Health Insurance Advocacy Terms
What does 'managed care' mean?
Managed care has come to have many different definitions. And again not being an advocate of managed care, what we see it as is a new person between the doctor and the patient, someone who is interfering with the relationship. That person never enters into the room, that person does not have a medical degree, but that person is basically trained as an MBA. So you have an MBA interfering between the MD and the patient who needs care. That MBA is going to say, you know what, there's a cheaper way, there's a more cost effective way, and sometimes that's okay. But in many instances you want your medical professional, you want your doctor to determine your care. You do not want someone from Wall Street who's not trained medically to tell you, you don't need care. Managed care MBAs work for these large Fortune 500 companies that have quarterly profit reports that they must make to their shareholders. They and their doctors often are beholding to shareholders, not to the patient who needs the care. And that's where things can get out of balance in many occasions because remember, while you're well and you're paying your premiums, you're a wonderful thing for the health insurance company. But the reason you have health insurance and the reason you purchase it, is for peace of mind. And to get your doctor paid, and to get the best doctor paid when you are ill. So, when you come in with an illness, you are a conflict for that company that wants profits. They don't want to give care.
What is an 'HMO'?
A HMO is a health maintenance organization. The concept started in 1974 with some legislature that the Nixon administration allowed to come into play to basically allow the doctors to be prepaid and to force doctors to take some risk on your care. So that it turned, in many ways the healthcare provider into a risk share. So that if you need a lot of care that money is going to come out of the same budget for the doctor versus going back and being part of the insurance companies responsibility. So, in many situations the doctors became little insurance companies trying to limit the care of their own patients if they're ever going to have a chance at making a reasonable living.
What is a 'PPO'?
PPO is a Preferred Provider Organization and that is a group of doctors that if you go to the set group that have a contract with your insurance company, you get a better discount. You have more freedom with a PPO than an HMO, but it costs you more if you go outside of that group of chosen doctors who have a reduced fee contract with your health insurance company.
What is 'ERISA'?
"ERISA" is the Employee Retirement Insurance Savings Act of 1974. Bottom line, it was designed to regulate pension companies, and force a person who lost their pension to be able to sue only for the dollar value of their pension. The unfortunate thing is that we gave the law unintended consequences, so that in the '80s the health insurance companies said "hey we are a benefit too." So if there is a dispute between the insurance company and the patient, the patient should only be able to sue for the treatment denied. So how that plays out is, if you're denied a heart surgery, and you are the bread-earner in your family, and your family looses you and looses your income, they can only sue for the $20,000 surgery that was denied you, not for your lost wages, not for the loss that your children no longer have you. That again became a moat around the insurance company castle, that protects them all the time to the detriment of the insurer. It is also a license to steal from the insurer who's sick, who needs care, because there is no way to hold them accountable.
How do insurance companies attempt to justify ERISA?
It was originally designed to protect pension plans as an employee benefit. All the insurance companies said, "Hey, we're on employee benefit so you should protect us". If we deny you a $100-dollar procedure for breast cancer evaluation, and you don't get it on your own, and that could have saved your life, or we can prove that it would have saved your life, your lost earnings don't matter anymore. So, the value of a human is devalued by ERISA. An insurance company's ability to lie is enhanced. It's a license to steal.
What is 'capitation'?
Capitation goes back to the idea of capitates and the head. So per head, it is an amount that the doctor receives. As we've discussed as a little insurance company, he gets thirty dollars a month for you from the insurance company and that's all he gets. If you're sick, he still gets thirty. If you need referrals to specialists, he still gets thirty dollars. What we have exposed in several cases is that capitation is a clear conflict of interests, because you as the patient don't know that and the doctor can't tell you in many of the insurance contracts. Therefore, because of that, you're at risk every time you walk into the doctor's office because you do not have the information he has and there may be an incentive to deny you care, or to deny you a specialty consult, or to deny you an X-ray that may come out of the doctor's pocket when it really should be out of the insurance company's money.
Why can't my doctor talk to me about capitation?
In many contracts that the doctors have with the health insurance company, the health insurance company doesn't want the doctor to tell you the patient, their consumer, how the contract works. Because again, an informed consumer is going to say, "Doctor, am I'm not getting this referral simply because I have a bad HMO that capitates you and pays you such a small amount, or do you really don't think I need this treatment?" So originally, a lot of the contracts did not allow the doctors to even tell the patient how they were paid. And capitation is another means of putting someone in between the doctor and the patient, a finance mechanism, so that when you walk into the doctor's office you're an economic detriment to that doctor. The doctor loses once you show up. If you stay away, you're a good patient.
What is 'mandatory arbitration'?
In most health insurance contracts, they now want to force you into an arbitration and take away your sixth amendment right to a jury trial. That is, for the obvious reasons, that they feel that as a large corporate entity they will do much better in a board room with one of their own people serving as an arbiter than with a jury where, basically, the average person and a large corporation are on equal footing.
What is 'bad faith'?
In California and in many states, we have a concept called the "Duty of Good Faith and Fair Dealing," because you and I can't negotiate our insurance contracts like we would negotiate other things. The insurance company gives us a piece of paper and we have to accept whatever they have. In that piece of paper is implied a covenant, and an agreement of good faith, which states that they have to look at this and deal fairly on the agreement, because it's your life. It is not just some service of fixing your plumbing. In that concept is the whole idea of bad faith. If an insurance company does not deal in good faith in interpreting their contract for you, when you're ill, or when you're dying, they have, in some cases, in isolated circumstances, the ability to be sued for bad faith. Because those people have that ability to sue an insurance company for bad faith, usually the insurance company is forced to be on a heightened standard of alert and pay for things that they should. Where people do not have the ability to sue for bad faith, you have more denials; you have more care being saved at the cost of, at the detriment of the individual who is ill.
What is 'denial of care'?
Denial of care happens in an instance where you go to your doctor and you need a referral to a specialist and he says no, or you need a lung transplant or a bone marrow transplant, or you need a garden variety surgery and your managed care organization, your company that you've never seen, and the people you've never seen, deny you. They say that you don't get the care your doctor has requested for you. That's denial of care.
What is 'investigative' or 'investigatory'?
Definitions of investigative are all over the board. And remember the insurance company hires teams of lawyers to pick words very carefully so that they have escape clauses when you are the ill one. But I've seen definitions of things done on laboratory rats and animals and not practiced in the medical community. That one's pretty easy. Then they say there are things that in our determination have not reached the level or standard of care that everybody should be practicing in medicine. So again, meaningless terms based on what they believe or what they think; kind of illusory, not a real contract there. What does that mean? Who knows; that's where the litigation comes in, that's where there's some major fights.
What is a 'case manager'?
A case manager is, in the perfect system, someone who is your advocate within the insurance industry. Unfortunately, most case managers are inside the insurance company and if you're a quadriplegic or a paraplegic or someone who's seriously injured in some kind of accident, the insurance company gives you a case manager to make sure that you are cost-effective for the company. On the plus side of it, they're supposed to be there to be your advocate to help you navigate through a difficult system when you're paralyzed or when you're fighting cancer. But often the insurance industry has turned them into cost cutters, people who would go in and kick you out of the hospital early, people who would try to limit your chemotherapy because you don't need that and because it's too costly.
What is the difference between 'in network' and 'out of network'?
In network is a managed care system where they list five doctors for you to go see. Often, those five doctors are either unavailable or they might not have the expertise that you need to fight your disease. The person you would then be seeking would be an out of network doctor, someone who is not in their network who has agreed to a reduced fee. Therefore when you go to an out of network, that doctor usually can request and receive a full fee for his services. The insurance company wants to limit those fees as much as possible, and doesn't like you to go out of network.
