The Games Insurers and Providers Play

In the HMO era, patients are giving up choice but still are being saddled with the bills

By Lee S. Goldsmith, M.D., LL.B.

The author, an attorney and medical doctor, practices law as a partner in Goldsmith Ctorides & Rodriguez in Englewood Cliffs.

Over the past three years our office has seen a tremendous increase in calls from potential clients. The change has been notable in the reasons for the referrals.

If one were to review the intake files from the early 1990s, the basis of the complaint would be seen usually to refer to a medical event. Our task would then be relatively simple. We would evaluate the care and make a determination as to whether or not there was a problem associated with medical negligence.

But as the decade advanced, the calls became more likely to be related to problems associated with health insurance coverage, namely, denials of care by health maintenance organizations and what can only be called "games" being played between the provider and insurance carrier. The individual damaged by these games would usually be the patient. While the nugget of a malpractice claim might be present, that was usually not the presenting problem.

Depending on one's point of view, the health insurance complaints did not represent large sums of money. However, the aggravation and harassment was great, and no physician or insurance representative was interested in the problem. The patient could either attempt to manage the problem or look for assistance. There is no state agency nor any legislation that will effectively protect the patient. Lawyers, generally realizing that the sums involved were small, were not interested. The patient was effectively alone fighting a provider's collection agency, an insurance behemoth or both.

The problems take many forms and a few examples might be pertinent. Many current insurance policies indicate that the presence of an assistant during surgery will not be compensated unless necessity is shown. The patient does not make the decision as to whether or not an assistant should be present nor does the patient select the assistant.

In Tod Coleta's case, he underwent a major cancer operation and his surgeon called in an assistant. After the surgery was completed the company first denied payment to the assistant indicating that none was necessary. After some time, the company agreed to pay. However, the assistant was not a member of the plan so he would not be covered within the plan with a minimal co-pay; instead, he was subject to the 80 percent coverage for outside physicians.

Not only was there no negotiation of Mr. Coleta's bill, but there was an additional problem. This insurance carrier was having a dispute with the physician. The carrier felt that it had overpaid prior bills to this physician and knowing that they probably would not receive a refund, pointedly underpaid the current claim to recapture the funds.

The physician then requested the difference from the patient and when it was not immediately forthcoming, sent the matter to collection. Mr. Coleta then contacted us.

Decision-Maker Not Responsible

What's wrong with this picture? The HMO-referred surgeon is making decisions on staffing that go beyond the patient's input, yet the patient is being hit with the additional bills.

The patient may have some input when the HMO gatekeeper refers him or her to a surgeon -- selecting a surgeon and hospital covered by the plan. But the surgeon is therefore making the decision as to whether or not an assistant is necessary and who that assistant is going to be. Therefore, if there is no need for an assistant or if that assistant will not be compensated for ancillary reasons, it should not be the patient's problem.

Similarly, when admitted to a hospital covered by the plan, the patient has no choice as to the anesthesiologist. If the plan covers the hospital but not the anesthesiology, the patient may be hit with an extra and unexpected bill.

A variation on this theme occurred to Theresa Becker. Mrs. Becker became a new mother, but her infant had problems at birth. Her doctor belonged to her HMO and his bill was to be paid 100 percent. The hospital in which the birth took place had a contract with the HMO so that bill was going to be 100 percent.

However, the neonatologist was associated with a New York hospital with which the delivery hospital had an affiliation agreement. The neonatologist suggested a transfer to the New York Hospital and this new mother agreed, anything to help her baby. The neonatologist did not transfer this child to either of two local hospitals with the necessary facilities and where the HMO had a contract for 100 percent coverage of costs, but rather to the hospital with which she had an affiliation. First, the HMO would only pay 80 percent of the bill. This left a bill to Mrs. Becker for $3,000. The HMO did not pay the bill within 60 days. The New York City hospital added a $1,500 surcharge for late payment. Mrs. Becker is now expected to pay the additional sum of $4,500.

Had the appropriate selections been made, the Becker family would not be dunned for $4,500. This is a sum that this hard working family, surviving on two incomes, finds to be extremely large.

In another case, Kevin Connor suffered a medical injury and was placed into a rehabilitation hospital for care. Subsequent to his discharge, he received a large bill which his insurance carrier initially declined. While a partial payment was subsequently paid, the hospital began its attempts to collect the unpaid funds from the patient. The patient had complained that he never received much of the rehabilitation therapy supposedly provided. Therapists would show up for 10 minutes and bill for an hour or not even show up at all.

Who is to be believed? Do you believe a patient who might want to get out of a bill or therapists who want to get in their billing hours and cut corners on the work delivered? How many other plans and patients have been billed for work that could not be done on a patient, was only partially done or not done at all?

Admission Rites

Then there is the case of Judith Ferraro. Her medical gatekeeper diagnosed an ovarian cyst and recommended surgical removal. The HMO approved the removal of the ovary and the fallopian tube on that side. However, unknown to the patient was the fact that the physician did not have hospital privileges to do such surgery nor proper credentials within the HMO. With HMO approval and hospital permitted, this uncredentialed physician performed the surgery. There was a complication.

At a subsequent point, the patient returned to the hospital in question and one physician proposed admission. The HMO declined indicating that the patient could just as easily be admitted the next morning. The patient left the hospital and when she returned the next morning, fell into a coma. The patient had been asked whether or not she wanted to be admitted, but was told that the insurance company did not feel it was necessary, and so declined to be admitted.

The hospital had a policy of denying admission to a patient if the admission was not precertified. The physicians knew that if they admitted the patient and the insurance company declined payment, the patient would be responsible for the costs. However, they also knew that the patient would raise questions about unnecessary bills. The hospital does not want patients admitted when the insurance company declines to pay and would look to the patient to pay. It is the rare case when the patient makes the decision involving admission. The patient leaves that decision as well as the decision as to what is ultimately done to the physician.

Most patients are medically unsophisticated. They do not and cannot be expected to know when assistants are needed and appropriate during surgery. A particular surgeon might feel more comfortable having an assistant in a particular case while a second might feel that an assistant was superfluous. Would this mean that the former surgeon should be prohibited from performing the operation because of the extra and "unnecessary" cost to the patient? Should the HMO have responsibility to the patient for the qualifications and capabilities of the surgeon performing the procedures under the circumstances that they require? If the first surgeon decided to proceed without the assistant that he felt would be useful and had a problem, should it be his/her responsibility or that of the HMO?

The federal and state governments are very concerned when providers bill for services that are not rendered. Who is providing similar protection for the patient who is responsible for the bills when other entities do not pay them.

It is necessary that the patient receive appropriate protection. The so-called "Patient Bill of Rights" touches on only a small portion of the problem.

Inadequate Treatment

Finally, there is the example of inadequate treatment. A patient receives a prescription for an MRI. The procedure is done on inadequate equipment or done poorly. When the images are seen by the surgeon, a second MRI is requested. The insurance carrier either denies permission for a second MRI or denies payment. Where does the responsibility lie. The patient is requested to pay the bill. The HMO tolerates the inadequate care and an inadequate entity is enriched.

There may be patients who are inappropriately delinquent on paying their bills. They get dunned and sent into collection. There may be physicians who inappropriately bill and abuse patients for funds. They can develop poor reputations and could lose their licenses. When HMOs have problems, they raise their premiums.

Patients need protection from delayed payments by insurance companies, from phantom treatments from providers and from becoming pawns in the never-ending fight between carriers and providers. The proposed patient bill of rights and federal legislation will not solve these problems.