Madigan backs suit against Advocate - Chicago Sun-Times

Illinois Attorney General Lisa Madigan threw her support behind alawsuit filed against Advocate Health Care over how it charges theuninsured.

She filed an amicus brief last week asking the Circuit Court ofCook County not to dismiss the complaint. The suit accuses Advocateof overcharging the uninsured and seeks to force Advocate to halt thepractice and stop pursuing collections against such patients.

People lacking insurance typically get charged higher prices forservices at hospitals here and across the country. While insurancecompanies and third-party payers such as Medicare and Medicaid usetheir clout to negotiate big discounts off the gross, or 'sticker,'price for such services, the uninsured lack such discounts and arecharged the sticker price. Hospitals have drawn criticism across thecountry because of the practice, and it has led to other lawsuits.

But Advocate and other hospitals have maintained that federalMedicare law governs how they bill the uninsured.

Madigan disputed that argument in her brief. She cited a letterfrom U.S. Health and Human Services Secretary Tommy G. Thompson,written to the American Hospital Association earlier this year, whichreferenced a letter from the Chicago-based association on the issue.

Thompson's letter said, 'Your letter suggests that HHS regulationsrequire hospitals to bill all patients using the same schedule ofcharges, and suggests that as a result, the uninsured are forced topay full price for their care. That suggestion is not correct, anddoes not accurately reflect my policy. ... Hospitals can providediscounts to uninsured and underinsured patients who cannot affordtheir hospital bills and to Medicare beneficiaries who cannot affordtheir Medicare cost-sharing obligations. Nothing in the Medicareprogram rules or regulations prohibit such discounts.'

The agency has maintained that this position represents no policychange, Madigan notes in the brief.

'Discriminatory pricing policies that make health care vastly moreexpensive for low-income uninsured residents of Illinois violates thestate's public policy of improving access to health care among lowincome residents,' Madigan said. '...The allegations raised inplaintiffs' complaint, if true, would violate Illinois publicpolicy.'

Advocate spokesman Edward C. Domansky maintained that federalrules still play a role in how the uninsured are billed.

'There are provisions that talk about proof of indigence andmaking applications for charity care,' he said. 'The federalregulations still basically serve as a starting point for allnegotiations, whether with the uninsured, the government or healthinsurers. The uniform charge structure is still the requirement.Discounts can be offered once proof of indigence is determined.'

He also contended that one of the key roadblocks to offeringdiscounts and charity care to the uninsured is lack of patientcooperation.

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Data released by Assurant Health reveals strong interest in newhealth savings accounts.

The health insurance provider, which covers more than 1 millionpeople nationally, said that in the first five months since offeringHSAs, it has received more than 56,000 applications from interestedconsumers, and 43 percent of the people did not indicate any priorhealth insurance coverage, Assurant said.

Milwaukee-based Assurant shared the data at a briefing in Chicagolast month with the Illinois Chamber of Commerce, the Illinoischapter of the National Federation of Independent Business and U.S.House Speaker J. Dennis Hastert. He sponsored the HSA legislation.

The accounts debuted this year in the Medicare reform law. Theaccounts are funded with contributions from consumers and employers,and provide high-deductible health plans for individuals andfamilies. That includes plans with at least a $1,000 annualdeductible per individual or a $2,000 annual deductible per family.The advantages of the plans are that individuals or their employerscan fund the accounts with pre-tax dollars and accumulate nontaxableearnings. Unused funds can be rolled over every year, and the moneyused to pay for medical expenses, also tax-free.

Additionally, by putting much of the responsibility for buyinghealth care in the hands of HSA owners, the thinking is thatconsumers will be more likely to shop for lower-priced care.

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Lake Forest-based TAP Pharmaceutical Products Inc. won approvalfrom U.S. regulators last week to market its Prevacid drug for use bychildren ages 12 to 17 for two conditions.

ATTORNEY GENERAL BLUMENTHAL SAYS COURT RULING CONFIRMS SUSPICIONS OF ABUSIVE, PERVASIVE INSURANCE COVERAGE DENIALS - US Fed News Service, Including US State News

The Connecticut Attorney General issued the following news release:

Attorney General Richard Blumenthal today announced that a South Carolina court ruling this week alarmingly substantiates concerns here about Assurant Health Insurance's potentially abusive insurance coverage denials in cases of catastrophic illness.

Blumenthal said the state Department of Insurance (DOI) must act now to complete its long delayed audit involving Assurant's coverage denial practices so that his office can take immediate action to protect patients here.

The DOI claimed it would release an audit last month - but has failed to do so - involving Assurant Health Insurance's (a.k.a. Fortis and John Alden Company) retroactive or 'look-back procedures used to bar coverage on the basis that patients conditions pre-existed policy onset dates.

In the case of Mitchell v. Fortis Insurance Company, a South Carolina court found that Fortis pre-programmed its computer to recognize billing codes for expensive health conditions, triggering an automatic fraud investigation. The court awarded $15 million to the plaintiff, who was improperly denied coverage by Fortis for his AIDS treatment.

'This case confirms our worst suspicions - that Assurant calculatingly denies coverage for catastrophic illnesses,' Blumenthal said. 'Assurant promised benefits, but abandons them when they face cancer and other devastating diseases. Our Insurance Department must act now to issue the audit that it promised six months ago. This audit is vital to take legal action protecting Connecticut consumers denied vital promised health benefits.

'I am deeply disturbed by several reports of consumers - people suffering from debilitating diseases - who were questionably denied coverage. I have tirelessly urged our legislature to strengthen the law protecting patients from abusive and arbitrary denial of promised health benefits. In the meantime, my office is prepared to take any action necessary to enforce the law.'

Blumenthal said the highly focused audit - which he requested six months ago - could have been done quickly because only limited information about the company's short-term policies is needed for the review.

The audit is vital for Blumenthal's office to take legal action to stop potentially illegal or improper denial of health benefits. Several patients have complained after Assurant questionably denied coverage for life-saving treatments promised under short-term health plans.

Blumenthal said the audit should inventory all of Assurant's denials under its short-term policies on the basis of findings of pre-existing conditions. Those denials should then be cross checked with a categorical claims review of the particular conditions that were determined to be pre-existing.

The audit would allow state investigators to confirm whether Assurant provides meaningful coverage for diseases such as cancer with any level of consistency under its short-term health insurance policies.

Complaints to Blumenthal's office - and now the South Carolina decision -indicate a pattern of arbitrary or abusive coverage denial:

A 34-year-old woman was diagnosed with Hodgkin's Lymphoma one month after her enrollment in a six-month policy underwritten by Fortis Health Insurance. During a post-enrollment diagnostic visit, the woman recalled experiencing mild shortness of breath while exercising some six months prior to her doctor's visit. Fortis, in seeking to deny coverage, concluded that the shortness of breath she recalled during a single workout six months prior to enrollment constituted a pre-existing condition because the symptom should have caused her to seek medical treatment prior to enrollment.

ATTORNEY GENERAL BLUMENTHAL CLAIMS INSURER IMPROPERLY DENYING COVERAGE - US Fed News Service, Including US State News

The Connecticut Attorney General issued the following news release:

Attorney General Richard Blumenthal said his office has received several reports of insurance companies denying coverage based on questionable conclusions that patients' medical conditions pre-existed their insurance policies.

Blumenthal urged that the Department of Insurance (DOI) finalize and release an audit that he requested Acting Commissioner Susan Cogswell to launch more than four months ago.

The audit, which is vital for Blumenthal and the General Assembly to take enforcement and legislative action to stop potentially illegal or improper denial of vital health insurance coverage, has yet to be released.

Complaints to Blumenthal's office involve Assurant Health Insurance's (a.k.a. Fortis and John Alden Company) retroactive or 'look-back' procedures used to bar coverage on the basis that patients' conditions pre-existed policy onset dates.

'Compromising coverage of catastrophic illnesses is unconscionable and unacceptable,' Blumenthal said. 'The Insurance Department cannot delay this audit any longer - now more than four months old. Its results are vital to coverage for life-saving medical treatment.

'Improper use of so called preexisting conditions should be barred and banished. My office will continue to fight for stronger legislative protections against these practices.'

Blumenthal described two of more than a dozen cases under review by his Health Care Advocacy Unit:

* A 34-year-old woman was diagnosed with Hodgkin's Lymphoma one month after her enrollment in a six-month policy underwritten by Fortis Health Insurance. During a post-enrollment diagnostic visit, the woman recalled experiencing mild shortness of breath while exercising some six months prior to her doctor's visit. Fortis, in seeking to deny coverage, concluded that the shortness of breath she recalled during a single workout six months prior to enrollment constituted a pre-existing condition because the symptom should have caused her to seek medical treatment prior to enrollment.

Health insurer taken to task for improperly handling medical claims. - The Day (New London, CT)

Byline: Patricia Daddona

Mar. 30--Customers of an insurance company that denied claims by blaming pre-existing health conditions will get restitution, the state's insurance commissioner announced Thursday.

Commissioner Susan Cogswell also said Thursday that her department will continue investigating Assurant Inc.'s practices, which she said might be 'just the tip of the iceberg' for the company's customers.

The firm, based in Milwaukee, issues health insurance policies through subsidiaries Time (formerly Fortis), Union Security and John Alden Life insurance companies.

'We just did a small sampling of policies, and based on that we believe there are other policy holders that have claims that have been unjustly denied,' said Cogswell.

A health problem that existed before the patient obtained an insurance policy -- a pre-existing condition -- can mean that the new policy might not cover costs of treating the condition.

According to Mark Franklin, director of the department's consumer services' division, the department closely reviewed 547 of the companies' 1,279 cases. It then randomly selected 39 cases representing $220,000 in reversed claim denials and more than $57,000 in interest.

Franklin found that most of the claims he reviewed involved language about pre-existing conditions 'that were incorrectly applied or delayed.' In some cases, a company would tell the policyholder it was denying a claim it had not yet investigated, he stated in a department memo.

Some catastrophic illnesses resulted in recovered claims totaling tens of thousands of dollars, and one totaled $93,049, plus $29,323 in interest.

In one case, a patient's claim was denied four years ago based on an incorrect conclusion that a pre-existing condition prevented coverage, Franklin states. The reversed decision resulted in a payout of $1,122 and $42.17 in interest.

In another case, a policyholder was denied a claim for treatment for chondromalacia, also known as water on the knee, and joint pain in the lower leg. Three months later, the firm admitted that medical records about whether the condition was pre-existing were unclear. It paid out more than $5,000, plus $63 in interest.

Cogswell's settlement requires the insurance companies to:

--Repay policy holders, with interest, who had claims wrongfully denied based on an alleged pre-existing condition;

--Submit to a compliance audit for 2001 through 2007;

--Use more medical personnel in reviews of claims early and clarify record-keeping

--Educate customers about how to appeal denials.

As part of the agreement, the company admits no wrongdoing, and the department reserves the right to pursue other issues.

Attorney General Richard Blumenthal, whose office also received complaints, said the insurance department should have produced an audit and imposed penalties on the company.

'Assurant added insult to illness, compounding consumers' struggles with grave illnesses, cancer and other devastating diseases, with fears of losing their homes and possessions to pay for life-saving treatment that Assurant promised, but failed to pay,' he stated.

However, Cogswell said, 'it would be premature to determine the fine until we know how serious the problem is. My primary aim is to make sure that the policyholders that have unjustly denied claims get restitution with interest.'

Assurant spokesman Rob Guilbert said the company serves 1.3 million people in 43 states and last year paid more than $1.3 billion in claims nationwide. The firm 'agrees with' the insurance department's stipulations and regularly cooperates in market conduct reviews, he said. The firm has been in business since 1892.

'We're glad to be working with them on this,' Guilbert said. 'We've signed this agreement and we do work very hard to make sure our claims process is fair and equitable and consistent with state laws and industry standards. And we're always striving to improve that process.'

To see more of The Day, or to subscribe to the newspaper, go to http://www.theday.com.

Copyright (c) 2007, The Day, New London, Conn.

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