Nine million federal workers, retirees and their families face a new obstacle -- and almost impossible odds -- when trying to fight claims that have been denied by their health insurers.
The new obstacle is little-noticed regulations that change how anyone in this group fights a decision by an insurer not to pay a medical bill. Instead of suing the insurance company, the worker must sue the federal government while following procedures that make it difficult to mount a successful challenge.
The interim regulations, declared effective when they were published two months ago, streamline the entire appeals
process. Any claim, from an expensive drug to a brain scan, could be affected.
Federal officials said they have not been challenged on the new rules. Members of the public can comment on them until Tuesday by contacting the Office of Personnel Management (OPM) in Washington. After comments are considered, changes may or may not be made.
OPM is the agency that oversees the Federal Employees Health Benefits Program (FEHBP).
The federal health care program -- touted during the health reform debate as a national model -- may become one of the worst in terms of the rights it gives its members, according to several attorneys and a Democratic congresswoman.
"We thought it was such a good system," said Rep. Patricia Schroeder a Colorado Democrat. "With these regulations, the government can just simply declare a drug or treatment experimental and refuse to pay for it."
She was particularly critical of the change that forces aggrieved workers to sue a federal agency rather than their insurers. "The insurance companies are going to love this. They now have got themselves hermetically sealed . . . and the federal government takes the hit."
Advocates of the change praise the greater efficiency and increased uniformity, meaning a postal worker in Baltimore will get the same benefits as a food inspector in California.
"The clarified procedures are intended to allow for the cost-effective, uniform system of benefits that is the foundation of the largest, best managed health care program in the country," OPM officials said in a statement.
The officials refused to be named for this article. But through OPM spokeswoman Sharon Wells, they insisted that there would be no change in access to health care or expensive treatments.
Critics argue that the regulations create a conflict by giving the federal agency that pays for health benefits a great deal of power over whether a worker will get a disputed benefit.
OPM supervises the 345 health plans that provide insurance to federal workers, retirees and their families, and pays for the majority of their health care, a price tag that runs about $14.5 billion a year.
Like most Americans who have health insurance, federal workers can appeal to the insurance company if it refuses to pay a claim. If the company still denies the claim, people can lodge complaints with their state insurance commissions. More commonly, if they want action and can afford it, they file lawsuits.
But Congress wanted to give federal workers a way to resolve these disputes without the hassle and expense of court. So it set up a system where after appealing to the insurance company, employees could take their claim to OPM.
The current issue stems from OPM's review. Because the agency has the power to review an insurance company decision and order the company to pay the benefit, courts have disagreed as to who is liable -- the insurer or OPM.
OPM officials say the new regulations simply clarify this issue.
"We think it's just a neutral, procedural change," an OPM official said. "There has been some confusion and dispute as to how this review process worked. . . . We think the only real change here is that OPM is now the named defendant."
But attorneys and others say the new regulations greatly narrow the legal rights of workers who want to fight denied claims.
The rules give insurers and OPM up to six months to respond to appeals, even in life-threatening cases.
The rules also restrict the information a patient can bring to court to whatever documentation OPM officials had when they made their decision. Attorneys say that change means a case might turn on a single letter from a doctor rather than stacks of studies that could prove a treatment was appropriate.
Finally, the patient must show that OPM officials did not act "arbitrarily and capriciously." Attorneys who have worked these cases say that standard is extreme.
"It makes it almost impossible. As long as OPM can show they had some reason for denying, you lose the case," said Sheldon Weinhaus, a St. Louis attorney.
Additionally, since the court review is on paper only, the patient's attorney has no chance to challenge information or cross-examine witnesses, said Arlene Gilbert Groch, a New Jersey attorney.
