Health Plans Agree to Provide Required Coverage Information

Health insurance plans statewide have agreed to better comply with a law requiring them to answer coverage questions posed by prospective customers.

Attorney General Eliot Spitzer said today that 21 health plans operating in New York have agreed to take new steps to ensure that consumers have the information they need to intelligently shop for health coverage and obtain medically necessary care.

Under the agreements, the health plans have pledged to be more responsive to requests from consumers for so-called "clinical review criteria," which is used to determine whether health care claims will be covered. In the past, health plans have sometimes failed to disclose these criteria and other essential coverage information, discouraging access to needed care.

"Consumers need clear and complete information from health care plans," Spitzer said. "These agreements obligate the health plans to provide that information and help consumers make the right decisions in choosing a health plan and obtaining medically-necessary care. The agreements may also make it easier for chronically-ill New Yorkers to enroll in plans that meet their special coverage needs."

The agreements stem from a March 2004 report by Spitzer's Health Care Bureau. The report found that all of the plans offering individual coverage in New York failed to comply with state coverage information disclosure requirements.

In compiling the report, members of Spitzer's staff posed as prospective health plan enrollees. 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 and more serious procedures, including arthroscopic knee surgery, breast reduction surgery and surgery for Crohn's disease.

Five letters were sent to each plan 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 is specifically required under the state's Managed Care Consumer Bill of Rights.

Spitzer's staff analyzed the responses from the health plans and assigned the plans grades based on the number of satisfactory responses. 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.

The clinical review criteria are extremely important to consumers with existing medical conditions because they contain the standards that the health plans use to determine whether a specific treatment is medically necessary; if not, coverage is denied and the consumer is left with the choice of either foregoing medical care or paying out-of-pocket. The State Managed Care Consumer Bill of Rights requires health plans to disclose these criteria to both current and prospective enrollees upon written request.

Noting that all of the plans cooperated fully with the inquiry, Spitzer commended certain plans for agreeing to present the required information in a way that was particularly useful to consumers. For example, Excellus Health Plans, based in Rochester, agreed to make its clinical review criteria available to all consumers on its Internet website. MDNY, a Long Island health plan, agreed to translate the medical jargon in some of its criteria into simpler, lay language.

Spitzer renewed his call on the Governor and State Legislature to pass legislation originally proposed by the Attorney General in 2001, to establish clear penalties for violations of the Managed Care Consumer Bill of Rights. Currently, there are no specific penalties for violations of this consumer protection statute.

The settlements announced today specifically require the health plans to ensure that all consumer requests for clinical review criteria are honored and to submit annual compliance reports to the Attorney General's Office. Each plan will also pay $5,000 in costs to the state.

The case was handled by Assistant Attorneys General Paul Beyer, Heather Hussar and Susan Kirchheimer, and Section Chief Troy Oechsner under the supervision of Joseph Baker, Health Care Bureau Chief.

The full text of the report is available on the Attorney General's website: www.oag.state.ny.us. 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.

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