638-6833. Every member's Medicare brochure also has information on the program in his or
Disputes over Medicare benefits go through an
internal appeals process, explains L. Sue Andersen, director of the Health Insurance
Counseling Project in Washington, D.C. Then unresolved cases are automatically turned over
to a private company few consumers have ever heard of: the Center for Health Dispute
Resolution in Pittsford, N.Y. It contracts with the government to work out unresolved
cases. You may never be aware of the company's involvement whether or not the dispute is
resolved satisfactorily, Andersen says.
If you're dissatisfied with that company's decision,
you may pursue cases further, through an administrative hearing and to court. Again, the
local insurance counseling and assistance program can help you through the process.
If you happen to live near Sacramento, Calif. ... You
can call the Health Rights Hotline, a privately funded project that intervenes in
health-care disputes for consumers in Sacramento, El Dorado, Placer and Yolo counties.
"As far as we know there aren't yet any other programs like ours, anywhere,"
says Shelley Rouillard, program manager. The agency has helped patients appeal unexpected
bills costing thousands of dollars and helped resolve miscommunication between patients
For instance, a consumer covered by an employer
self-insured HMO went to the emergency room for pneumonia. The treatment fell within a
six-month initial coverage period during which pre-existing conditions were excluded. The
HMO denied more than $9,000 in hospital bills, ruling that the pneumonia was a
complication of pre-existing asthma. The hotline helped the patient draft an appeal and
get a letter from her doctor explaining that the pneumonia was caused by a viral infection
unrelated to her asthma. The plan granted the appeal and paid the $9,000.
The group is at (916) 551-2100; http://www.hrh.org
For the rest of us, here are the options:
The consumer's first step after initiating the health
plan's internal appeals process is to turn to government regulators.
Myriad state regulatory agencies govern health plans,
with varying effectiveness. State departments of insurance oversee fee-for-service plans.
In most states, health departments regulate HMOs. Fifteen states also provide for
independent external review of health plans' internal decisions regulators in those
states can provide information on the process.
Regulatory agencies require that the consumer appeal
to the health plan before asking them for help but there's no rule about waiting
for a response. The minute the appeal has been sent, the determined consumer may contact
the appropriate regulatory body for assistance.
Employers' self-insured plans are regulated not by
state agencies but by the U.S. Department of Labor. "Unfortunately," Khanna says
in his book "Managed Care Made Easy: Survival in the HMO Era," "in many
instances, the DOL provides very little assistance."
Direct advocacy assistance is in short supply.
The names of such organizations as Health Access, Consumers for Quality Care, People's
Medical Society, American Medical Consumers and Patient Action might imply that some would
provide direct intervention for consumers. But they're mostly lobbying groups working to
strengthen the consumer's rights through legislation. None takes on his individual case
and advocates for him with his health plan, though some may provide advice. (American
Health Consumers is a for-profit organization that assists its dues-paying members with
Asked if she knows of organizations that advocate
directly for consumers, the California Department of Corporations' Stewart hazards,
"Consumers Union? The American Civil Liberties Union?" But those groups, though
they may advise, don't intervene either.
You can turn to your employer if that's the source of
the health coverage. Employers, especially larger ones, often have clout as the purchasers
and administrators of the plan. But there's a down side: loss of privacy. Many sick people
aren't comfortable letting the boss and the entire human resources department know the
details of their medical problems. AIDS patients can be especially wary, as can employees
needing mental-health or substance-abuse treatment.
Another possibility just a possibility
is the state attorney general's office. "Sometimes you can get a plan's attention by
sending a letter and cc'ing the state attorney general's office," Khanna suggests.
"But it's hard to know in all 50 states how active the attorney general's office is
in those cases."
As for turning to a state legislator: "Don't
bother," says Washington, D.C., attorney Jacqueline Fox. "Stay focused on making
your own case."
But Pamela Gaume of the California Department of
Insurance's Consumer Services and Market Conduct Division indicates that it's worth a try.
"That probably would get a complaint extra attention. Legislators do get
expedited." The anecdotal view suggests that it couldn't hurt to give a state
assembly representative a try, but a consumer shouldn't count on that to resolve the
issue. Elected representatives vary in their commitment to constituent service, for one
Consumers can sometimes get help from organizations
that cover their particular situation: The Center for Independent Living for disabled
people; groups for the developmentally disabled or head-injury victims; the Newport News,
Va.-based Patient Advocate Foundation for cancer victims.
The recourse that comes to most Americans' minds, of
course, is a lawyer. Huge malpractice awards are in the news all the time, and what could
be more effective than the implied threat of a multimillion-dollar judgment?
But there's a big obstacle to that one that
most consumers have never heard of. It's a 1974 federal law called the Employee Retirement
Income Security Act, or ERISA, which poses a huge obstacle to winning punitive or
compensatory damages from an employer-purchased managed-care plan the kind that
covers 120 million Americans.
A 1974 federal law written when HMOs were
almost unheard-of in most of the country has the apparently accidental effect of
making it almost impossible to win damages from managed care plans.
ERISA, the Employee Retirement Income Security Act,
applies to managed care plans purchased through employers the kind of coverage held
by 120 million Americans. In a setup intended to encourage employers to self-insure so
more would offer employee health coverage, ERISA provided them with protection against
punitive or compensatory damages. Courts have repeatedly and often unwillingly
interpreted that protection as extending to the employer's agent, meaning the
managed care plan.
So in many managed care cases, damages are limited
to the cost of the treatment. If a patient dies because a $10,000 procedure was denied,
the standard wisdom is that under ERISA, the maximum the family can recover is $10,000
no pain and suffering, no wrongful-death compensatory damages. That tends to
blunt lawyers' eagerness to sue managed care organizations.
Not that it's impossible to win judgments in court.
It takes a corporate lawyer or HMO lawyer well-versed in ERISA law, Fox says. "You
can get around ERISA, but you've got to be very crafty."
There are a few successful cases to point to: One
high-profile lawyer, Mark O. Hiepler of Oxnard, Calif., has made this a well-publicized
specialty. Hiepler blazed into the public eye when he won a 1994 verdict of $89 million
against HealthNet over its denial of a bone-marrow transplant to his own sister, who later
died of breast cancer. (She had received the transplant after her family raised $210,000
to pay for it.)
Hiepler later represented David Ching against the
doctors who delayed his wife's referral to a specialist when she showed symptoms of colon
cancer, which killed her at age 35. A jury awarded the Ching family $3.5 million, later
reduced to $700,000 under a state law limiting compensatory damages.
Consumers looking for legal assistance can consult
with an attorney, finding referrals through the state Bar Association if they can't get a
In extreme cases, there's the media. Local newspapers
or broadcast news may or may not be interested in an individual situation. But they're
becoming sensitive to the fear and outrage with which much of the public regards the
managed care industry. "The polling data shows that people are just thermonuclear
on this subject," remarks David Grant of San Francisco's Patient Action.
The worst a city desk or bureau chief can do with a
call or letter about a consumer's situation is ignore it, and there's always the chance of
the Page 1A story that embarrasses the health plan into reversing its denial.
Finally, here are two books that give information
about dealing with managed care:
|Health Against Wealth: HMOs and the Breakdown
of Medical Trust, by George Anders (Houghton Mifflin Co., $15).
|Managed Care Made Easy: Survival in the HMO
Era, by Vikram Khanna (People's Medical Society, $14.95).|