From Forbes Magazine

Medical Insurance
HMO Implant Nightmare: Batteries Not Included
David Whelan, 11.23.09, 5:00 PM ET

If John Grisham were looking to write about health care reform he might be inspired by a recent federal lawsuit filed in Mississippi against the local Blue Cross & Blue Shield and the Electric Power Association's benefits plan.

The lawsuit provides a window into the chaos created by America's piecemeal insurance market. Workers face an ever-shifting array of health benefits that change each year at open enrollment time as employers shop around for better deals. What's covered in 2008 suddenly may not be in 2009.

Plaintiff Paige Riley, 42, is an extreme example of what can happen as a result. She alleges that Blue Cross & Blue Shield of Mississippi refused to cover an operation to replace the batteries of a stomach-pain device she had surgically implanted in 2005. As a result, Riley had to fork over the $43,364.27 cost in cash.

Riley suffers from gastroparesis, a nasty condition in which the stomach cannot empty itself, causing nausea, vomiting and pain. According to the lawsuit, in 2005 she got a new device from Medtronic implanted in her stomach that uses mild electric pulses help relieve symptoms. Called the Enterra, it was approved in 2000 under the FDA's humanitarian device exemption, which is for devices that target a very narrow group of patients.

Her husband's employer, Electric Power Association, covered the first operation and a second operation to put in new batteries in 2007. But by the time Riley needed a third operation to get another set of batteries this spring, Blue Cross & Blue Shield of Mississippi was the plan administrator for the Power Association. It ruled that the Enterra was experimental and refused to cover the new batteries, the lawsuit says. Appeals were denied, according to the lawsuit filed in federal district court in Jackson, Mississippi on Nov. 10.

In looking for help on the Internet, Riley met a Connecticut patient advocate named Jennifer Jaff, who also suffers from gastroparesis. "It's too late for it to be experimental," says Jaff, who connected Riley with her lawyer in Mississippi, Grady "Mac" McCool.

"It's really a straight claim for benefits," says McCool. The lawsuit asks for $43,364.27, the list price that the hospital charged her for the battery replacement, and additional money for pain and suffering and lost income. Representatives for Blue Cross & Blue Shield of Mississippi and the Electric Power Association of Mississippi Group Benefits Trust said that they had not yet been served with the lawsuit and had no comment on it.

Medtronic said that insurers have sometimes refused to cover Enterra before, but usually not after it's been implanted. "Insurers typically handle coverage decisions on a case-by-case basis," says Cindy Resman, a spokeswoman for Medtronic (which is not a involved in the lawsuit). "There are instances where insurance companies have misinterpreted an HDE-approved product as an investigational device," she adds. "However, per the FDA definition, it is approved based on evidence of safety and probable benefit."

Though not to be a blockbuster from a financial standpoint, the lawsuit has relevance to the current debate in Washington. Supporters of reform have tried to make the legislation into a vote of confidence on HMOs, which suffer from the perception that they deny lifesaving care to save money.

However, the legislation being debated also includes the foundations of a new system for limiting coverage of expensive care using evidence-based medicine. As with the debate over mammograms last week, hard questions might be raised about how much to cover new, expensive therapies like Enterra.

"This shows that with health reform it will be important that those who are insured still have strong appeal rights," says Jaff, the patient advocate. She says she'd rather have to appeal to a government agency in Washington than to sue private insurers in federal court.

The Mississippi writer Grisham wrote about denial of care in his 1995 book The Rainmaker. It describes a young man named Donny Ray who has leukemia but is denied a lifesaving bone marrow transplant by a fictional HMO called Great Benefit. The protagonist lawyer successfully sues Great Benefit on behalf of the deceased's family. With health reform looming, will such plotlines continue to have resonance?

David Whelan can be reached at dwhelan@forbes.com.

Senator Reid Releases Bill

At over 2000 pages, Senator Reid gets the prize for volume. He may also get the prize for quality.

I've read all of the portions of the Bill that directly affect patients (skimming sections on things like data collection and health care workforce development), and I'm impressed by how good a job Senator Reid seems to have done at synthesizing the Senate HELP Committee and Senate Finance Committee Bills, while also anticipating some of the differences between the Senate and the House versions.

As is true of all the plans, Senator Reid's would eliminate pre-existing condition exclusions, cancellations of policies based on health status, lifetime maximums, or premium rating based on health history or gender. Also as in all of the other plans, an insurance "exchange" will be established where you can shop for insurance, see the available alternatives, and weigh your options. Among the options is a public option -- a plan run by the government that will be available as an alternative to private insurance if the patient chooses -- that will allow states to opt-out if they wish. In addition, the Bill would allow the creation of nonprofit co-ops. Further, states can create a program for low income individuals not eligible for Medicaid, and Medicaid is expanded to include anybody with income up to 133% of the federal poverty level. Multi-state compacts are permitted, along with nationwide plans with state opt-outs.

While most of the changes will be effective in 2014 (one year later than the House plan), immediately, there will be a national high risk pool for people with pre-existing conditions who have gone without insurance for at least 6 months.

There are limits on out-of-pocket costs -- deductibles are limited to $2000 for an individual and $4000 for families. Other cost sharing -- copays and coinsurance -- are limited to the same limits as apply to health savings accounts -- right now, according to the IRS website, $5600 for an individual and $11,2000 for a family. These out of pocket limits are decreased on a sliding scale for people with incomes below 400% of the federal poverty level. There are tax credits that are calculated based on a formula that, frankly, is so complicated that I can't tell you what it means, but it is tied to (1) the cost of plans in the Exchange; and (2) household income. People with incomes up to 400 percent of federal poverty level would be eligible for a tax credit. Premiums are capped at 9.8 percent of income.

Individuals would be required to have insurance, but the penalty for not doing so is very small, starting at $95 per year, and increasing over time to $750. There is no requirement that employers provide insurance, but employers with 50 or more employees will have to pay a fee of $750 for each employee who is not covered who receives a tax credit. There also is a small employer tax credit for employers with 25 or fewer employees.

Medicare improvements include a reduction of the "doughnut hole" by $500 and 50% discounts on name brand drugs for low and middle-income consumers. Rates paid to Medicare Advantage Plans are decreased to match what the government pays for the same coverage.

In addition, there is a mandatory appeal process, including both internal and external appeals, applicable to all plans included in the Exchange, and there will be a uniform appeals process for Medicare Part D plans.

To pay for the plan, there will be a series of taxes. First, so-called Cadillac plans -- plans that cost more than $8500 for an individual and $23,000 for a family -- are taxed at 40%. Further, the Medicare tax will increase from 1.45% to 1.94% for people with income over $250,000. In addition, there are the penalties mentioned above for failing to obtain insurance, and for employers who don't cover employees who get tax credits. In addition, there is a 5% tax on elective cosmetic procedures -- procedures necessary to correct congenital deformities and so on are not subject to tax. in addition, every health insurance policy and every health insurance plan, including self-funded plans, will pay $2 per covered person.

Those are the highlights. It's very similar to the House bill in many respects, although the House has a so-called millionaires tax, larger penalties for individuals who don't buy insurance, and larger penalties on businesses who don't provide insurance.

There are, of course, some sticky issues remaining. Rather than prohibiting all plans in the exchange from covering abortions, even with the woman's own money, the Senate version segregates the federal money from private money and allows insurers to cover abortions as long as the woman's own money is used. Illegal immigrants are not covered at all.

That's the summary. Of course, you are welcome to read the whole thing here. There's also an excellent comparison of the House and Senate versions by the NY Times here.

Please note that I will be taking a short break from blogging. I'm having a small hernia repair tomorrow. It's not a big deal, but I'll be out of commission for as long as I'm on pain meds and could say something stupid!!! Take care of yourselves in the meantime. Jennifer

New Lies

With what appears to be an unbridled willingness to invent doomsday scenarios about health insurance reform, some conservatives have sunk to a new low, arguing that people can be sent to jail for up to five years if they don't buy insurance. True, there's a penalty if an individual doesn't buy insurance. True, the penalty MIGHT be treated as a tax. True, failure to pay taxes can be treated as a criminal violation. True, that violation could hold up to a five year jail sentence. But come on, people -- when was the last time anybody was prosecuted for failing to pay $750 in taxes? How about never?

Just more scare tactics from those who want to stop health insurance reform. Jennifer

Vote for Advocacy for Patients

If we win this, we can hire a second lawyer and help twice as many people. PLEASE vote today! Thanks. Jennifer

My Friend Jesse's New Film

Famed director Jesse Dylan does it again in a video about a quality improvement project that is changing the face of treatment of pediatric inflammatory bowel disease. Watch. Jennifer

Nobody is Immune

I spend much of my time fighting with insurance companies on behalf of other people. I'm pretty good at it. But nothing I know about fighting with insurance companies makes it any easier for me to fight the fight myself.

I have gastroparesis. My gastric emptying test shows 0% emptying after 90 minutes. What goes in just sits in my stomach for hours and hours. Without two medications -- Reglan and Protonix -- I either don't eat at all, or I vomit. A lot.

My insurance company, Anthem Blue Cross Blue Shield of Connecticut, doesn't want to pay for Protonix. For my $1000 per month premium, they want me to take Prilosec, Prevacid or Nexium instead. Anthem gets a better price on those meds. So once a year, they require that my doctor prove to them that I really, really need Protonix.

Last month, I filled my prescription. The label on the bottle said I had 2 refills left, so I didn't give it another thought. This week, I went to refill my prescription and it was denied. I need prior authorization for Protonix.

It's not like we didn't go through this a year ago. And it's not like anything has changed since then. But they make me jump through these hoops anyway.

I've tried all of the other meds. In fact, if Anthem would check its own records, it would see that it paid for them!!! If I proved to them a year ago that I've already tried those meds, then I've still already tried those meds this year. History doesn't change.

Next, Anthem wants to know why I need two Protonix a day rather than the usual one. A year ago or so, we tried to decrease the Protonix because it might also cause diarrhea, which is a problem due to my Crohn's disease. I immediately started vomiting. We told Anthem that a year ago. They want to hear it again.

Insurance companies won't let you have more than a 30 day supply of meds, so when it's time for a refill, it means I've just about run out of my meds. And I'm traveling this week-end, so not only am I going to run out, but I am going to run out far from home. Apparently, Anthem would rather that I end up in an emergency room hundreds of miles from home than give me enough medication to get me through the week-end, while they take their time processing a request for prior authorization that says NOTHING different than the one they approved a year ago.

Patients come to me expecting me to be able to fix this insanity. After all, I read all the time that one of the biggest problems with controlling the cost of chronic illness is that patients are non-compliant with medication regimens. I'm not non-compliant. I'm trying to take my meds; my insurance company apparently WANTS me to miss my meds for several days between the time I run out and they time they get around to reviewing my request for prior authorization. By then, I will be vomiting. By then, my illness will be out of control. I'm not non-compliant; my insurance company is.

And the worst of it is that I have absolutely no power here. None. I have good contacts at Anthem -- their lawyer, the head of their appeals unit. I have a friend at the Attorney General's Office who does health insurance work for consumers. I have all of the medical information and completely, totally understand what's going on here. And none of that does me a bit of good. Because I still don't have my medicine. I'm still going to get sick.

I know the rules, so I play by them. But why didn't Anthem tell me last month that I would need prior authorization this month so it could have been done in time? Why won't Anthem give me enough medication to get through the week-end when they know full well that I'm going to run out of meds and get sick? There is NOTHING I could have done differently, NOTHING my doctor could have done differently, that would have avoided this.

And nothing in health insurance reform is going to fix this sort of thing. Congress isn't even trying to address issues like this one. Indeed, our NIH study is showing that these sorts of coverage issues are the biggest problems people are having with insurance. Even when you have insurance, you pay your premiums, you do everything right, insurers can pull the rug out from under you whenever they like. And it's legal.

In the end, if I land in an emergency room because I'm vomiting a lot and can't keep anything in me, it costs Anthem more money than it would have cost them for my medicine. But saying that assumes the system is rational. And it's absolutely not. Jennifer

P.S. -- I GOT IT. It took relentless badgering of the insurance company, but they finally agreed to expedite the review and then they granted the authorization. It took about 2 hours yesterday and 2 hours today on the phone to make it happen. Had I not been going out of town, this definitely would have carried over to next week. Lesson: don't ever take no for an answer! J

How Can This Not Move YOU?

Representative Debbie Halvorson of Illinois explains her vote in favor of health reform.