When Sol Shipotow enrolled in a new Medicare Advantage health plan earlier this year, he expected to keep the doctor who treats his serious eye condition.
“That turned out not to be so,” said Shipotow, 83, who lives in Bensalem, Pa.
Shipotow said he had to scramble to get back on a health plan he could afford and that his longtime eye specialist would accept. “You have to really understand your policy,” he said. “I thought it was the same coverage.”
Boosters say that privately run Medicare Advantage plans, which enroll about one-third of all people eligible for Medicare, offer good value. They strive to keep patients healthy by coordinating their medical care through cost-conscious networks of doctors and hospitals.
But some critics argue the plans can prove risky for seniors in poor or declining health, or those like Shipotow who need to see specialists, because they often face hurdles getting access.ils).
A recent report by the Government Accountability Office, the auditing arm of Congress, adds new weight to criticisms that some health plans may leave sicker patients worse off.
The GAO report, released this spring, reviewed 126 Medicare Advantage plans and found that 35 of them had disproportionately high numbers of sicker people dropping out. Patients cited difficulty with access to “preferred doctors and hospitals” or other medical care, as the leading reasons for leaving.
“People who are sicker are much more likely to leave (Medicare Advantage plans) than people who are healthier,” James Cosgrove, director of the GAO’s health care analysis, said in explaining the research.
David Lipschutz, an attorney at the Center for Medicare Advocacy, says the GAO findings were alarming and should prompt tighter government oversight.
“A Medicare Advantage plan sponsor does not have an evergreen right to participate in and profit from the Medicare program, particularly if it is providing poor care,” Lipschutz says.
The GAO did not name the 35 health plans, though it urged federal health officials to consider a large exodus from a plan as a possible sign of substandard care. Most of the 35 health plans were relatively small, with 15,000 members or fewer, and had received poor scores on other government quality measures, the report said. Two dozen plans saw 1 in 5 patients leave in 2014, much higher turnover than normal, the GAO found.
Medicare Advantage plans now treat more than 19 million patients, and are expected to grow as record numbers of baby boomers reach retirement age.
Kristine Grow, a spokeswoman for America’s Health Insurance Plans, an industry trade group, says Medicare Advantage keeps expanding because most people who sign up are satisfied with the care they receive.
She says that patients in the GAO study mostly switched from one health plan to another because they got a better deal, either through cheaper or more inclusive coverage.
Grow says many Medicare Advantage plans offer members extra benefits not covered by standard Medicare, such as fitness club memberships or vision or dental care, and do a better job of coordinating medical care to keep people active and out of hospitals.
“We have to remember these are plans working hard to deliver the best care they can,” Grow says. Insurers compete vigorously for business and “want to keep members for the long term,” she adds.
Some seniors, wary of problems ahead, are choosing to go with traditional Medicare coverage. Pittsburgh resident Marcy Grupp says she mulled over proposals from Medicare Advantage plans but worried she might need orthopedic or other specialized health care and wanted the freedom to go to any doctor or hospital. She’s decided on standard Medicare coverage and paid for a “Medigap” policy to pick up any uncovered charges.
“Everything is already in place,” says Grupp, a former administrative assistant who turns 65 this month.
The GAO report on Medicare Advantage comes as federal officials are ramping up fines and other penalties against errant health plans.
In the first two months of this year, for instance, the federal Centers for Medicare & Medicaid Services fined 10 Medicare Advantage health plans a total of more than $4.1 million for alleged misconduct that “delayed or denied access” to covered benefits, mostly prescription drugs.
In some of these cases, health plans charged patients too much for drugs or failed to advise them of their right to appeal denials of medical services, according to government records. Industry watchers predict more penalties are to come.
Last month, CMS officials ended a 16-month ban on enrollment in Cigna Corp.’s Medicare Advantage plans. CMS took the action after citing Cigna for “widespread and systematic failures” to provide necessary medical care and prescription drugs, policies officials called a “serious threat to enrollee health and safety.”
A flurry of whistleblower lawsuits have surfaced, too. In late May, Freedom Health, a Florida Medicare Advantage insurer, agreed to pay nearly $32 million to settle allegations that it exaggerated how sick some patients were to boost profits, while getting rid of others who cost a lot to treat.
Freedom Health allegedly kept a list of some “unprofitable” patients that it discouraged from staying in the health plan, while encouraging healthier, “more profitable” members to remain, according to the whistleblower suit. Federal regulations prohibit health plans from discriminating based on a person’s health.Asked by Kaiser Health News for comment, Freedom Health corporate counsel Bijal Patel emailed a statement that read, in part: “We agreed to resolve the case so that we can continue focusing on providing excellent care.”
Casey Schwarz, a lawyer with the Medicare Rights Center, a consumer service organization, notes that health plans are required to have a formal process for patients to appeal denials of medical services. She says patients should know their rights and insist on them.
“We want people to vote with their feet and leave plans not serving them,” Schwarz says.
Before he was diagnosed with head and neck cancer in 2015, Anthony Kinsey often went without health insurance. He is a contract lawyer working for staffing agencies on short-term projects in the Washington, D.C., area, and sometimes the 90-day waiting period for coverage through a staffing agency proved longer than the duration of his project, if coverage was offered at all.
When Kinsey, now 57, learned he had cancer, he was able to sign up for a plan with a $629 monthly premium because the agency he was working for offered group coverage that became effective almost immediately. The plan covered the $62,000 surgery to cut out the diseased bone and tissue on the left side of his face, as well as chemotherapy and radiation. His share of the treatment cost was $1,800.
If the American Health Care Act, which the House recently passed, becomes law, people like Kinsey who have health problems might not fare so well trying to buy insurance after a lapses.
The Republican bill would still require insurers to offer coverage to everyone, including people who have preexisting medical conditions, such as diabetes, asthma or even cancer. But it would allow states to opt out of the federal health law’s prohibition against charging sick people more than healthy ones. In those states, if people have a break in coverage of more than 63 days, insurers could charge them any price for coverage for approximately a year, effectively putting coverage out of reach for many sick people, analysts say. After a year, they would be charged a regular rate again.
Coming up with a figure for how many people have preexisting conditions that could put them at risk for facing unaffordable health insurance premiums has been the subject of debate, with estimates ranging from 133 million on the high end to 2 million on the low end.
What we know is that before the Affordable Care Act, known as Obamacare, insurers in the individual market frequently charged people more if they were sick. According to a 2009 survey of individual market insurers by America’s Health Insurance Plans, a trade group, 34 percent of coverage was offered at higher-than-standard rates, while 6 percent of those offers included waivers that excluded coverage for specific conditions.
But some health-policy analysts suggest that it’s not only people who have a gap in coverage who could be affected if a state seeks the health law waiver. There could be consequences for anyone with a preexisting condition, even those who have maintained continuous insurance coverage. That’s because the bill opens the door for insurers to set rates for people based on their health. For example, those without a health condition could be offered discounted premiums.
“If you have a preexisting condition, you’re going to be put into the block of business with the sicker risk pool,” said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms.
Requiring people to maintain continuous coverage is the Republicans’ preferred alternative to Obamacare’s individual mandate that requires people to have insurance or pay a fine. But there are many reasons people may have a gap in coverage, especially if they’re sick, say consumer advocates.
“If they’re diagnosed with cancer and going through a grueling treatment, they might move closer to their caregiver or the cancer center,” said Kirsten Sloan, vice president for policy at the American Cancer Society Cancer Action Network. “They may quit their job for that reason, or they may lose their job.”
Once people have a gap in coverage they may really be in a bind if the available coverage is unaffordable. To address this, the Republican bill requires states to set up a high-risk pool or reinsurance program or participate in a federal risk-sharing program.
State high-risk pools, which were available in 35 states before the ACA passed, have been widely criticized, however, as inadequate for people with expensive health care needs. Premiums were often extremely high, and there were frequently lifetime or annual limits on coverage. Some plans excluded coverage for as long as a year for the very conditions people needed insurance.
Still, Thomas Miller, a resident fellow at the American Enterprise Institute, says high-risk pools offer a reasonable solution for the 2 million to 4 million people in the individual market he estimates have preexisting conditions but would otherwise be medically uninsurable or offered such high-cost coverage that they couldn’t afford it. The $130 billion over nine years that the bill sets aside to use for high-risk pools or other individual market activities, along with an additional $8 billion over five years for states that get waivers from ACA community-rating requirements, “could be adequate” to meet the need, he said.
Besides, he argued, the higher rates would last for only a year.
“Once you’ve paid up, you graduate back to the regular market,” Miller said. “It’s not like being sentenced to the Gulag.”
Kinsey said he plans to keep his coverage up to date from now on, but he doesn’t think it’s fair to charge sick people higher rates even if they have a break in coverage.
“It would be problematic,” he said. “I’m not in favor of that.”
A coalition of physician advocacy groups and insurers that includes the Blue Cross and Blue Shield Association and insurance industry lobbying group America’s Health Insurance Plans is asking Congress to reject a provision in the 21st Century Cures Act that lets some lets some hospital-owned outpatient facilities avoid some site-neutral payment rules.
The Alliance for Site Neutral Payment Reform called on House Energy and Commerce committees leaders to oppose exempting cancer hospitals and other outpatient departments under development before Nov. 2, 2015, from the payment policies passed as part of the Bipartisan Budget Act of 2015 and finalized by the CMS earlier this month.
Modern Healthcare reported: “The alliance said the 21st Century Cures provisions would continue to drive up costs for Medicare and patients and would encourage hospitals to swallow up independent physician practices, thereby reducing patient choice.”
The group’s letter to Congress said: “Preserving an outdated reimbursement policy that continues to drive up healthcare spending in the outpatient space is counter to Congress’s goal of modernizing the Medicare system and providing patients with healthcare choices at less cost.”
Modern Healthcare reported that “Insurers want to limit the exceptions to the site-neutral payment rates because those exempted outpatient facilities will ultimately be paid more and insurers want to keep Medicare reimbursement low. Moreover, prices tend to float up when providers consolidate, so insurers end up paying more.”
The publication noted: “Medicare pays a higher rate for services provided in a hospital’s off-site facility rather than a physician’s office. The CMS and the Alliance for Site Neutral Payment Reform said this difference has led to hospitals buying up physician offices to receive higher rates, increasing costs for both Medicare and patients.”
Having health insurance is vital for 21-year-old Mercedes Nimmer, who takes several expensive prescription drugs to manage multiple sclerosis. So Nimmer was thrilled to get health insurance last year through the Affordable Care Act’s marketplace and qualify for a federal subsidy to substantially lower her cost.
Yet, the government assistance still left her with a $33 monthly premium, a hefty amount for Nimmer, who makes $11,000 a year as a part-time supply clerk.
Nimmer, though, doesn’t have to worry about even that expense thanks to a United Way of Dane County program that has provided premium assistance to about 2,000 low-income people since 2014. The program, called HealthConnect, is funded by a 2013 gift of $2 million from UW Health, a large academic hospital system connected to the University of Wisconsin that also runs its own marketplace health plan.
“Oh my gosh, this is a big deal for me to get this help,” Nimmer said, noting that the insurance is vital to cover her medications. The money she saves from the assistance program goes to help pay for gasoline to get to work, she said.
HealthConnect is one of several community-based programs across the United States helping thousands of lower-income Americans with their Obamacare marketplace premiums. Similar efforts operate in Texas, Oregon, Washington, North Carolina and South Carolina.
But premium-assistance programs have come under fire from insurers. They argue that it is not fair for hospitals, other health providers and disease-advocacy groups financed by providers to try to steer people who could be covered by Medicare or Medicaid into marketplace plans with higher reimbursement rates.
The federal government has banned hospitals from directly subsidizing patients’ health-insurance premiums. But America’s Health Insurance Plans, the industry’s lobbying group, wants the Obama administration to prohibit all premium-assistance programs that are funded directly or indirectly by hospitals and other providers with a financial interest in the patient’s care.
“In many cases these practices are harming patients and undermining the individual market by skewing the risk pool and driving up overall healthcare costs and premiums,” AHIP said in Sept. 22 letter to Andy Slavitt, the acting administrator of the Centers for Medicare & Medicaid Services. The letter notes specific concerns about plans assisting patients requiring kidney dialysis. It says one insurer saw its spending on those patients rise from $1.7 million in 2013 to $36.8 million in 2015 when the number of patients with serious kidney disease rose from 28 to 186.
AHIP officials also said patients could face consequences if the third-party groups stop paying premiums or the government determines patients are receiving a federal subsidy for which they are not eligible. America’s Health Insurance Plans wants the Obama administration to prohibit all premium-assistance programs that are funded directly or indirectly by hospitals and other providers.
CMS, in response, says it is considering new rules for third-party payment programs.
Nonetheless, insurers are taking action. Aetna, which announced this summer that it was scaling back its marketplace offerings, said that third-party groups steering patients to the individual market had contributed to an unhealthy mix of customers in its marketplace plans.
Blue Shield of California in July filed suit in a state court against CenCal Health, which manages the Medicaid program in Santa Barbara and San Louis Obispo counties. Blue Shield alleges that CenCal was avoiding millions of dollars in medical care claims by enrolling around 40 of its very ill members in Blue Shield’s individual health plans and paying the premiums on their behalf. CenCal denied the allegations in a lawsuit, saying that it paid the patients’ monthly Blue Shield insurance premiums so they could afford private insurance. It has since discontinued the practice.
UnitedHealthcare filed a lawsuit in federal court in July against kidney-dialysis provider American Renal Associates, accusing it of encouraging patients in Florida and Ohio who were eligible for Medicaid or Medicare to move to the insurer’s commercial plans to extract up to 20 times more than the $300 or so that the federal programs pay in reimbursements. American Renal Associates has said the suit is without merit.
The suit alleges that the patients’ premiums were paid by the American Kidney Fund, an advocacy group for patients.
AHIP officials note that the fund is supported by dialysis providers who stand to benefit financially from patients gaining marketplace coverage over payments from Medicaid or Medicare.
The nonprofit American Kidney Fund has helped more than 6,400 people with their marketplace premiums. The fund’s officials said it’s not trying to steer people away from government coverage but trying to help those who otherwise couldn’t afford coverage.
“It is critically important to emphasize that people with disabilities in general — and with end-stage renal disease in particular — should not be broadly excluded as a class from the insurance marketplace if they are unable to afford their health-insurance premiums,” LaVarne Burton, the fund’s CEO, said.
Some patient advocates, like those at HealthConnect in Wisconsin, say third-party payers have an important role in helping low-income customers afford their coverage. UW Health said that HealthConnect helps all providers, including UW Health, by reducing the number of uninsured patients and potentially helping people seek care earlier in their illness.
The program pays an average of $109 monthly per person in premium assistance. For every dollar spent, HealthConnect generates $2.26 in federal subsidies, said Krystal Webb, a spokeswoman for United Way of Dane County.
United Way said it structured HealthConnect to avoid a conflict of interest. Eligible people first buy their policy, which can be any of several silver-level plans on the federal marketplace. After that, they can apply for a HealthConnect subsidy. The program is administered by United Way, and UW Health plays no role in patients’ choice of health plan, although its marketplace plan, Unity Health, refers people who may be eligible there.
Despite AHIP’s concerns, some health insurers in Dane County say HealthConnect is filling a need, according to interviews with several plans. “We support United Way’s HealthConnect efforts as a way to provide affordable insurance options to the residents of Dane County,” said a spokesman for Dean Health Plan, one of the larger marketplace plans in the county.
In Texarkana, Texas, Christus St. Michaels Health System donated $200,000 last year to an assistance program serving 138 people with marketplace coverage. The program is run by a local government agency called the Ark-Tex Council of Governments, and Christus has no control over who enrolls or what plan they choose.
“Our mission is to help the poor and this is certainly one of the ways to do that, and it gives people the opportunity to have health coverage when they normally wouldn’t,” said Mike Hargrave, the hospital’s manager of employee assistance and community-outreach services. People with incomes between 100 and 150 percent of the federal poverty level (about $11,880 to $17,820 for an individual) are eligible.
Hargrave doesn’t deny that the hospital could benefit when more people gain insurance, but he notes other hospitals in the region benefit, too.
The insurance industry is also troubled by premium-assistance programs funded by anonymous donors since they could be hospitals looking to protect their identity, said AHIP spokeswoman Clare Krusing.
For example, PremiumHealth.org, run by United Way of the Greater Triangle, in North Carolina, helps more than 850 people with incomes between 100 percent to 175 percent of the federal poverty level in Durham, Orange and Wake counties.
An anonymous donor provided $1.2 million in funding for the program, said Melanie David-Jones, a senior vice president for United Way. She would not say why the donor wished to remain anonymous.
Noel Pitsenbarger, 48, of Durham, said the program made it possible for him to have health insurance this year by covering the $200-a-month premium for his Blue Cross Blue Shield of North Carolina policy. With insurance, he said, he got a colonoscopy, physical exam and help paying for several medications. And it saved him from having to pay a $1,000 bill after he cut his finger and had to go to the emergency room.
Rick Pollack, president of the American Hospital Association, and Marilyn Tavenner, CEO of America’s Health Insurance Plans, in a joint essay in The Hill press for improving federal marketplace offerings and lowering the cost of life-saving drugs.
Among other things, they urge physicians, nurses, health plans and other in the healthcare sector to join to push cost controls.
But they also discussed the successes in cost control that have been achieved in such areas as Medicare Advantage, Medicare Part D, Medicare Shared Savings Program and Medicaid managed-care plans.
“A healthy private market – with real choice, informed consumers, and effective care and treatments – can deliver better quality and affordable coverage for everyone,” they wrote.
They added: “Unjustified and unaccountable spikes in prescription drug prices are the engine of higher costs. Despite historic lows in overall cost growth for years, drug spending grew by more than 12 percent in 2014 – and is expected to outpace overall growth for the foreseeable future,” they wrote.
A bipartisan group of U.S. senators are introducing a bill to expand telemedicine service through Medicare benefits.
Modern Healthcare reports that the Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act (PDF), “would expand the use of remote patient-monitoring for some patients with chronic conditions, increase telemedicine services in community health centers and rural health clinics, and provide basic telemedicine benefits through Medicare Advantage.”
Backers also tout the measure as having the added benefit of helping providers meet the goals of the Medicare Access and CHIP Reauthorization Act and the Merit-based Incentive Payment System.
The CONNECT Act is supported by several industry groups, including America’s Health Insurance Plans, the American Heart Association and Kaiser Permanente.
“This bill would ensure that patients and their physicians are able to use new technologies that remove barriers to timely quality care. Importantly, the bill would maintain high standards whether a patient is seeing a physician in an office or via telemedicine,” said Dr. Steven J. Stack, president of the American Medical Association.
Herewith an interview with Marilyn Tavenner, the former CMS administrator who last year took over the leadership of America’s Health Insurance Plans, that industry’s leading lobbyist.
She talks about such challenges as getting UnitedHealth Group, the largest health insurer in the nation, and Aetna back into AHIP, as well as expanding Medicare Advantage membership, improving Medicaid managed care, the increasingly hot issue of pharmaceuticals pricing and healthcare delivery-system reform.
When Michael Kamins opened the letter from his insurer, he was enraged.
His 20-year-old son recently had been hospitalized twice with bipolar disorder and rescued from the brink of suicide, he said. Now, the insurer said he had improved and it was no longer medically necessary for the young man to see his psychiatrist two times a week. The company would pay for two visits per month.
“There was steam coming out of my ears,” Kamins recalled, his face reddening at the memory of that day in June 2012. “This is my kid’s life!“
His son again became suicidal and violent, causing him to be rehospitalized eight months later, said Kamins, a marketing professor at the State University of New York at Stony Brook. Kamins is suing the insurer, OptumHealth Behavioral Solutions, which disputes his version of events and denies that it left the young man without sufficient care.
Seven years after Congress passed a landmark law banning discrimination in the treatment of mentally ill people, many families and their advocates complain it stubbornly persists, largely because insurers are subverting the law in subtle ways and the government is not aggressively enforcing it.
The so-called parity law, which was intended to equalize coverage of mental and other medical conditions, has gone a long way toward eliminating obvious discrepancies in insurance coverage. Research shows, for instance, that most insurers have dropped annual limits on the therapy visits that they will cover. Higher co-payments and separate mental health deductibles have become less of a problem.
But many insurers have continued to limit treatment through other strategies that are harder to track, according to researchers, attorneys and other critics. Among the more murky areas is “medical necessity” review – in which insurers decide whether a patient requires a certain treatment and at what frequency.
Kamins is among a small group of people around the country to file lawsuits alleging federal or state parity laws were violated when patients with mental illness were held to a stricter “medical necessity” standard than those with other medical conditions.
“’Medical necessity’ is the insurers’ last hurrah,” said Meiram Bendat, Kamins’s lawyer, who filed the lawsuit in New York State court.
Bendat, who is seeking class-action status in the Kamins case and has filed other parity suits in New York, Illinois and California, said attorneys are acting because the government won’t.
Enforcement of parity laws is lax, he said, and companies are getting away with skirting their requirements.
In fact, only a handful of states have dug into whether insurers are complying with parity laws. And in the seven years since the federal law was passed, the U.S. government has not taken a single public enforcement action against an insurer or employer for violating the law.
Clare Krusing, a spokesperson for America’s Health Insurance Plans, the industry’s main trade/lobbying group, said it is “a misperception” that enforcement has been weak. Insurers are working closely with federal and state governments, she said, and “have taken tremendous steps to implement these changes and requirements in a way that is affordable to patients.”
Ensuring that mental health and other medical treatments are exactly on par is challenging, she said.
“A treatment plan for diabetes or a chronic heart disease is very different from a treatment plan for a patient that’s seeking care for depression or another mental illness,” she said. “It’s not a math formula.”
But Henry Harbin, former CEO of Magellan Health, a managed behavioral- healthcare company, said insurers are taking advantage of minimal oversight.
“They can micromanage care down to almost nothing,” said Harbin, who also served as Maryland’s mental-health director before becoming a consultant. “The enforcement in this area is a joke.”
When it passed in 2008, the federal mental health parity law was seen as a major achievement for Americans with mental illnesses.
Though some states already had their own parity laws on the books, there were serious gaps in the protections they offered. This law was to force insurers across the country to provide the same access to treatment as they do for cancer, diabetes and other conditions.
At the time, then-Sen. Edward Kennedy called the law “historic,” and praised his colleagues for finally ending “the senseless discrimination in health-insurance coverage that plagues persons living with mental illness.”
But enforcement was not assigned to any one agency. Instead, it fell to the departments of Labor, Health and Human Services and Treasury, as well as state insurance commissioners.
The Department of Labor, which is responsible for monitoring health insurance offered by large employers, set up a complaint line for consumers. Still, advocates say, most consumers don’t know they have new rights, and those that do often don’t know where to turn.
“It gets very complicated for the average person,” said Carol McDaid, who runs the Parity Implementation Coalition, an advocacy group created to make sure parity laws were properly enforced.
“They’re already in a [mental health] crisis, looking for help, and they don’t know if they should write and complain to their state insurance commissioner, the Department of Labor, the health department. It gets very difficult.”
Since 2010, just 867 of the 1.5 million total health insurance inquiries made to the Department of Labor had to do with the parity law, most of which were not complaints, a spokesman for the department said in May. A total of 140 cases of alleged parity law violations were found, and they were resolved through “voluntary compliance,” in which the employer agreed to pay for the patient’s services, the spokesman said. He said that the investigators also requested that the insurers change their broader policies, when appropriate.
Separately, HHS found 196 possible violations of parity law by insurers from September 2013 through September 2014, a spokeswoman said. In each case, she said, plans voluntarily made changes or told the agency they believed that their plan was in compliance with the law.
No action by a federal agency, however, resulted in a lawsuit, fine or public announcement.
“Our problem is that these investigations are all kept secret,” McDaid said. That means the decisions have no effect on what other employers or insurers do, and consumers don’t learn what to look out for, she said.
Former Congressman Patrick Kennedy, one of the authors of the parity law and who has suffered from bi-polar disorder, said timing was partly to blame for the administration’s sparse enforcement record.
“Parity got kicked down the track until the Obama administration could get the Affordable Care Act on track,” he said. It took five years for the government to issue final rules explaining exactly what insurers had to do to comply.
Enforcing laws against insurance companies, he added, was also a delicate undertaking.
“Insurance companies were part of the coalition that helped bring the ACA to life, and the administration feels an enormous debt of gratitude,” he said. “It’s a challenge politically to then step on the toes of those that brought them to the dance.”
Meanwhile, research points to some continuing inequities in coverage.
Data compiled on health plans in 2010, the first year of the national parity law’s implementation, disclosed that insurers frequently reviewed mental health treatment more strictly than other care. For instance, they more often required “preauthorization” for doctor visits or made patients “fail first” at one level of care before getting approval for another.
A study this year from the Johns Hopkins Bloomberg School of Public Health found that a quarter of the plans sold on two state Obamacare exchanges appeared to violate the federal parity law in various ways, including requiring higher cost-sharing for mental health. The states, one large and one small, were not named.
In a 2015 survey by the National Alliance on Mental Illness, an advocacy group for mentally ill people and their families, patients said they were denied payment because treatment was deemed “not medically necessary” twice as often for mental health as for other medical conditions.
Without strong government enforcement, patients and families say they are left to their own devices.
But demonstrating that an insurer has violated parity rules requires a detailed analysis of a plan’s mental health and medical benefits. And though the law requires that insurers disclose those documents, critics say they often are not complying.
The Parity Implementation Coalition in Washington, D.C., has received hundreds of consumer complaints to its helpline, but McDaid said virtually none of the health plans have been willing to release the necessary documents to demonstrate that there has been a parity violation, she said.
Krusing, of the insurers’ association, insisted that documents are being made available to patients and providers. “Plans are committed to being transparent about their coverage decisions,” she said. Decisions to deny treatment, she said, are based on ensuring that patients receive care based on the best medical evidence.
“We are still at a point in the health system where patients face wide variation in the type of care they’re receiving,” she said. “Oftentimes we see tests and procedures done that are costly and unnecessary for the type of care that they’re seeking or even help or benefit their condition.”
The federal government is considering whether to tighten disclosure rules for insurers. In the meantime, some consumers, including the Kamins family, are turning to the courts.
Debating What’s ‘Medically Necessary’
Kamins’s son had always been a star, according to his father, who holds his power of attorney and asked that the young man’s first name be withheld for privacy reasons.
As a boy, he was a quiet but quick-witted jokester, who graduated fifth in his high school class in 2010, Kamins said.
A few months after heading to an Ivy League college, however, he was overcome by depression, his father said. His grades slipped. He began experimenting with drugs. Then, in the spring of 2011, he tried to kill himself, according to Kamins and the lawsuit.
His parents brought him home to Los Angeles, where the family lives while Kamins commutes back and forth to New York. The family has insurance through Kamins’s job.
But Kamins said OptumHealth Behavioral Solutions would not cover inpatient care before his son had tried an outpatient program that focused on drug addiction.
That marked the first of several violations of parity law, according to Kamins’ lawsuit, which seeks a change in Optum’s policy and reimbursement for benefits denied, plus attorneys’ fees. By requiring the young man to “fail first” at a lower level of care before paying for more expensive residential treatment, Optum, a subsidiary of UnitedHealth Group, had created an illegal obstacle to mental health treatment, the lawsuit alleges.
“Imagine someone going to a hospital and being told you can’t get open-heart surgery in the midst of a heart attack because you haven’t tried aspirin or nitroglycerin first. That’s the absurdity of it,” said Bendat, Kamins’ lawyer. “It’s just a way to discourage higher levels of care that we would never tolerate in the non-psychiatric context.”
After the addiction program, Optum paid for the young man to see a psychiatrist a few times a week. His father said he began showing signs of improvement and seemed on track to return to school back East.
But in June 2012 — four months after the young man was hospitalized during a manic episode — the insurer’s letter arrived saying it was no longer “medically necessary” for him to see his psychiatrist so frequently.
That fall, the suit alleges, Kamins’ son tried to return to his Ivy League school. He found a psychiatrist and began going twice a month as he had been authorized to do in the letter, Bendat said. Kamins said he tapped into his retirement fund to pay for extra visits, but his son spiraled downward.
In court documents, Optum alleges that Kamins’ sson actually was entitled to more frequent visits with a new mental-health provider, suggesting that the limitation on visits applied only to the psychiatrist he had been seeing in California. The insurer argues that his subsequent hospitalization in February had nothing to do with limitations put on visits in California.
In a written statement, Optum officials said they “take the mental health needs of each of our members very seriously, and we are committed to helping them get care that has shown to be most effective in helping people overcome and live better with mental and emotional challenges.”
Kamins said that was not his experience.
“The irony in all this is that Optum fights tooth and nail to dole out care for my son. But had they allowed him upfront to get the care he needed, he might not have ended up back in the hospital, which they had to pay for,” he said.
As for Kamins’ sson, he returned to college in the fall of 2013. The next year, his father’s employer contracted with a new insurer, which Kamins said gave the young man greater access to care and helped him stabilize.
The poll, by the Kaiser Family Foundation, found that 87 percent of people surveyed want Medicare to have the authority to press drugmakers for greater discounts, as the Department of Veterans Affairs does for vets.
The soaring prices for crucial medicines have hit both health insurers and consumers, who are being asked to cover a higher proportion of their medications’ cost though bigger co-pays. While the Republican Congress is unlikely to allow such negotiations, political pressure and insurance-industry lobbying may make it happen within a few years.
“People don’t understand why these drugs cost so much, and they don’t understand why, in America, you can’t negotiate for a better price,” Mollyann Brodie, executive director of public opinion and survey research at Kaiser Family Foundation, told Reuters.
Efforts to allow Medicare to negotiate drug prices have not been successful because, of course, of pharmaceutical industry opposition and because of ideological opposition to government interference in the marketplace despite the seeming contradiction seen in the government’s right to negotiate drug prices for vets.
Drug makers say their prices reflect the billions of dollars they spend in research and development, for approved treatments and the new drugs that fail. But critics charge that too much of the money is spent on marketing.
America’s Health Insurance Plans, an industry lobby group, may bring increase pressure on drugmakers now that AHIP has named Marilyn Tavenner, the former head of the Centers for Medicare and Medicaid Services, as chief executive.