Because of the
importance of insurance in the treatment of people suffering from eating
disorders and the inherent complexities existing within the insurance business,
this topic will be addressed in two parts. The first part deals with how
insurance companies operate and make a profit and the manner in which they make
evaluate their insured's claims. The second part deals with the manner in which
the insurance industry's practices impact eating disorder patients and their
families and recommendations on how to improve the system.
Part One
Many people believe
that the purpose of insurance companies is to help us, to be there for us in
times of a health crisis. That is a sweet and romantic notion which
belongs in the same category as unicorns and leprechauns standing under a
rainbow.
Insurance companies
exist for one reason alone… to make a profit! It starts with making a profit. It ends with making a
profit. If the insurance company is not in business to make a profit it
is not going to remain in business very long. And no one should have an
issue with this. That is the very essence of capitalism. You
provide a valuable service in consideration for being paid what the market is
willing to pay you.
In theory, the
profitability of insurance companies is based on a simple formula. Their
business model is to collect more in premiums and investment income than is
paid out in claims, costs and underwriting expenses. On the surface,
that is it.
Premiums +
Investment Income > Claims + Expenses = PROFIT
This business model
is reflected in the seemingly simple transaction with its insured. The
insured assumes a guaranteed and relatively small loss in the form of a premium
that is paid to the insurer in exchange for the insurer’s promise to compensate
or indemnify its insured in the case of a financial or personal loss. The
insured is supposed to receive a contract, the insurance policy, which sets
forth the terms and conditions of his/her agreement and details the
circumstances under which benefits will be paid to us or medical providers when
we need to utilize the very services for which we are paying. That
relationship between insured and insurance company is supposed to be so close,
so sacred, that every states imposes a duty upon the insurance company to act
in good faith toward its insured.
And yet, name any
other business that dedicates a significant amount of its own resources to a
department whose sole job it is to investigate, question and then deny the very
reasons for its existence. Name the only business which routinely
employs attorneys whose sole job is to look for exclusions and exceptions to
payment so that that business does not have to follow through with what its
mission statement requires it to do. Name the only business which
employs “independent” doctors to review medical records for the sole purpose of
providing that business with a reason to not follow through with its mission
statement.
With regard to the
substance of your insurance policy, the argument made by the insurance industry
and its powerful lobbyists is, “If you don’t like the terms and conditions of
your contract, find another insurance provider or renegotiate the terms of your
contract.” Just for grins, in June of 2017, I telephoned five of the
largest health insurance providers in the United States. After
speaking with their representative (each of whom was courteous and polite), I
asked “the” question … “If I do not agree to the terms and conditions of all of
the exclusions or the manner in which a certain ailment is treated, would your
company be amenable to negotiating that clause with me.” Naturally,
all five quickly said no. Only one had the temerity to laugh a little bit
before saying no. I certainly understood the humor in the question
though.
Claims are denied. The
appeal process drags on. Sometimes, litigation is instituted for the sole
purpose of having a judge order the insurance company to comply with its
contract. In the meantime, months, and sometimes years elapse. And
the insured is expected to wait for potentially life saving treatment as a
disease continues to ravage them. All the while, we desperately tell
the Demon to wait and not continue with its rampage of killing while the
process slowly grinds the grist for the mill.
Naturally, there
are other insurance issues to overcome as well. First, with the
exception of the State of Missouri, there are no state laws specifically
pertaining to eating disorders. There are federal “parity”
laws and some states, including Texas, have passed state laws which require
insurance companies to treat mental health claims on an equal basis with
medical and surgical claims. And so, you may be thinking, “Well that
gets you there. Eating Disorders are recognized as biologically
based mental illnesses and are clearly covered.” And if you were
thinking that ... you would be wrong.
Except in the State
of Missouri, insurance companies have the legal right to completely exclude
treatment of eating disorders even if their insurance contract covers all other
mental illnesses. When the group insurance policy comes up for
renewal with the employer, the insurance company simply excludes eating
disorders as covered under the policy. And if you are thinking that this
circumstance can't possibly happen ...
Morgan’s mother is
working at one of the 25 largest banks in the United States. This
bank has a group health insurance plan with a company named, for discretion’s
sake, Azure Cross Azure Shield, or ACAS for short. ACAS
reviews the amount of money it had paid for eating disorder treatment, it
reviews its group health insurance plan with the bank, it reviews Morgan’s
medical records and then, unilaterally makes the decision to exclude all eating
disorder treatment as of January 1, 2015. ACAS tells the bank if
they don’t like it, they can go pound sand and to go find insurance for its
employees elsewhere. The bank’s employees have no voice. The
bank of course, acquiesces not knowing that in agreeing, they have signed a
death warrant for those employees and their loved ones who are suffering from
eating disorders. But, on a good note, at least the profit margin
for ACAS will rebound nicely! And if the price to pay for that
rebounding profit margin is the life of a few individuals, well, the needs of
the many, or in this case, the profit margin for ACAS is much more important
than the needs or the lives of a few individuals. After all, you can’t
make an omelette without breaking a few eggs.
So, even if you
have insurance in place, let’s take a look at how eating disorder claims are
routinely handled by the insurance industry.
With regard to paying
claims, Mary Beth Senkewicz, a former senior executive at the National
Association of Insurance Commissioners stated: “The bottom line is that
insurance companies make money when they don’t pay claims… They’ll do anything
to avoid paying, because if they wait long enough, they know the policyholders
will die.” Betty Hobel, a former agent for long term care insurer
Conseco testified in a proceeding, “[The insurance company] made it so hard to
make a claim that people either died or gave up.” Los Angeles
Superior Court judge, Sam Cianchetti, who was the arbiter in a case in which
the health insurer, Health Net was involved, characterized Health Net’s conduct
as egregious and stated that Health Net, “was primarily concerned with and
considered its own financial interests and gave little, if any, consideration
and concern for the interests of its insureds.”
In 2007, the
California Department of Managed Health Care fined Anthem Blue Cross $1 million
after an investigation revealed that the insurer routinely cancelled individual
health policies of pregnant women and chronically ill patients. As
part of that investigation, regulators randomly selected 90 cases where the
insurer had dropped the policyholder. In every single case,
investigators found the insurer had violated state law.
Those examples are
but a few samples of a much more expansive body of work.
With regard to
claims involving eating disorders, the mutual needs of the general public and
the insurance industry would be well served by the insurance industry
incorporating the guidelines of the American Psychiatric Association (“APA”)
into their policies. The APA was founded in 1844 and is the main professional
organization of psychiatrists and trainee psychiatrists in the United States. It
is the largest psychiatric organization in the world. It has
approximately 36,000 members and publishes the very well-respected Diagnostic
and Statistical Manual of Mental Disorders (“DSM”). The DSM codifies
psychiatric conditions and is used worldwide as a guide for diagnosing
disorders. The APA and its members have played major roles in
examining and providing solutions to points of contention in the field and
addressing uncertainties as to the nature of psychiatric illnesses and their
treatment.
In 2006, after
conducting an extensive study, the APA published its Practice Guideline for the
Treatment of Patients with Eating Disorders, 3rd Edition. In
2012, the APA issued its Guideline Watch and found the 2006 Guidelines to be
substantially correct and current in its recommendations. The 2006
Guideline is 128 pages in length and along with the criteria set forth in the
DSM V, these publications should act as the bible for the treatment of eating
disorders. The guidelines are objective and are based upon the
expertise of many psychiatrists with combined hundreds of years of experience
treating eating disorders. The guidelines include the use of pharmacological
resources for the treatment of eating disorders. All ethical and
competent medical practitioners who treat eating disorders routinely refer to
the guidelines and the DSM.
And yet, the
insurance industry is free to ignore these guidelines within their insurance
contracts and not apply those guidelines when it reviews requests for payment
of treatment for eating disorders or to terminate payment for treatment. Again
… the insurance industry can disregard the APA’s guidelines when it makes
treatment decisions for eating disorders.
In evaluating a
claim, the insurance company ostensibly takes the insured’s medical records, it
reviews the treating doctor’s diagnosis, prognosis and recommendation for
treatment and then determines whether the specific conditions comply with those
insurable conditions which are included within the insurance policy. Claims
are then pre-approved (for residential treatment or in-patient treatment in
hospitals).
Doctors and
hospitals then transmit medical records and costs to the insurance company as
treatment is started and received. They then start negotiating regarding
how long the patient must remain at that particular level of care and how quickly
the insured can be released from the current level to a lower level of care. [Again,
this ignores the many statistics indicating that eating disorders ravage its
victims for years]. It is significant to note that the "independent"
doctor paid by the insurance company is not using the insured's medical
information and comparing it with the generally recognized standards in the
industry. They always have an eye on what they were told about what the
insurance policy says.
And if the insured
patient is 18 years of age or over, they must be told that insurance is in the
process of or wanting to drop the patient to a lower level of care. Presume
that a patient is finally making progress at their treatment center. They
begin to see a light and hope's candle starts to flicker a little more
brightly. Then, they are told that as soon as the next day, the costs of
their care at that level or in that facility will not be paid by the insurer
and arrangements need to be made for either self-pay starting the next day or
they will be in a shuttle to the airport. That is comparable to throwing
a life-preserver filled with holes to a drowning person.
And all the while,
the Demon is laughing knowing that it has a greater chance to claim another
victim.
(end of
Part One)
