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On Monday afternoon, I spoke with Lynne H, UHC's Director of Media Relations. As noted last week, I had already discussed the issue with the Communications VP at United Health Group, and the UHC Account Coordinator at Medco. There have been two basic concerns here:First, the original mis-pricing which cost my co-worker over $100, andSecond, ascertaining the extent of the problem (how many other insureds have been affected?).
Yesterday (the 15th), my co-worker spoke again with the Medco Account Coordinator, who assured her that there is no dispute on their part that this occurred (thanks to the screenshots we kept), but that he had never seen this particular problem before (more on that in a moment).He went on to confirm that, now that they're aware of the problem, they're looking to correct it going forward, and that they would issue a credit to her charge card for this transaction (which we have confirmed has taken place). He also confirmed something we already knew: that the system does, in fact, know the status of her account (deductible credit, claims paid, plan design, etc), and that it takes these factors into account.The underlying problem seems to be that the med that showed up with the $33 pricing was, in fact, not available through the Medco mail-order program, and that an alternative (more expensive, natch!) was substituted. According to "the Medco guy," this was an honest mistake, not an attempt to defraud my co-worker.I'll accept that - we have numerous enough examples of Stupid Carrier Tricks to support such a contention.Finally, he and his staff will be reviewing their customer service processes; the fact that this took almost 2 weeks, numerous emails and phone calls, and two blog posts to be resolved does not reflect well on their current practices. It didn't help that my co-worker was told to wait 3 days and then call them; this is also not acceptable, and they're working on that, as well.Here's the thing: I do appreciate the quick response once the powers-that-be at UHC and Medco read the original post. It's humbling for me to know that IB is able to help folks amplify their voices, and that what we say has some authority. On the other hand, just because the Medco guy has never seen this before doesn't mean that it hasn't happened (or doesn't continue to happen). How many folks have run into this and just thrown up their hands in resignation that they've been "screwed by the insurance company again?"Hopefully, this is a small number of insureds, and the problem will now be a thing of the past.Thanks to UHC's Tyler M and Lynne H, and Medco's Steven W for their help in resolving this.
Surprisingly, DC isn't the only place you'll find clowns (amateur or otherwise):[Hat Tip: David Williams]
Mike Cannon, Director of Health Policy Studies at the Cato Institute (and FoIB), has a thought-provoking proposal:"A key battleground is whether states will implement the law by creating government bureaucracies that Obamacare euphemistically calls health insurance "exchanges" ... Creating any sort of exchange is unnecessary, wasteful and counterproductive."But it's in the law we had to "pass to learn what's in it."Mike proposes a simple, elegant alternative:"States are under no obligation to create these bureaucracies, however, and many have wisely refused."Worst-case scenario? HHS "makes them" do so.Keep in mind, though, that the Exchanges are still several years away, and "(i)f the Supreme Court overturns Obamacare, any money [states spent] creating an exchange would be wasted."I would add several additional factors:First, there's a distinct possibility that, come 2014 (when the Exchanges are scheduled to come online) we'll be calling her former HHS Secretary Shecantbeserious.Second, we've seen how well the ObamaPools© have worked; any takers on whether or not the Exchanges will fare any better?
Under new rules, Ohio agents must now renew their licenses every two years (this is separate from CE requirements, and a change from the previous "perpetual license" model).The renewal process is itself unnecessarily (and counter-productively) difficult, tedious and ill-defined. I'd like the Department to investigate and correct this, but with the new administration, I no longer have the connections necessary to "get this done."I know that folks from the DOI read IB; would one of you please be kind enough to contact me to discuss this issue?I also know that some of our readers may have appropriate contacts in the Department; would you please let me know if you can help?Thanks!!
FoIB David Williams hosts this week's extensive round-up of great medblog posts. As usual, he adds his own unique perspective (and dry wit) to each post. Do stop by.
What might these two seemingly unrelated items have in common:TNR's Maisie Allison tipped us to "How American medicine is destroying itself." It begins with a 50 year old quote stating that "complete and lasting freedom from disease is but a dream remembered from imaginings of a Garden of Eden."The question at the heart of the article is quite simple, really: Can we really conquer disease? At what price?We've had a War on Poverty, a War on Drugs, a War on Illness. Untold billions (trillions?) of dollars later, victory has still not been achieved (and yes, defining "victory" is another challenge altogether). Are we spending our resources wisely?Let's continue, shall we?FoIB Bob D alerted us to this Policy Digest essay which asks "Will Comparative Effectiveness Research Kill More People than It Helps?"The premise of this piece is that, among the myriad of potential treatment options available for a given diagnosis, it's often challenging to determine which one is the most effective. The process by which this is determined is called Comparative Effectiveness Research (CER), and it's one of the New, Hot Things© on the health care radar.It's also the subject of a major push by the Feds to generate more cost effective health care results.But will it?According to a study by folks at the University of North Carolina (Hi, Jeff!) and the Center for Medicine in the Public Interest, the answer is a resounding "Nope:""Instead, it will force cuts in pharmaceutical and medical device research and development, resulting in 32 million lost years of life and economic losses totaling $1.7 trillion."And why is this?Well, here's a clue:"Health care costs are the focus of most policy considerations because this demand is heavily subsidized by taxpayers."Ya think?I believe that there are some dots that can be connected here. How about you?
HHS Secretary Shecantbeserious may be relaxing some privacy rules:"The Department of Health and Human Services says patients should have the right to see who has accessed their electronic health records."The advent of HIPAA dramatically changed how I do business. For one thing, I can no longer routinely call up clients' docs to ask for help with medical records. It's more difficult (and time consuming) than ever to get answers from a home office. Keeping up with all the privacy rules threatens to become a second vocation.But I don't feel any more secure, and I'm not convinced that my clients do, either. And I'm not sure that the new rules (as proposed) do much to allay those concerns:"(P)eople would be able to request an "access report," which would name the particular persons who viewed their electronic health records ... it would not explain the purpose of that access."If anything, I think this would engender even more distrust about the use of our private health information.
[Insert NY CongressCritter reference here]
This is what "health care" looks like when the government runs the system:
About a year ago, we wrote about Preference Cascades:"in which people who have been obliged to conceal their true beliefs by social pressure or sheer force suddenly discover that a lot of other people feel the same way."This concept holds true not just for individuals, though, but also for businesses (and business owners).A few days ago, Bob wrote about a recent survey which predicted that "up to 30% of employers may cease to offer health insurance to their employees" come 2014. The impetus for this exodus will be the Exchanges, wherein employers will be able to offload health insurance to that government program.Today at lunch, my friend Tom remarked that he thinks that number is just the tip of the proverbial iceberg. That is, only about a third of employers today, some 3 years out, claim they'll be dumping their group plans. But Tom thinks that once this initial group sheds their health insurance onus, many, many more will follow suit.In this case, the Preference Cascade would go like this: large corporations, which tend to strategize in 5 (or more) year increments, see the writing on the wall. They know that they can divest themselves of an expense which is almost impossible to control, with numbers that are nigh unto impossible to predict, and which involve many additional dollars and man-hours in admin costs. For them, 2014 is almost literally around the corner, and they can easily plan to put that expense back onto their employees (and the government).So a third are already planning for this, and Tom thinks at least one third more will jump onto the bandwagon. And why not? After all, if you're an "early adopter" then it's possible that some of your employees will look for jobs at one of your competitors that still offers group coverage. But there will be (at least) two major hurdles: first, if we're correct (and I think we are), then the Preference Cascade will have already begun its work, and there will be far fewer employers offering coverage. Couple that with continued high unemployment, and the question then becomes: where are these folks going to go?It actually gets worse, though: Medium sized businesses, which Tom theorizes plan in 36-month cycles, aren't really thinking about this yet, but beginning next year, it will definitely be on their radar. They, too, will see an opportunity to get out of the group insurance rat-race. And again, the same factors affecting employees of larger companies will come into play here, as well.Now, I've long been on record as an advocate of privately-owned health insurance. That is, I don't think health insurance should be tied in any way to one's employment (after all, your boss doesn't buy your groceries for you, or pay your mortgage company). The problem is that the mechanism predicated in ObamaCare©
is even worse than the current system.It's the worst of both "be careful what you wish for" and "we have to pass it to read what's in it."
Political Calculations hosts next week's CavRisk. Entries are due by Monday (the 13th).NB: We're now using this submission tool: The BC WorkAroundOnce there, you'll be asked to provide:■ Your post's url and title■ Your blog's url and name■ Your name and email■ A (brief) summary of the post ("Remarks")At the bottom of the form, you'll see a drop-down menu; simply select "Cavalcade of Risk" then press "Submit" and you're good to go.And PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).
It's not often that the insurance industry coughs up something that's truly "new," but I must admit, this certainly seems to qualify:"Hospital Recovery Insurance ... pays cash benefits upon discharge from the hospital, helps ... in the recovery stage following a hospital stay."Unlike typical insurance plans, which pay (or help to pay) for the hospital stay itself, this one pays after you've been discharged and (presumably) on your way to wellness. I "click[ed] here to download the 4-page pdf," and (after completing a routine form), found myself staring at a "Plan-At-A-Glance" flyer.It's kind of interesting: you can select a benefit of $100 to $999, payable for each day that one spent in the hospital (up to 15 days-worth). Seems pretty simple and straightforward, and the list of exclusions actually make sense (no benefits payable for, for example, "engaging in hazardous activities," "elective surgery that is not medically necessary," and "normal pregnancy except for complications of pregnancy," among others).They even included rates, which are age- (but not sex-) based. For example, a 35 year old can buy a daily benefit of (for example) $300, which becomes a "bank" of $4500, for about $17 per month. On the other hand, I have to believe that their primary market is going to be folks a little further along life's path: at age 75 (the oldest for which premiums are provided), the rate soars to $78 a month for that plan (which makes sense).They didn't provide a sample policy or application in the announcemail (understandable), but one presumes that it's fairly simple.I'm not necessarily convinced that this is really "must have" coverage, but it's nice to see folks looking for new marketing ideas, and thinking outside the box.
Just a quick note to bring readers up to date on the UHC/Medco issue:■ I've been in voice and email contact with a Vice-President of United Health Group (UHC). So far, this has consisted of trading voicemails, and a quick document dump (me to him).■ Received a call from the Medco rep in charge of the UHC account (more voicemail).I've explained to both gentlemen that I appreciate their offer(s) to help resolve my co-worker's specific problem, but that we need to also address the big picture going forward.■ Connected with my contact at HHS, who has provided me contact information for his counterpart at the Inspector General's office. I'm holding off on making contact until UHC and Medco have a chance to make a good faith effort at resolution.■ Finally, I've reached out to a friend with contacts at the Ohio Attorney General's office. My previous experience with that agency is that it's best to have a specific person with whom to connect.As an aside, Bob noticed something interesting in the email I received from my HHS guy:"Is your co-worker a Medicare beneficiary? As far as I know, HHS only investigates fraud against HHS programs."Which is a fair cop, but as Bob asks: "Why would HHS only get involved in Medicare claims when [HHS Secretary Shecantbeserious] thinks she has domain over all things concerning health insurance?"
UPDATE: Resolved.
Health Care Reform legislation mandated temporary federal assistance to medical benefit plan sponsors toward the cost of their early retiree (i.e., pre-Medicare) benefits. Congress appropriated $5 billion of taxpayer money to fund this mandate, called the early retiree reinsurance program (ERRP). In the legislation ERRP was set to end no later than January 1, 2014 when the main provisions of health care reform kick in - - and thus is temporary.It now appears ERRP is even more temporary than Congress imagined.The Department of Health and Human Services released this report on ERRP May 13, 2011. [look under "Recent Changes"] The report shows that ERRP payments for requests submitted through March 31 and paid thru May 3 totaled almost $2.5 billion, or nearly half the total appropriation. HHS notes in their report that, “due to the significant response among the employer community, the program ceased accepting applications on May 6, 2011.” Significant reponse is an understatement. But, remember, it was supposed to be temporary. As it turns out - - very temporary. Considering applications received after March 31 that are not yet reflected in the total ERRP payments, it’s clear that the money is running out much sooner than expected. It’s even possible plan sponsors whose applications were approved after March 31 will not be reimbursed for the full amount of their 2011 eligible expenses. And as for 2012, 2013? - - fugheddabouditt !The HHS report lists the benefit plan sponsors that have received ERRP payments, and the amounts paid. There are 1,748 plan sponsors on the list. Of these, 16 (fewer than 1%) received a total of just over $1 billion (42% of all the payments). These 16 plan sponsors include 5 corporate plans (e.g., AT & T, Verizon) which were paid about $301 million; 2 union benefit trusts paid about $246 million; and 9 State employee retirement systems (e.g., Ohio, Kentucky) paid $485 million. The largest single recipient is the United Auto Workers Retiree Medical Benefits Trust which, according to the HHS report, was paid $220,717,012.70. Your tax dollars at work - - right down to the last penny.On the other hand, ERRP is a metaphor for the health reform legislation of which it is a part: big on promise, inadequate on delivery, and grossly unprepared for the actual demand.
Fraud:
A false representation of a matter of fact—whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed—that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury.
[emphasis added]People wonder why health insurance carriers are held in such low esteem.It's pretty simple: when you pull idiotic stunts like this, you will get bit in the behind.We're all for consumer-driven healthcare, which means that we take seriously the idea that we should exercise good judgment when purchasing said care. My co-worker takes a certain medication which has gotten rather pricey, and United HealthCare recommended that she switch to the lower cost generic equivalent. Like many carriers, UHC outsources its prescription medication function to a Pharmacy Benefits Manager (PBM); in this case, that's Medco.My co-worker saw the wisdom in this course of action, and went online to get pricing for the new medication. The Medco site specifically told her that it would be $33.12 for a 90 day supply (this in contrast to the $132 brand-name version). Since this represented a great savings (and since we're covered under a high deductible HSA plan), she immediately pulled the trigger for the $33 generic.Imagine her surprise when, the next day, her credit card was charged for $153 - a 450% increase.Is this fraud?Well, look at the definition above, and draw your own conclusion.My co-worker then spent quite a bit if time on the phone with the Customer NOservice folks, who assured her that they'd "look into it," and that she should call them back in 72 hours.I had a better idea:I contacted our service rep, explained the problem, and provided documentation. I also informed her that I needed resolution by 9:00 AM the following day. She did call me back, and told me that she had been told that the pricing my co-worker had been given (based on our plan and group number) was available only after she had met her deductible. Unfortunately for UHC/Medco, not only was none of this disclosed on the site, but clicking on the link "How is my cost determined" actually confirmed the $33.12 price tag, putting the lie to UHC/Medco's little dodge.I had originally given UHC/Medco until 9:00 AM yesterday (June 2nd) to resolve this problem. Because I'm basically a fair guy, I decided to extend that by 24 hours.Which has now come and gone.And so:First, this post alerting our readers that UHC and Medco seem to have no compunctions about bait-and-switch when dealing with med's, nor are they forthcoming with details as to how rx claims are adjudicated. This makes it impossible for insureds to budget, or to make informed decisions.Next, I'll be calling the Ohio Attorney General, to report this apparent case of fraud.Finally, I'll be calling my CongressCritter, and suggesting that this may represent a much bigger number of victims than just my co-worker.Now you may ask: "Henry, why so serious?"And here's my answer: I spend a lot of time and energy explaining to people why a gummint-run health care system is so much worse than one run by private industry. But this is no better than the stunts pulled by the MVNHS©. So tell me again why our system's better?
Update: RESOLVED!
As we continue to follow the strange case of the Life Partners debacle, Bob tipped me to this related item:"Gilbert Eastin’s finances have fallen steeply from 2008, when the West Bloomfield man’s net worth was estimated at more than $2.5 billion ... Eastin, 82, is being sued for more than $2 million in U.S. District Court in Detroit, accused of inflating his net worth to obtain millions of dollars in life insurance."His (alleged) mark? John Hancock Life, which was somehow persuaded to approve $50 million in coverage.$50 Million??One can only imagine the medical exam for that much insurance.As we saw with the LP fiasco, this appears to be a growing, if not already widespread, problem:"Insurance industry experts say the allegations appear to match a pattern of fraud emerging nationwide. Senior citizens are recruited to inflate their net worth ... and then transfer the policies to investors in exchange for money."On the one hand, I still maintain that a legitimately purchased life insurance policy is the same as property (that is, the owner is free to dispose of it as he or she sees fit). The problem, of course, is that these policies are, in fact, fraudulently purchased, and enjoy no such latitude.The alleged "victim" here earns The World's Smallest Violin:"Eastin now admits he's no billionaire ... The retired Chrysler plant supervisor says he's a victim of shadowy businessmen from New York."Of course, of course."Crooks will do a lot of things to develop a patsy," says the perp, er, "victim."But he was the one who completed the application, took the exam, and presented whatever false documentation was necessary to "perpetrate the fraud" in the first place.All he had to say was "no."
Last we checked, the goofy ObamaPool© program had few takers, and the new numbers aren't encouraging; only "about 18,000 people nationwide have enrolled in the plan over the past year."Keep in mind, the Congressional Budget Office had estimated that something like 4 million Americans would qualify for the program. That's a response rate of less than one-half of one percent.Ouch.So the program's a bust, even though it offers immediate coverage for pre-existing conditions (even maternity!) at extremely competitive rates. A normal, profit-driven insurer would take stock, examine the marketplace, and immediately close it down.But this is ObamaCare©, so the gummint's response would be?Of course:"The federal government said Tuesday that it will slash premiums by 40 percent to entice more Arizonans to join a high-risk insurance plan for people with pre-existing medical conditions." [emphasis added]Rest assured, the Grand Canyon State won't be the only one to reap the benefits; with the $5 billion initial seed money already on the table, the other 56 states won't be far behind in demanding their fair share of the premium reduction bonanza.The good news, such as it is, is the the Federales may be onto something with this wrinkle:"In addition to reducing premiums and making it easier for people to enroll, the federal government will expand its outreach to the business community ... Sayen said Medicare officials this fall plan to reach out to insurance brokers ... to reach more potential customers."Gee, where have we heard this idea before?The catch?"He said it is too early to tell what type of commission may be available to insurance brokers."More rocket-surgery from Washington.
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