Health Plans Fail To Disclose Required Coverage Information

Attorney General Spitzer today released a report with a survey showing that health plans in New York State are failing to disclose required information that could help consumers obtain coverage for medically necessary treatments.

"This report shows that consumers are being deprived of information that is both required under state law and necessary to ensure appropriate health care," Spitzer said. "My office is now working with health plans to ensure that appropriate information is made available to consumers. We are continuing to monitor the health plans' performance, and we are proposing new legislation to strengthen penalties for non-compliance."

As part of the investigation, members of Spitzer's staff posed as prospective enrollees of a health plan. Five letters were sent to each of 22 health plans requesting information on the standards used to determine whether or not a treatment for five different conditions was medically necessary and therefore covered by insurance. Disclosure of this information -- known as "clinical review criteria" – is specifically required under the state's Managed Care Consumer Bill of Rights.

For example, one letter stated that the writer was a diabetic who wanted to buy an individual insurance policy. The writer requested information about how the health plan would decide whether an insulin pump would be a covered expense. Information was also sought for coverage of nutritional supplements to more serious procedures, including arthroscopic knee surgery, breast reduction surgery and surgery for Crohn's disease.

Spitzer's staff analyzed the responses from the health plans and assigned grades to the plans based on the number of satisfactory responses. A "satisfactory" response was one in which the plan satisfied the statute by sending sufficiently specific information to constitute clinical review criteria, whether the language was in the member handbook or provided as a separate document. An "unsatisfactory" response was one in which the plan sent only general plan materials that did not contain information sufficient to constitute clinical review criteria or the plan did not respond at all. Four to five satisfactory responses resulted in an "A" grade; three satisfactory responses resulted in a "B;" two satisfactory responses received a "C" ; one satisfactory response resulted a "D"and, no satisfactory responses led to an "F."

Out of 22 plans studied, half (11) received an "F" for compliance, seven plans received a "D," three plans received a "C," and only one plan got a "B." No plan received an "A." Twenty-six percent of the 110 letters received no response from the plans at all.

Spitzer said that when health plans fail to respond to such information requests they may discourage chronically ill New Yorkers from enrolling in their plans and thwart the state's commitment to making insurance accessible to all without regard to health status.

The Attorney General's office has sent letters to each of the plans surveyed detailing particular violations and requesting that each plan take immediate measures to comply with the law and set a meeting date to discuss permanent compliance measures. Plans that repeatedly fail to comply with the law could face legal action.

In addition, Spitzer is urging the State Legislature to pass legislation that he proposed to establish penalties for violations of the Managed Care Consumer Bill of Rights (Attorney General Program Bill #68; A. 8604/Gottfried and S. 5063/Hannon). Currently, there are no specific penalties for violations of this consumer protection statute.

Richard Kirsch, Executive Director of Citizen Action of New York, said: "We stand with the Attorney General in calling for passage of strong Managed Care Bill of Rights penalties. This report is the latest of several reports that found violations of the law by HMOs; clearly, sharper enforcement teeth are needed."

The survey was prepared by Assistant Attorneys General Paul Beyer, Heather Hussar and Susan Kirchheimer of the AG's Health Care Bureau, under the direction of Albany Section Chief Troy Oechsner and Bureau Chief Joseph Baker.

Consumers and providers with questions or concerns about health care matters, can call the Attorney General's Health Care Bureau Hotline at 1-800-771-7755. The full text of the report is available on the Attorney General's website: www.ag.ny.gov.

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