Kids and Health Care: Disputing Decisions
Most HMO disputes are handled -- at least initially -- by arbitration. The arbitration body is paid a daily rate that typically ranges from $750 to $1,200, with the process itself usually lasting from one to three days. All parties agree to abide by the decision instead of litigating.
But patients-rights advocates contend that many times, consumers don't even realize that they've locked themselves into arbitration. And increasingly, the courts have shown that they, too, are concerned about the fairness of forced arbitration in managed care contracts.
Unlike HMOs (which usually have to respond within six months), traditional indemnity plans don't have to respond to your complaints within a set time frame or have provisions for a formal hearing or appeals process. But if you are not satisfied with your insurer's willingness to pay a claim, you can ask for a reconsideration of the decision.
If you have problems getting paid, an indemnity plan allows you to choose your method of recourse, i.e., the court system or mediation. In addition, you have the option to appeal any decision by your insurance company to pay or deny a claim.
You can also file a complaint with your state's Department of Commerce or Department of Insurance -- and you don't have to tell your insurance company first. You will have to fill out a complaint form and supply any information needed to support your position to the state agency.
State investigators will then contact your insurance company; and, if the problem cannot be resolved within 10 days, they will investigate whether the company followed the terms of your policy.
In most states, the company's review of your denial includes two steps -- an informal review followed by a formal review if you remain dissatisfied after the informal review.
If you appeal to a state or federal agency, include your name, address and daytime phone number with any complaint.
It might be good to use the Insurance Department complaint form. To obtain a copy of the form call your state's Insurance Department's hotline number. (You can usually find these numbers in the opening pages of your phone book, or look online.)
State your case briefly, giving a full explanation of the problem. Include the name of your insurance company, policy number and the name of the agent or adjustor involved. Also supply any documentation you have to support your case, including phone notes (who you talked to and what was discussed).
Another tactic used by insurance companies: Delay in payment of claims. Despite laws requiring insurance companies to pay unquestioned medical claims within 15 working days, some companies take up to six months or longer to compensate patients.
In 1998, three Florida-based physician organizations -- a prominent 30-member OB/GYN group in Jacksonville, the 4,000-member Florida Physicians Association and the 16,000-member Florida Medical Association -- filed a class action lawsuit against Prudential Health Care Plan, Inc., accusing the company of systematically denying and delaying payment on large claims and losing others. The MDs wanted to stop the alleged practices and recover interest on the claims and damages that they say exceeded $10 million.
The organizations had internal documents that proved Prudential made a policy of automatically rejecting claims once the insured person submitted more than $1,000 in medical bills on the basis that the covered person had other insurance, even though the plan had no knowledge of such co-insurance.
In fact, Prudential officials acknowledged that only 5 percent of its members had such dual coverage arrangements as those that exist when a husband and wife are covered by separate health plans, according to the physician organizations.
The groups also charged Prudential with knowingly losing claims that were filed electronically.
Prudential had little to say about the suit. Since 1998, this lawsuit -- alongside others against other HMOs -- were consilidated into one large case against managed care. Some of the class-certified dependents (like Aetna and Cigna) decided to settle. The remaining class-certified dependents -- including Prudential -- were set to go to trial in June 2004.
