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Winning on Appeal

Patients whose insurers say 'no' have new ways to pursue complaints and make them pay


Consumers once faced a lonely struggle--and lousy odds--when they challenged a health insurer's decisions. But that is changing as new methods of appeal give people a fighting chance in disputes with their health plans.

In California and 40 other states, the creation of external review boards that have the power to investigate and, when necessary, overrule insurers' decisions are helping to turn the tide. Consumers who doggedly pursued their right of appeal are winning a wide variety of cases. For example:

* A 4-year-old California girl undergoing speech therapy was denied continuing treatment on the grounds it was not medically necessary. The case was reviewed by an independent doctor hired by the state, who said the girl was making progress, and the health plan was ordered to continue coverage.

* A Maryland woman was referred by her gynecologist for a mammogram, but her health plan refused coverage because she had the screening procedure 18 months earlier. The insurance policy called for a mammogram every 24 months. Her doctor said there was a family history of breast cancer, and the plan was ordered to pay for the mammogram.

* A 7-year-old girl in Texas with sickle cell anemia had been receiving periodic blood transfusions. The heath plan refused to pay for a bone marrow transplant that could reduce the need for the painful and frequent transfusions. The family appealed, and the insurer was forced to pay for the operation.

Though disputes between health plans and their customers over expensive and experimental lifesaving procedures make the most headlines, most complaints are more mundane: Patients have already received the medical services and HMOs don't want to pay for them.

A recent study by Rand Corp., a Santa Monica research firm, found that it is becoming easier to appeal as health plans come under increasing pressure from disgruntled patients. The study cited the prevalence of "goodwill payments," cases in which the health plan believes its decision to deny a member's claim is correct but pays it anyway because it doesn't want to upset the member or an employer.

Besides the internal appeal process at the health plans, the state external review boards give consumers another way to press their case. This puts pressure on the health plans to settle complaints before they get the attention of state regulators. In high-profile cases, a disciplinary action by regulators and the accompanying publicity can be embarrassing to an insurer.


The Rand researchers, who studied 11,000 appeals between 1998 and 2000 at two large California HMOs, found that consumers were overwhelmingly successful in appealing for reimbursement for past services. They won 89% of the appeals at one HMO and 78% at the other health plan. Particularly striking was the fact that patients won appeals involving emergency-room care 95% of the time. Patients were less successful when they tried to ensure payment for a future doctor referral, treatment or prescription, winning only one in every three cases, the Rand study found.

Most insurers have a two-step internal appeals process. After an insurer's initial denial of a member's request, the insurer will reconsider it once, then again. In effect, the insurer has three chances to say "yes"--or "no." Consumer advocates say that anyone whose claim is denied should immediately write a letter to the company asking for reconsideration. A phone call can be ignored. A letter establishes a paper trail that may be needed later. Your doctor can be a key ally in the appeal. Ask your doctor to write a letter supporting your claim. Or get a second opinion from another physician and send copies to your health plan.

Remember, also, that details count. Health plans often do not get enough information from hospitals or doctors to substantiate a patient's claim, so patients can help their cases if they provide those details, said Joe Baker, a health advocacy official with the New York state attorney general's office. When appropriate, get information from an emergency room doctor or other attending physicians who provided follow-up care.

One common area of conflict between patients and health plans is payment for prescription drugs. As costs rise, many plans are making it more difficult for members to get some brand name drugs. Weight-loss drugs such as Meridia and Xenical may be excluded under some health plans. Claritin may come with a much larger co-payment to encourage use of cheaper allergy medications.

Health plans are turning to strict formularies, which are approved lists of medications. Your doctor may prescribe a drug, but the health plan insists a cheaper generic is adequate. A letter from your doctor stating that a particular drug is medically necessary may help you win an appeal.


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