California Investigates Insurers
LOS ANGELES (CN) - Attorney General Jerry Brown is investigating how the state's top insurance companies, including Kaiser and Anthem Blue Cross, review and pay claims. Brown said the "public is entitled to know whether wrongful business practices are involved" in the "dysfunctional" insurance system, in which major HMOs are denying from 28 percent to 40 percent of claims.
"This inquiry is needed because there were reports that HMOs are denying claims of up to 39.6 percent," Brown's spokesman Scott Gerber said.
"The inquiry is just getting started, so we don't have any details of what kinds of claims are being denied. But in the coming days our deputies will be reviewing records and speaking with a broad range of people."
The California Nurses Association reported that 2009 rejection rates range from 28 percent for Kaiser and Anthem Blue Cross to 39.6 percent for PacifiCare.
Judy Dugan of the Santa Monica-based advocacy group Consumer Watchdog said one of the primary reasons for the HMO system's dysfunction is its for-profit emphasis that puts patient care on the back burner.
"They (HMOs) seem to be happy to take care of slightly healthy people, but their dollar alert goes up when it's expensive," Dugan said. "They don't have any huge interest in figuring out what effective care is and isn't and sometimes it seems random when they deny something as not medically necessary."
In the never-ending quarrels between doctors and insurance companies over who will pay for care, Dugan says patients are left with the bill.
"Doctors don't want to deal with it, so they'll lay it on the patient, because the patient is the weakest link," Dugan said. "The Doctors Association in California has continuously beaten back legislation that would require insurance companies and doctors to work this out."
Dugan said Consumer Watchdog tries to help patients publicize their horror stories, but people often won't do it, for fear of retaliation from their HMO.
"These things happen to people who are just frantic," Dugan said.
She cited a recent case in which a woman who had severe intestinal cancer was denied treatment from a specialist because it was outside of her HMO plan.
"She was in a very strict, mini-HMO, and they just wanted her to go to a small hospital they had a contract with that had no specialist or surgeon for her disorder," Dugan said. The woman refuses to go public with her story. "People won't share their stories because they're just frightened to death of the insurance companies," Dugan said