Health law is little used

State has ordered insurers to pay for care 5 times since Jan.

Denials upheld in 9 cases

Bulk of challenges resolved in mediation after review is begun

July 06, 1999|By Greg Garland | Greg Garland,SUN STAFF

A new law that allows Marylanders to challenge denials by their health insurers is working well, state regulators say, but they are handling fewer cases than expected.

Since the law took effect Jan. 1, the Maryland Insurance Administration has ordered health maintenance or other insurers to pay for services five times. In one case, an insurer was ordered to approve inpatient hospital treatment for a suicidal adolescent. The treating physician thought hospitalization was necessary, but the health plan had approved only outpatient treatment.

Another HMO balked at paying for a machine to help a patient with sleep apnea, a condition in which breathing is interrupted during sleep. It was ordered to pay for the device.

The decisions of insurers were upheld in nine other cases and partially upheld in another.

D. Robert Enten, an industry lobbyist, said the numbers indicate that reports of HMOs' denying coverage for medically necessary procedures have been overstated.

"I think this shows that [HMOs] are doing a good job of adequately addressing the needs of their members, much better than the anecdotal stories told to the press and governmental entities would lead you to believe," Enten said.

State regulators say the few cases that went through the full appeals process are only a small part of the picture. Hundreds of other disputes have been resolved through mediation, without a formal hearing, they note.

Most complaints never make it to the insurance department. They are settled early in the process, after the complaint goes through the state attorney general's Health Advocacy Unit for initial processing.

"We've had tremendous success at the entry level through mediation," said Attorney General J. Joseph Curran Jr.

He said about 80 percent of the 450 complaints referred to his office during the first half of the year resulted in patients' receiving the coverage they sought.

"We're particularly impressed with the ability of the attorney general's office to mediate cases that come to their attention," said T. Michael Preston, executive director of the state medical society.

In some cases, HMOs have reversed course on their own and approved coverage for a procedure soon after a complaint was filed, said Joy Y. Hatchette, the insurance department's associate commissioner for consumer complaints.

"I think we're accomplishing exactly what the legislature wanted," Hatchette said.

Insurance Commissioner Steven B. Larsen said he thinks managed-care organizations are being more careful about their decisions because they know they can be challenged through the state's new appeals process.

"The insurance carriers had to beef up their internal grievance processes as part of the law," Larsen said. "I think they are paying more attention to their initial decision-making."

Through May, he said, his agency had logged 243 complaints about insurers denying coverage for procedures they said were unnecessary, the types of cases covered by the law.

Premature filings

The department lacked jurisdiction in about 40 percent of those cases, Larsen said, because they involved people covered by Medicaid or Medicare or who were working for companies with self-insured health plans, which are exempt from state regulation under federal law.

Of the remaining complaints, Larsen said, about three-fourths were found to have been filed with the insurance department prematurely. Except in emergency cases, people must first take their complaints through an insurer's internal grievance process.

The attorney general's Health Advocacy Unit assists people in filing internal grievances.

The five cases that went through the full appeals process involved a variety of issues.

Holly A. Williams of New Carrollton turned to the state when her HMO refused to pay for hospital rehabilitation services for her daughter, Aricka Williams, 18.

Fines levied

Prudential HealthCare had denied coverage, essentially arguing that Aricka, who was left nearly paralyzed last fall by viral encephalitis, could not be helped by the services her doctors were recommending.

"The insurance company wanted to put her in a skilled nursing home facility because it's cheaper," Williams said. "Money is the thing. If I hadn't been there to speak and fight for her, she would have been stuck in one of those nursing homes."

The insurance department ordered the HMO to pay for the services eight days after Aricka's mother filed her complaint.

Larsen said fines of $1,000 and $5,000 were levied against two HMOS in the five cases that went through the full appeals process. Six managed-care organizations were fined $1,000 each for failing to properly notify patients of their appeal rights, and another was fined $5,000 for refusing to allow members to have their lawyers present during the internal grievance process.

Many not covered

Larsen said he remains concerned that a large segment of Maryland's population -- those in self-insured plans -- are not covered by the law. About half of the 3.5 million Marylanders who have private health insurance are in self-insured plans.

Enten, the industry lobbyist, said he has heard no complaints from his clients about how the law is working. He said it serves a function.

"My reaction is that we need to assure the public, at least at this point in time, that if there's a dispute that can't be resolved, they have a place to go where it will be fairly and impartially resolved," he said.

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