Insurer revoked HIV patients' coverage

[Spindrift]

For those who think our current healthcare system is so fantastic:

http://www.msnbc.msn.com/id/35910173/ns/health-health_care/

Shortly after his diagnosis, however, his insurance company, Fortis, revoked his policy. Mitchell was told that without further treatment his HIV would become AIDS within a year or two and he would most likely die within two years after that.

 

[JoeTheJuggler]

And sadly, stories like this are not incredibly flukey exceptions. (I first thought that was probably the case when I saw Michael Moore's Sicko.) The House Energy committee investigated the subject of rescission and post-claim underwriting, and found that stories like these happen all too frequently.

http://energycommerce.house.gov/Press_111/20090616/rescission_supplemental.pdf (Warning 10.5 mb file.)

 

[The Painter]

You forgot to mention this;

Company ordered to pay $10 million for dropping policy

It's right in the headline.

Poor bastard only got 10 million. I guess he can pay for his own health care now. He also got heath care at a clinic without the insurance. So he didn't die within a year or two.

 

[JoeTheJuggler]

You forgot to mention this;



It's right in the headline.

Poor bastard only got 10 million. I guess he can pay for his own health care now. He also got heath care at a clinic without the insurance. So he didn't die within a year or two.

And if he hadn't found some other way to get treatment, he would have been dead before his estate got the money.

The rescission happened in 2002. The first jury decision (for $15 million) happened in 2004, and the state supreme court upheld the verdict but reduced the award to $10 million in 2009.

And again, this story is not at all exceptional. And there are cases where the insured actually died or was financially ruined (especially in cases where the claim was denied after it was previously approved and after the treatment was already done).

 

[theprestige]

Insurance companies cancel policies all the time, for all kinds of reasons. Should they pay out on an invalid policy, simply because their audit happened to coincide with some bad health on the part of the policyholder?

That said, I'm sure many insurance companies have policies or procedures in place such that any time a policyholder applies for coverage from their policy, this triggers an audit.

And to the extent that this happens, I think it's pretty much a jerk move on the part of the insurance companies. I mean, of course it's in their best interest to begin accepting premium payments on a new policy right away, but postpone their due diligence until the policyholder applies for coverage.

I also think it would be a pretty easy bit of health care reform to pass, in almost any political climate:

• Policy audits could be required to be time-based (every six months, every four years, whatever) rather than event-based.
• If a policy audit results in a policy cancellation, that cancellation must occur after any treatment already approved under the policy has been covered per that policy.
• The above rules would not apply during the first year of coverage (to prevent freeloaders from buying a policy without disclosing a preexisting condition, getting treatment approved, and being exempt from cancellation).

Such a reform would make it in the insurance companies' best interest to do their due diligence on new policies right away, before they were committed to pay out on approved coverage for an invalid policy.

Pow. Recission problem solved. And without a monolithic dog's breakfast of a massive overhaul bill that apparently has something for everybody to hate.

 

[Upchurch]

Insurance companies cancel policies all the time, for all kinds of reasons. Should they pay out on an invalid policy, simply because their audit happened to coincide with some bad health on the part of the policyholder?

er... from the article:

Previously undisclosed records from Mitchell's case reveal that Fortis had a company policy of targeting policyholders with HIV. A computer program and algorithm targeted every policyholder recently diagnosed with HIV for an automatic fraud investigation, as the company searched for any pretext to revoke their policy. As was the case with Mitchell, their insurance policies often were canceled on erroneous information, the flimsiest of evidence, or for no good reason at all, according to the court documents and interviews with state and federal investigators.

You'll excuse me if I'm don't really give a about the poor insurance companies.

 

[joobz]

Insurance companies cancel policies all the time, for all kinds of reasons. Should they pay out on an invalid policy, simply because their audit happened to coincide with some bad health on the part of the policyholder?

That said, I'm sure many insurance companies have policies or procedures in place such that any time a policyholder applies for coverage from their policy, this triggers an audit.

And to the extent that this happens, I think it's pretty much a jerk move on the part of the insurance companies. I mean, of course it's in their best interest to begin accepting premium payments on a new policy right away, but postpone their due diligence until the policyholder applies for coverage.

I also think it would be a pretty easy bit of health care reform to pass, in almost any political climate:

• Policy audits could be required to be time-based (every six months, every four years, whatever) rather than event-based.
• If a policy audit results in a policy cancellation, that cancellation must occur after any treatment already approved under the policy has been covered per that policy.
• The above rules would not apply during the first year of coverage (to prevent freeloaders from buying a policy without disclosing a preexisting condition, getting treatment approved, and being exempt from cancellation).

Such a reform would make it in the insurance companies' best interest to do their due diligence on new policies right away, before they were committed to pay out on approved coverage for an invalid policy.

Pow. Recission problem solved. And without a monolithic dog's breakfast of a massive overhaul bill that apparently has something for everybody to hate.

I am not certain if it is the case here, but many of these individual health insurance plans that students get are considered "renewable". Meaning, the insurance policy restarts every year. Some of these policies interpret that to mean that any condition you had in the previous policy window would be considered a "pre-existing condition" to the next year's policy period.


As to the story listed, read my sig line for the libertarian take on health care.

 

[Rolfe]

That doesn't seem to have been the case here - it was an erroneous date on a single note (2001 instead of 2002, but the note included in the 2002 notes and no other reference to a diagnosis in 2001) that caused the recission.

I was selecting a few paragraphe of the article, to illustrate the situation, but it started to get out of hand. It's worth reading the lot. Here's my first-pass selection.

Previously undisclosed records from Mitchell's case reveal that Fortis had a company policy of targeting policyholders with HIV. A computer program and algorithm targeted every policyholder recently diagnosed with HIV for an automatic fraud investigation, as the company searched for any pretext to revoke their policy. As was the case with Mitchell, their insurance policies often were canceled on erroneous information, the flimsiest of evidence, or for no good reason at all, according to the court documents and interviews with state and federal investigators.

Fortis canceled Mitchell's health insurance based on a single erroneous note from a nurse in his medical records that indicated that he might have been diagnosed prior to his obtaining his insurance policy. When the company's investigators discovered the note, they ceased further review of Mitchell's records for evidence to the contrary, including the records containing the doctor's diagnosis.

Nettles also suggested that Fortis should have realized the date in the note was incorrect: "Not only did Fortis choose to rely on one false and unreliable snippet of information containing an erroneous date to the exclusion of other information which would have revealed that date to be erroneous, Fortis refused to conduct any further investigation even after it was on notice the evidence which aroused its suspicion to be false," the judge noted.

Their motive, according to the judge, was obvious: "The court finds that Fortis wrongfully elevated its concerns for maximizing profits over the rights and interest of its customer." In upholding Nettles' verdict, the South Carolina Supreme Court similarly ruled that "Fortis was motivated to avoid the losses it would undoubtedly incur in supporting Mitchell's costly medical condition."

After his insurance was canceled, a case worker with a social agency who works with HIV patients named Mary Wiggins worked tirelessly for Mitchell to find him medical care and to have Fortis reinstate his insurance. Despite deluging Fortis with records and information that should have led to a reversal of the decision, the insurance company simply ignored her. Wiggins found a local clinic that agreed to provide care for Mitchell, in the process very likely saving his life.

This was systemic, deliberate, and apparently intended to wear down a seriously ill customer so that he died or gave up before they had to pay any money. How many other people did the strategy work with?

I've read tons of similar stories, and they send a chill down my spine. I don't understand how all the US posters who seem so happy with their great coverage can be sure something like this could never happen to them.

Rolfe.

 

[Ohforf]

This Insurance Company treats Customers like Livestock -
if you cant make a profit its better to let them die.

 

[Spindrift]

This was systemic, deliberate, and apparently intended to wear down a seriously ill customer so that he died or gave up before they had to pay any money. How many other people did the strategy work with?

Rolfe.

And this company is not some rogue insurance company. This despicable practice is unfortunately not unique.

But hey, there's nothing wrong with the 'best' system in the world.

 

[JoeTheJuggler]

That doesn't seem to have been the case here - it was an erroneous date on a single note (2001 instead of 2002, but the note included in the 2002 notes and no other reference to a diagnosis in 2001) that caused the recission.

The House investigation memo I linked to above has a series of categories of these sorts of mistakes being used as grounds for rescission. The first one is the story cited in the OP, I think.

If the insurance companies find discrepancies, omissions, or misrepresentations, they can retroactively cancel policies, return premiums, and refuse payment for medical services.

This practice is known as "post-claims underwriting."

The documents produced to the Committee also include other examples of controversial
practices, including the following:

• Insurance companies rescind coverage even when discrepancies are unintentional or caused by others. In one case reviewed by the Committee, a WellPoint subsidiary rescinded coverage for a patient in Virginia whose insurance agent entered his weight incorrectly on his application and failed to return it to him for review. The company's Associate General Counsel warned that the agent's actions were "not acceptable" and recommended against rescission, but she was overruled.
• Insurance companies rescind coverage for conditions that are unknown to policyholders. In 2004, Fortis Health, now known as Assurant, rescinded coverage for a policyholder with lymphoma, denying him chemotherapy and a life-saving stem cell transplant. The company located a CT scan taken five years earlier that identified silent gall stones and an asymptomatic abdominal aortic aneurysm, but the policyholder's
  doctor never informed him of these conditions. After direct intervention from the Illinois Attorney General's Office, the individual's policy was reinstated.
• Insurance companies rescind coverage for discrepancies unrelated to the medical conditions for which patients seek medical care. In November 2006, a Texas resident with a policy from WellPoint was diagnosed with a lump in her breast. The company initiated an investigation into the patient's medical history and concluded that she failed to disclose that she had been diagnosed previously with osteoporosis and bone density loss. The company rescinded her policy and refused to pay for medical care for the lump in her breast.
• Insurance companies rescind coverage for family members who were not involved in misrepresentations. When a UnitedHealth subsidiary determined in 2007 that a policyholder in Michigan failed to disclose his abnormal blood count and other conditions, the company also rescinded coverage for his spouse and two children. When his spouse called to find out "[w]hy we dropped whole family instead of husband," the company official "[c]alled her back told her coverage was voided to medical history not on app."
• Insurance companies automatically investigate medical histories for all policyholders with certain conditions. WellPoint and Assurant informed the Committee that they automatically investigate the medical records of every policyholder with certain conditions, including leukemia, ovarian cancer, brain cancer, and even becoming pregnant with twins. UnitedHealth was unable to explain specifically how its investigations are triggered, claiming that it utilized a computer program so complex that no single individual in the company could explain it.
• Insurance companies have evaluated employee performance based on the amount of money their employees saved the company through rescissions. The Committee obtained an annual performance evaluation of the Director of Group Underwriting at WellPoint. Under "results achieved" for meeting financial "targets" and improving financial "stability," the review stated that this official obtained "Retro savings of $9,835,564" through rescissions. The official was awarded a perfect "5" for "exceptional performance."

And it happens often. Here's a rough idea of the numbers (from the same source):

The three insurance companies testifying at today's hearing reported to the Committee that they rescinded at least 19,776 policies from 2003 to 2007.16 This number significantly undercounts the total number of rescissions because one company, UnitedHealth, failed to provide data for 2003 and 2004, and another company, WellPoint, did not provide data from all of its subsidiaries.

That's why as much as I dislike the current healthcare reform bill Congress is likely to pass, I'm in favor of it to put an end to this practice. The insurance industry says that they can only stop these practices if this sort of healthcare reform (in particular, the individual mandate) passes:

In written testimony for today's hearing, all three insurance companies stated that the passage of comprehensive health care reform legislation, including a system where coverage is available to everyone and all Americans are required to participate, would eliminate the controversial practices of denying coverage based on preexisting conditions and rescinding policyholders for omissions in their medical records.

 

[JoeTheJuggler]

This Insurance Company treats Customers like Livestock -
if you cant make a profit its better to let them die.

You're not even exaggerating. See the last bullet point in that section I quoted from the House investigation report. It's chilling.

 

[Rolfe]

This Insurance Company treats Customers like Livestock -
if you cant make a profit its better to let them die.

I'm a vet. We treat our patients better than that, actually.

Rolfe.

 

[Rolfe]

And this company is not some rogue insurance company. This despicable practice is unfortunately not unique.

But hey, there's nothing wrong with the 'best' system in the world.

Hey, The Prestige is cool with it! Gotta turn a profit, after all!

It's fairly obvious that the insurance industry is saying that it's not prepared to cover serious illness - or certainly not all cases. Recission is the way it "keeps prices down" for its healthy customers. Yeah, by doing the sums on the assumption that it can weasel out of a significant number of expensive claims.

The system is deliberately designed to leave the most vulnerable people out in the cold, on the callous assumption that nobody wants to fund it to cover these situations.

Meh. Who would be American?

Rolfe.

 

[JoeTheJuggler]

It's fairly obvious that the insurance industry is saying that it's not prepared to cover serious illness - or certainly not all cases. Recission is the way it "keeps prices down" for its healthy customers. Yeah, by doing the sums on the assumption that it can weasel out of a significant number of expensive claims.

And I don't think that's even what their goal is (keeping prices down even for their low-risk policy holders).

The system is deliberately designed to leave the most vulnerable people out in the cold, on the callous assumption that nobody wants to fund it to cover these situations.

Amen.

There's even something worse [ETA: perhaps not "worse" but equally bad--except that it's said overtly] I keep hearing lately: that everyone should pay for his or her own healthcare. The fact is, it's almost impossible for anyone with a serious condition requiring expensive treatment to pay in to the system what they take out.

 

[Architect]

I notice that none of the usual opponents of UHC have made an appearance here today....

 

[The Painter]

And this company is not some rogue insurance company. This despicable practice is unfortunately not unique.

This Insurance Company treats Customers like Livestock -
if you cant make a profit its better to let them die.

Are you all missing the point on purpose? This is not usual or acceptable policy. He sued and won. Are you all that brainwashed??? A wrong was righted. The system of recourse worked. If the government were his insurer would he have been able to recover money? No,you can't sue the government.

 

[theprestige]

er... from the article:


You'll excuse me if I'm don't really give a about the poor insurance companies.

You're excused. In fact, I think if you read the rest of my post, you'll see that we pretty much agree.

 

[theprestige]

Hey, The Prestige is cool with it! Gotta turn a profit, after all!

What am I "cool with", exactly?

 

[Cleon]

I'm a vet. We treat our patients better than that, actually.

Rolfe.

Well, by the time the Democrats are finished gutting health care reform to accommodate themselves, it will consist of the sole provision that insurance adjusters cancel your policy by saying "bad boy!" and swatting you with a newspaper.

So maybe we're not so far off...