Healthcare: Doctors Denying Benefits
Part II of a series on healthcare reforms
Adam J. Wolfberg wrote an excellent commentary for the Boston Globe today on “Hippocritical Doctors”. The issues he describes in his column go right to the heart of the issues at the heart of the PBM problem in my previous posts and deeper to the heart of the overall brokenness of our healthcare system.
Dr. Wolfberg’s daughter has cerebral palsy. The best treatment for her condition is physical therapy which was denied by his insurance by two separate doctors paid to review and deny claims. Describing his experience, he notes the following:
While one of these doctors has no expertise with cerebral palsy, the second one does. In his other job, he cares for children with severe physical disabilities and is a proponent of therapy for disabled children. As he wrote to me in an e-mail, “my personal view is that children with [cerebral palsy] benefit from therapy services.” However, in his review of my appeal, he wrote a careful explanation justifying why the health plan should not pay for the therapy.
So two doctors, one with NO expertise in the area of treating children with cerebral palsy, and one with extensive experience in the field and who holds the personal opinion that children benefit from physical therapy, are charged with saving the insurance company the cost of covering the therapy. Dr. Wolfberg definitely has an opinion about this:
This doctor and others like him are making money denying care – and they might as well hang up their white coats. They may believe that their administrative decisions are medically justifiable. However, it often appears that they are hired because their MD degrees lend a patina of legitimacy to administrative decisions that are based on interpretation of a health plan’s policies, not a chart, lab test, or CT scan.
This is the dark side of our healthcare system: There is only incentive to deny claims, not to evaluate them fairly and approve or deny based upon facts, expertise and the best interest of the patient. The ones who are harmed are the patients, with real conditions, some life-threatening, others not. Dr. Wolfberg concludes with this:
Individuals are harmed when medical care is withheld. Many of these health plan doctors, whose job it is to reject claims, end up being paid to violate the Hippocratic oath they took when they graduated from medical school – to “first, do no harm.”
That is the heart of the matter: There is an irreconcilable conflict when insurance companies place physicians, bound by oath to do no harm, in a position where their decisions are driven by the bottom line instead of the patient’s needs. The most qualified individual to determine a patient’s needs is their own PHYSICIAN. What we have here is a system where the decisions of treating physicians are disrespected in favor of an arms-length review and denial by colleagues who sold their white coat for a paycheck.
Anyone seeking a career as a doctor (particularly one in general practice) today would have to be certifiably insane. Assuming they make it through medical school, their internship and residency, they come away with tremendous debt. Then they are injected into a system where their decisions are second-guessed by insurance company physicians, their malpractice insurance costs equal more than they pay for their homes, their rates are dictated by arbitrary price-fixing and they have to navigate a maze of red tape and paperwork to see patients at all.
Contrast this with one person’s recent experience in an emergency room in France:
…there’s no paper needed anywhere, no forms, no signatures. The French have developed what I would call the USERNAME system of medicine. Just like many web sites who just want you as a user and don’t really care about your real identity, the French Emergency Health care system is the same. They would like to know who you are but they do not need to know who you are when you are in a medical emergency.
…there’s absolutely no paperwork. I had never seen anything like that. You tell them your name, they believe you, you tell them your address, they believe you. They don´t ask you for medical insurance nor for any kind of payment and the whole admission takes at most 45 seconds.
… the legal system is mainly absent from French medicine. When it was all done it was shocking for me to leave the hospital without having to sign any release forms. The surgeon herself notified the administrative staff that I was done and she released me simply saying that I could go home without seeing anybody.
This author concludes:
But what’s wrong with the American health experience is that it is invaded by a lot of elements that are foreign to medicine. The result is a cost so onerous that the percentage of GDP Americans spend on medicine is much higher than in France but the results are very disappointing.
Indeed.
(Hat tip to Kevin, MD for the link to Dr. Wolfberg’s article)
Technorati Tags: medical benefits, claims review, health insurance
Sphere: Related ContentHealthcare Reform: PBMs Don’t Save Money
[First in a series on healthcare reform]
Those who read my personal blog know that I have a special place on my hit list for Pharmacy Benefit Managers, or PBMs. This stems from: a) My personal experiences and ongoing struggles to force Caremark to honor their contract and cover prescription ADHD medications which are necessary and which are prescribed by a qualified physician after the proper diagnosis was made, and b) My professional experience as a third-party pension administrator with more than 20 years time in the business and a better-than-average understanding of ERISA and employee benefit plans.
In our current healthcare system, PBMs are viewed as a cost-saving mechanism to deliver prescription medications to insureds under contracting health insurance plans. Let’s be clear: They are an invention of the major insurance companies, who separated themselves from pharmacy benefits in order to continue to realize profits on one of their largest profit centers while becoming non-profit corporations.
In fact, PBMs create an additional layer of administrative costs while serving as a pathway to deny legitimate benefits to insureds while keeping the insurance companies’ involvement at arms-length. They are the unclothed emperor of the health insurance industry, but there are some who are calling them what they are.
Recently, I wrote that Caremark dodged a legal bullet when a Federal Appeals Court ruled that Caremark had no fiduciary liability for denying benefits to covered individuals, defining them as a contract administrator only. I disagree with this ruling for a number of reasons, despite the party line that the Caremark employee-commenters like to leave about how the insurance contract dictates the benefits, Caremark merely carries out the contractual arrangement and so on. The fact is that it is Caremark and Caremark employees, qualified or otherwise, which make the determination as to whether or not to deny access to a “prior authorization required” medication. I have copies of letters proving that, where a gastroenterologist who has not practiced for two years denied my access to ADHD medications.
Now it seems, the courts and state legislators are waking up to that fact. Over on the Health Plan Law blog, they report that PBMs just lost a significant decision, and that there is legislation pending to regulate PBMs in 36 States and the District of Columbia. They report:
Thus, state lawmakers are taking seriously the allegations of fraud and abuse by PBM’s and are doing something about it.
In this particular case, the courts continued to hold that PBMs are not fiduciaries under ERISA. (Note: That determination does not preclude them from being considered fiduciaries under a less restrictive standards. ERISA is one of the most restrictive definitions of fiduciary on the books). This particular aspect of the ruling went to the benefit of the PBM, since it stands to release them from any liability for arbitrary and capricious denial of benefits.
What was good about this particular ruling was the larger issue: State regulation of PBMs. It paves the way for states to force transparency and disclosure, which is definitely a victory for insureds who are subject to their whimsical claims denials, as well as unbridled rebating practices and other methods of lining executives’ pockets.
In other litigation involving Caremark and Medicaid, it seems that Caremark was denying claims for Medicaid reimbursement, because the insureds were not presenting a Caremark card and therefore not compliant with the pharmacy benefit plans they administered. But here’s the catch: The insureds in the TennCare plan could not comply with the card presentation requirement because the agency responsible for Medicaid benefits did not have a card. Further, Medicaid is the final payor if there is other coverage present. In other words, all other avenues for payment have to be exhausted before Medicaid will make a claim for benefits. When TennCare would file with Caremark for reimbursement, they were denied on the basis of not presenting a card and not filing a timely claim.
Caremark effectively constructed a Catch-22 that insureds could not navigate their way through: They created compliance requirements that the insureds could not meet.
The court ruled that the requirements were discriminatory against Medicaid; however, Caremark has still weaseled away from any liability by passing it through to the insurance company it serves. If Caremark has the power to deny payment of benefits and is subsequently found to be liable for those benefits, the cost for the benefits pass through to the insurance company.
All of this leads back to this question: What good is the PBM?
The answer: Not much. On the Health Plan Law Blog again, an excellent analysis of the utility (or non-utility) of the current PBM structure.
PBM’s promise to deliver cost savings to health plans through plan design, effective purchases of appropriate pharmaceuticals, disease management and various ancillary services. The PBM’s dictate the formularies that drive traffic toward certain drugs and away from others based on reimbursements that the PBM’s specify. Inasmuch as the big are posed to get even bigger, these current events present an occasion to reflect on the utility and effect of the PBM mechanism in the American health care system.
The entire post should be required reading for anyone interested in our current healthcare delivery system and the corrupt structure of the PBMs. It points out that the use of rebates is rarely passed through to the consumer, though the price for acquisition of prescription medications is increased in the United states by 50-70%, mail order savings are not passed through to the consumer, there is non-transparency of price fixing on generic medications, bloated costs associated with an additional layer of administration, and the liability for claims denial skips the PBM and lands at the feet of the employer and insurer anyway. Those factors say to me that the answer to whether PBMs help or hurt the healthcare system is clearly “NO”.
If we are to have any hope of arriving at meaningful healthcare reform, it’s going to be necessary to shed the idea that there are sacred cows which cannot be sacrificed. There isn’t much dispute that the current system is broken, and rather than putting a bandaid on it, we’d do better to look hard at each piece of the current system and make a decision about whether it should remain in a reformed system. I do not believe there is a place for PBMs in the reformed system. Claims management for pharmaceuticals should follow a standardized procedure that encompasses all claims, with no special carve-out for pharmacy benefits. I would be much more supportive of a system that applied fair and non-discriminatory standards to prescription drug coverage than the arbitrary, capricious, and profit-taking system we have now.
Technorati Tags: Caremark, PBM, ExpressScripts, healthcare reform, pharmacy benefits, courts, legal
Sphere: Related ContentWhy isn’t anyone concerned about these break-ins?
Via the Huffington Post, this report of a key computer stolen from MN Democrats’ HQ. I blogged earlier about a break-in at the New Hampshire Democratic headquarters.
There has been almost no national press on this. Why not?
Technorati Tags: democratic headquarters, break-in, crime, politics
Sphere: Related ContentBlog No Evil
The two Edwards campaign bloggers who were under fire last week for exercising their right to free speech resigned today in the face of some interesting ‘valentines’ from some folks claiming to be good, God-fearing Christians, citing concern for the negative impact on the campaign.
Of course, by NOT being attached to the campaign, they’ll be much freer to speak their mind and I’m certain they will. I just wish some of the folks calling themselves Christians would stop. It’s mortifying. Politics and religion shouldn’t be mixed together. Christians shouldn’t be threatening toward others ever. The blend of those two factors is an utter disaster. Score one for the bad guys in good guys’ clothing. What a mess, but at least there’s some serious pushback on the conservatives who sparked and fueled this nasty war of words.
This has been going on for a very long time. Before bloggers, message boards were the target. Back in the dark and gloomy days of the Clinton impeachment, the CNN Community was deluged 24/7 with trolls paid to try and shut down the conversation by spamming the boards over and over again with meaningless rhetoric. We used to play tag-team board moderation — one of us would be banning by the dozen while the other was mopping up the mess on the boards in real time.
If I close my eyes and think about it, I can almost quote them verbatim, because the message hasn’t changed, just the target and the method of delivery. Now that they have a ready-made platform on Fox News, they’ve become bolder, but still uncreative and cretin in their delivery.
Perhaps the campaigns should not pay bloggers at all. Maybe they should provide a platform (similar to the MyBarackObama.com site) for people to blog and that’s it. That way the best political bloggers can maintain their own voices and choices of expression without risking the campaigns, and no one can plaster the ‘paid shill’ label on them in the process (one of the milder accusations dropped this week).
Technorati Tags: John Edwards, Amanda Marcotte, Pandagon, Melissa McEwan
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