We had our first blockbuster health care scandal in some time over the weekend, when CNN reported that California officials were investigating Aetna after the company’s medical director said that he had never personally reviewed a patient’s medical records when making decisions about what health care the health insurer would cover.
The scandal stems from a lawsuit filed by an Aetna patient, Gillen Washington, who says the company failed to cover treatments for his rare immune disorder. From CNN:
Two state agencies have announced investigations into Aetna to determine whether any state laws were breached.
I don’t know about you, but my initial reaction to this story was: Okay, this sounds bad, but how bad is it really? What can we really learn from this?
So I asked around. To be honest with you, I think the broader health policy community is a little confounded about What This Means. But I picked up on two threads that are worth considering and that might help you wrap your head around this issue, which is probably going to stay in the news for a little while.
1) The immediate question: Did Aetna break any laws?
First and foremost, there is the matter of California state law. The state sets certain rules for the role of an insurance plan’s medical director in reviewing insurance claims.
Shana Alex Charles, a professor who studies insurance at California State University Fullerton, flagged one particular relevant section to me: “If the medical director is not qualified to review a case because of lack of specific knowledge in that medical discipline, then the law requires a consultation with an expert in that field,” she said.
This sticks out because CNN reported that in his deposition, the Aetna official said he had never treated Washington’s condition. If there was a failure to comply with state law, then the state can levy administrative penalties — but this is not, to be clear, a criminal case.
”Clearly, an investigation is needed to determine the full extent of how many provisions were broken and what the consequences should be,” Charles told me.
Not every state has the same laws as California, however. So then there is a question of Aetna’s internal policies. The company insists that its protocols were followed, under which Iinuma said he reviewed information sent to him by nurses who work under him.
There is a diverse bureaucracy overseeing insurers’ decisions about whether to cover care, based on my conversations, and the system described by Iinuma may not be that unusual elsewhere.
”Insurance companies employ many clinical staff (nurses and doctors) to review appeals, exceptions, etc,” one health policy expert told me. “Those reviews go through standard processes, which doesn’t involve the medical director being personally involved in making the decision.”
So for starters, we have to sort out whether state law was being adhered to, and then whether the company’s own directives were being followed. But if those standards were being met, and we still ended up with this situation, that brings us to the larger issue…
2) The real question is about the role of insurers in determining care
At a time when more and more Democrats are comfortable with discarding private insurance entirely and moving to a government-run health care system, here is a glaring example of the apparent failures of a health care administrative bureaucracy overseen by private companies.
You couldn’t cook up a better narrative to sow further public distrust in the insurance industry.
”This is the kind of story that feeds cynicism about insurers among patients,” Larry Levitt at the Kaiser Family Foundation told me. “If the medical director responsible for making coverage decisions isn’t even reviewing patients’ medical records, that just seems to prove that insurers are making decisions based on profit, not the best medical evidence.”
(He clarified that he is not saying himself that insurance companies make decisions based on profit instead of medical need and noted it’s not at all clear that the medical director would have made a different decision if he had personally reviewed the records.)
The point is, this scenario cuts pretty clearly to the core of the fledgling debate about moving to a fundamentally different health care system.
Private insurance companies, already far from popular with the American people, are now fomenting discontent through these processes that, rightly or wrongly, legally or illegally, appear disconnected from a person’s actual medical needs.
We’ve seen this before, with the managed care backlash of the 1990s, Levitt said. But back then, I don’t think anybody regarded a Medicare-for-all program as a viable alternative. But these days, that is quickly becoming the consensus position of the progressive party — and stories like these are probably only going to grease those wheels.
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