Article published June 20, 2009
Keeping insurers honest
SELDOM has there been such a vivid illustration of the urgent need for reform of how health care is paid for in this country than a recent appearance before Congress of insurance company executives defending the practice of canceling medical coverage after the fact, leaving sick policyholders unexpectedly holding the bill for treatment.
This odious practice is known as "recission," and it apparently occurs more frequently than the insurance industry is willing to admit. While the ostensible purpose is to reduce fraud, blameless individuals often are hurt in the process when payment is denied.
According to the Los Angeles Times, which has dogged this issue for more than three years, a House investigatory subcommittee found that three major health insurers canceled coverage of more than 20,000 people over a five-year period, thereby avoiding payment of more than $300 million in claims.
Moreover, the panel found, the insurers reward employees for finding niggling reasons or technicalities to cancel coverage for those needing expensive treatment for such ailments as cancer.
The insurance industry denies that this is the case, claiming that recission is, as one executive testified, "about stopping fraud and material misrepresentations that contribute to spiraling health-care costs."
But when Rep. Bart Stupak, a Michigan Democrat who leads the subcommittee, directly asked executives for WellPoint Inc., UnitedHealth Group, and Assurant Inc., whether they would end the practice except in cases of "intentional fraud," all three said no.Panel members took that answer as an admission that recission is employed by insurers not only as an anti-fraud tool but also as a way to fatten their profits. Rep. John Dingell (D., Dearborn) said it points up the need for a "public option," which is Democrat-speak for a government-sponsored health plan to compete with private insurers and keep them honest.
The subcommittee heard testimony from several individuals who told how their coverage was abruptly ended, in some cases even after insurers had authorized treatment.
A Los Angeles woman said her policy was canceled for failing to report irregular menstruation and previous use of a weight-loss medication she no longer was taking.
For a Texas nurse suffering from breast cancer, the excuse was that she failed to disclose a visit to a dermatologist for acne.
Also cited was the case of an Illinois man whose bills for cancer treatment were denied after his doctor noted a possible aneurysm and gallstones in his chart but never discussed them with the patient.
While insurers certainly are entitled to deny payment in cases of actual fraud, Congress should make sure that any health-care reform legislation contains strictures against inadvertent acts now used to justify recission.
Anyone who has ever dealt with insurance payment or reimbursement following an illness knows that it can be a complex, time-consuming, and often puzzling process.
Patients should not be hit with the additional malady of bills denied for bogus reasons.
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