Strategies that May Help You Deal With Insurance Companies and HMOs

Organization: PA Health Law Project

Guiding principles for dealing with insurance companies:

Document everything
Don’t rely totally on physicians and providers
Be persistent

What to do when you’re told the service or equipment isn’t covered:

Determine what is covered:
Don’t believe everything you’re told
For employer provided commercial plans or COBRA plans: ask your employer’s human resources office to provide you with a copy of the portion of the master policy that specifies what’s covered
If you can’t get it read the member handbook thoroughly

For questions concerning coverage under Medical Assistance- call the Health Law Project at 1-800-274-3258

If there’s a reasonable argument under the master policy that the service or equipment should be covered, file an appeal (see below)

If not covered under the master policy try to make a deal

It is possible for folks at a hospital or providers office who deal with the insurance companies to sometimes convince the insurance company or HMO to cover something not normally covered where the uncovered service is essential to ensure the effectiveness of another service the insurance company or HMO is going to pay for. Also possible where you can trade some coverage for an otherwise uncovered service Medical necessity determinations.

What’s needed in a letter of medical necessity:
Diagnosis of condition for which the service or equipment is needed
The specific functional limitation or medical problem of the individual that the service or equipment is intended to treat or ameliorate
A detailed description of the service or equipment where the service is new, unique or customized and- especially for equipment- specify what it does in relation to the individual’s functional limitation.
Where the service or equipment is new or controversial, evidence that the service or equipment is effective (copies of studies if possible)
Where there are less expensive alternatives, the reasons why these alternatives are not appropriate

Working with the prescriber
Don’t rely entirely on the prescriber to handle the medical necessity documentation.
Doctors often don’t like dealing with insurance companies or HMOs and don’t always do a thorough job of documenting medical necessity.
If a professional other than the prescriber has more information about the factors above (such as a physical therapist may know more about the individual’s functional limitations or the specifics of the equipment being requested, than the prescribing physician), make sure you get something in writing from that professional and get it to the prescribing physician so he or she can add it to their letter of medical necessity.
The individual should write down specifics on their function limitations for the prescribing physician to add to his/her letter of medical necessity.
Ask to see the letter of medical necessity before the doctor’s office sends it out.

Where the plan offers a less expensive alternative
Try to anticipate this in the letter of medical necessity
If that doesn’t work, have the professional you are working with (such as a physical therapist) review the alternative and write up statement of reasons why it would not be appropriate in this instance (note the alternative doesn’t have to be the best- it only has to be appropriate).
Give that to the prescribing physician and ask he/she write a letter incorporating the pt’s comments.
If the physician feels too intimidated by the plan to support you in this, you may have to consider changing physicians.
If the prescriber will write the letter, file an appeal or grievance and attach the prescriber letter.
If the prescriber insists that you try the less expensive alternative
Keep a log of any problems that result from the use of that alternative or functional limitations that the alternative fails to improve.
Go back to the prescriber with the log and ask they represcribe the original service or equipment including your log in their letter of medical necessity.

Whether the providers who are in the plan’s network or will accept the reimbursement offered by the plan are accessible and competent

Lack of providers with physically accessible offices (For HMOs and PPOs)
If there isn’t a provider within a reasonable distance that is physically accessible within the network, can file a complaint under section 504 of the federal Rehabilitation Act (if the HMO/PPO has a Medicare or Medical Assistance contract) or under Title III of the Americans with Disabilities Act (ADA) with the federal Department of Justice at (202) 514-0301 or file a lawsuit in federal court.
Could also submit an informal complaint with the State Dept. of Health on the grounds that the network is inadequate- but the State Dept. of Health does not have jurisdiction to enforce §504 or the ADA.

Lack of competent specialists
This is more difficult to fight. Need to provide evidence, usually from the PCP, that your condition is sufficiently rare or complex that it requires a specialist with very special training or experience.
You would then have your PCP request that you be allowed to go “out of network” because the plan doesn’t have a physician with the requisite training or experience.
Will usually need to file a grievance on these requests.
Filing appeals/grievances with “regular” health insurance (“indemnity plans”) We don’t have state laws or regulations mandating a specific appeals process so the appeal process is whatever the insurer chooses to provide.
Can go to court under a contract claim
For self-insured plans (contact your employer to find out if the plan is self-insured), the final appeal is to the employer. If the employer turns you down, you can file a lawsuit in federal court under a federal law called “ERISA”.

Filing appeals/grievances with HMOs and “gatekeeper” PPOs (Preferred Provider Organizations)

Complaints vs. Grievances
When a person in an HMO/PPO wishes to contest a decision about their health care, it is important they file a grievance rather than a complaint.
Complaints do not entitle a subscriber to any of the grievance rights set out below.
Unless the request or dispute is put in writing by the subscriber with a clear indication that it is a grievance, the HMO/PPO may consider it only to be a complaint.
Therefore, any dispute from a subscriber should be put in writing and should have the word “Grievance” at the top.

Levels of Grievances
A grievance is an opportunity for a subscriber to have his/her request or dispute heard and decided by persons who were not directly involved in making the disputed decision. These persons are called the “Grievance Committee”.
HMOs may provide one or two levels of grievances which are described below.
If the subscriber goes through the levels of grievance provided by his/her HMO/PPO, he or she can then take their grievance to the Department of Health (also explained below).
This memo also explains special quicker procedures when the dispute involves a “medically pressing issue”.

1st Level Grievance

Subscriber rights
The subscriber has the right to submit written information and have an “uninvolved” HMO/PPO staff person assist in that effort. [¤9.73(1(ii) &(7)] However, the subscriber does not have the right to attend the grievance committee (although HMOs have been urged by the Health Department to allow this).

Grievance Committee
The Grievance Committee decides the grievance.
It must be comprised of one or more employees of the HMO/PPO who were not involved in the decision being appealed and were not involved in handling the complaint, if any, that preceded the grievance.
The Committee should review the grievance within 30 days.

Grievance decision
The Grievance Committee must issue a written decision within 10 days of the date it meets to review the grievance.
If the Committee finds against the subscriber, even partially, the written decision must contain: the reasons for the Committee’s decision; the evidence or documentation relied upon; and a statement regarding the subscriber’s right to file a second level grievance, the time limits for filing the 2nd level grievance & how to file that grievance.
2nd Level Grievance Note: An HMO/PPO may chose to limit its grievance procedures to a single level so long as that level complies with the 2nd level requirements set out below.

Time limits

HMOs should provide between 30 and 60 days from the date the 1st level grievance decision is issued for an subscriber to file a 2nd level grievance.

Grievance Committee
The Grievance Committee hears and decides the grievance.
Committee members are appointed by the HMO’s Board of Directors.
One third of the Committee members must be subscribers.
Committee members may not have any previous involvement in the decision being appealed or the 1st level grievance.

Date/notice of hearing
HMOs must hold hearings at “mutually convenient times”
The subscriber must be notified of the date & time at least 15 days in advance.
The hearing should be held within 30 days.

Right to appear/ be represented
Unlike the 1st level grievance, subscribers have the right to appear at the 2nd level grievance hearing and present their case.
They also have the right to be represented by a person of their choice, including a non-involved HMO/PPO staff person.
However, failure to appear is not grounds for dismissing the grievance.

Right to question staff
The subscriber has the right to question HMO/PPO staff at the grievance hearing concerning the dispute.

Disputes involving differing physician opinions
Where the subscriber has documentation from a physician contradicting the opinion of his/her primary care physician or the HMO/PPO Medical Director, the Grievance Committee cannot automatically assume the PCP or Medical Director is correct.
It must make an independent assessment.
The HMO/PPO must have written procedures for utilizing “informed consultants” to resolve grievances.

Hearing process
The written decision of the 1st level grievance must be the basis for deliberation.
If the HMO/PPO has an attorney to represent the staff making the decision appealed from, it must also provide an attorney for the Grievance Committee (but has no obligation to provide an attorney for the subscriber).
Written minutes or a tape recording of the hearing must be made.

Hearing decision
The grievance Committee must render its decision within 10 working days following the hearing.
The Committee must send a written decision to the subscriber which must include: the evidence or documentation relied on by the Committee; the rationale for its decision; and a statement that the subscriber has the right to appeal to the Department of Health.

3rd Level Appeal- Dept. of Health

Time limits
The subscriber has 30 days to file his/her appeal with the Dept. of Health “unless extenuating circumstances are involved.”

How to appeal
Appeals to the Dept. of Health are to be made in writing and mailed to: Bureau of Managed Care Room 1026 Health & Welfare Bldg. Dept. of Health PO Box 90 Harrisburg, PA 17108-0090

Departmental hearing
The Dept. of Health may hold its own hearing, require the HMO/PPO to rehear the grievance to address specific issues or decide the case on the documentation supplied by both sides.

Expedited grievances for “medically pressing issues”
When the dispute involves care which is alleged to be medically necessary and “pressing” [not defined by the Dept. of Health], and the care has not yet been provided, the HMO/PPO must render an initial decision approving or denying the care in writing within a “reasonable time” which is defined by the Department as 48 hours.
If the subscriber appeals that decision, the grievance would begin at the 2nd level.

Persons on Medical Assistance in HMOs
Persons on Medical Assistance in HMOs have all the rights set out above and also have the right to file an appeal with the Department of Public Welfare.
There are also special rules that apply to grievances under the “HealthChoices” program.
To file an appeal with the Department of Public Welfare, write your name, address and phone number, name of your HMO/PPO, your HMO/PPO subscriber number and the decision you are disputing on a piece of paper.
Put “Appeal” at the top of the paper.
Mail the appeal to: Department of Public Welfare Office of Medical Assistance Programs HealthChoices Program P.O. Box 2675 Harrisburg, PA 17105-2675

What to do for more help
The PA Health Law Project is available to advise and assist persons with disabilities and persons on Medical Assistance in disputes with their HMOs.
You can reach us by calling 800-931-7457 or 800-274-3258.
You can also call the PA Department of Health, Bureau of Managed Care (which licenses HMOs) at 888-466-2787.

Drafted by David Gates 10-14-97
Permission granted by David Gates to reprint article with credit attributed to the PA Health Law.