THERE'S NOTHING MUTED or self-effacing about state Sen.
Ann Day. She's candid, fiery, and as one HMO lobbyist delicately puts
it--"prone to speaking before she thinks." She's been
called erratic and emotional.
In 1994, she slipped out a side door when members of the Navajo
Nation, worn out after an exhausting drive to the Capitol, began
testifying about reservation funding. When confronted with the
insulted Navajos' suspicion as to whether it was the bill or their
brown skin that caused her to walk out, she unselfconsciously
replied that "it made me uncomfortable." She's likable
in a Driving Miss Daisy sort of way.
And she's no match for the managed-care industry. She honed in
on consumer rights and basked in the limelight of HMO reform.
Most people view HMO reform and managed care like a corporate
Tower of Babel replete with terms like "gatekeeper,"
"provider" and "covered life," far beyond
the grasp of busy, ordinary people. It is. It's also beyond the
grasp of Ann Day, who prides herself on protecting consumers.
Day claims she successfully went after the health-maintenance
organizations. What she was really up against was the HMO industry,
plus the insurance industry plus big business. She was swallowed
up in an alliance of interests that tenaciously seek profits.
Unlike the ill, whom they supposedly serve, these are healthy
businesses in high gear that deftly plucked "healthcare"
from the realm of medicine and made it a Wall Street cash cow.
Day should have intuited that somebody was up to no good when
then-Gov. J. Fife Symington III, in 1996, appointed her and state
Rep. Susan Gerard to an HMO-reform task force dominated by 20
or so of the finest legal minds from Cigna, Humana, Aetna, Partners,
Pacificare, Intergroup and more.
Aside from Day and Gerard, Symington hand-picked only a few people
to represent consumers. Joe Slattery, who was with the state Department
of Economic Security, wasn't too surprised that Symington appointed
him, because he "already had a good working relationship
with the managed-care companies." Dr. David Landriff joked
that "he was the only one from the Arizona Medical Association
that the managed-care plans could agree on."
It still doesn't impress Day that an HMO industry-stacked task
force actually forged state healthcare policy.
"I was there! I have a problem with the fact that you don't
realize I represent the consumer and the industry representatives
had to answer to me," she snaps defensively.
The task force met weekly throughout the choking-hot summer of
'96 and past the New Year's holiday of '97. Day is proud of the
outcome, Senate Bill 1098, which took effect in July. The new
state law sets up a grievance and appeals process for those who
disagree with their HMOs' decisions.
Sometimes Day remembers that it doesn't apply to most people
in Arizona. "Well, it's valuable to those it applies to,"
she says with exasperation.
For all the "arm-twisting" she claims she did during
those eight long months, one federal law completely erases those
state reforms for most people. The federal Employee Retirement
and Income Securities Act of 1974, (ERISA) was never intended
as a loophole through which today's "managed-care" health
plans could escape all accountability. Nearly 25 years of legal
maneuvers and court decisions have forced ERISA into becoming
the scam that it is: Most Arizonans will find that Day's long-sought
grievance and appeals process doesn't apply to them because they
get health insurance through their employer.
"It's a cruel hoax to pass HMO reforms that are unenforceable
for 80 percent of the people who receive their health coverage
through their employer," says Jamie Court, of Consumers for
Quality Care (CQC), a California-based healthcare watchdog group.
"People with employer health coverage have no idea they're
second-class citizens and not entitled to state law protections
against wrongful death, denial of care, injury due to delayed
care, intentional infliction of emotional distress or fraudulent
representations by their HMO."
The ERISA territory is murky and complex, but if your employer
has a "self-funded" arrangement with managed-care plans,
then you have an ERISA problem, as consumer crusader Ralph Nader
has succinctly phrased it.
Cathy Bischoff, who facilitated Symington's HMO task force, defended
the apparently royal waste of time and money: "It doesn't
apply to people in ERISA plans--there's the rub. But it's the
best we can do for now. Legislation on social issues is always
piecemeal. It's a dramatic analogy, but look at slavery. We didn't
abolish slavery all at once either. Legislation is not a clean
process, it's not always an honorable one, but it's the way we
get things done." Bischoff seems downright disdainful of
those who would want to use the new state appeals process against
their HMOs but will find it's been erased by federal law: "People
don't know how to deal with their own mortality. When they're
sick, they're not always rational, so it's often irrational people
making claims against their health insurance."
John McGann, of Houston, Texas, seemed rational. He got his insurance
through his employer, H&H Music Company. When he found out
he had HIV, he tried to get treatment but was told the company
had changed its policy and cut way back on paying for HIV-related
treatment. It even changed the terms of the contract that McGann
had already paid on. "Retroactive elimination of coverage"
is well known to many bitter victims of this practice. McGann
claimed discrimination in court, but lost. The judge ruled that
"ERISA's sweeping scope did not prohibit the retroactive
elimination of coverage for catastrophic illness, even though
the benefit change may stem from prejudice against AIDS of its
victims."
The U.S. Supreme Court upheld that ruling.
Aside from blatantly sanctioning prejudice, the court's interpretation
of ERISA, in its healthcare context, turns the concept of insurance
ass-backwards: Don't most people get health insurance precisely
in case of catastrophic illness? Before he died, McGann said that
any benefits that can be taken away after you've already paid
for them are not benefits at all. ERISA rendered them worthless.
McGann's photo joined hundreds of other victims of the ERISA
loophole, compiled by the CQC. Each day, in its "ERISA Casualty
of the Day" campaign, the CQC sends the photo and story of
another person maimed, mistreated or killed by his HMO or insurance
company to every member of the U.S. Congress. Like crosses in
Flanders fields, they form a powerful reminder that the wronged
don't rest easy.
DAY CLAIMS "the ERISA problem" applies to 50
percent of Arizona's population, but she says she doesn't remember
where she got the figure. "I'm sure somebody knows, because
that figure was floating around at the time."
In fact, no agency or think-tank has those figures because--again
it gets fuzzy--healthcare through ERISA plans are not really "in
the business of insurance," and are therefore not regulated.
The self-funded employer usually contracts with several HMOs and
in effect, just rents their doctor network.
Bradford Kirkman-Liff, an Arizona State University professor,
recently combed through 1995 census and economic profile data
and crunched the numbers for each county. He estimates that 60
percent of Arizonans are not protected by state law against HMO
abuses. The CQC estimates 80 percent and the Cato Institute, a
conservative think-tank, came up with 72 percent.
"In fairness to the industry," says Cigna lobbyist
and attorney Steve Barclay, "people would know more if they
read their darn health insurance booklets, but they spend more
time programming their VCRs."
It's true that ERISA reform isn't exactly a political hot button
for most people. It's odd that a law, whose enforcement victimizes
so many people and prompts many federal judges to scream for change,
is rarely whispered beyond a courtroom.
"These ERISA victims are like voices crying in the wilderness.
They form no powerful political force. We don't even hear them
until we fall ill ourselves," says California attorney Michael
McKuin.
Federal judges keep throwing the torch to consumer groups, which
are pitted against the powerful insurance and managed-care lobbies.
Day, in her zeal to represent the consumer, wants Arizona to
waste more time and money on yet more unenforceable HMO reforms.
She was disturbed that 18-year-old Adam Ross of Scottsdale couldn't
get the necessary treatment this summer for his rapidly growing
brain tumor because his HMO--Humana--didn't cover the experimental
treatment that doctors said was his only option for survival.
Ross finally got his essential cancer treatment through Arizona's
indigent health care plan--AHCCCS. Humana, which supposedly covered
Ross through his mother's employer, wanted to continue discussing
the case with the Ross family even though time was of the essence.
Day can't seem to remember that even if she could ram a bill
through the Legislature requiring HMOs to cover such experimental
treatments, it would not apply to most people--not even Adam Ross.
If ERISA self-funded plans don't want to go along with state law,
they don't have to.
Since most Arizonans are enrolled in HMOs through their employers,
whereby ERISA voids all state laws trying to protect us, what
was the HMO task force doing for eight long months?
Were they billing us for their time, so they could tell us they
don't have to do anything because they're not held accountable
for what they do or don't do? That if we don't like it, it's probably
because we're ill, in which case it's just cheaper for them that
we die?
SYMINGTON'S TASK force should have been shoved into the
real, raging world of a hospital, like the one where another Humana
patient anxiously waited. His heart had so much damage that a
transplant was his only hope.
A thousand miles away, Dr. Linda Peeno, a Humana medical-coverage
reviewer, wrung her hands as she sat in front of a bank of computers,
calling the shots for Humana patients across the country.
As she later told the U.S. Congress in 1997, she knew that if
she authorized the transplant, she'd be gone the next day. So
she denied it, knowing this Humana patient who'd faithfully paid
his premiums would die and that she saved Humana half a million
dollars.
"Once I stamped 'Deny' across his authorization form, his
life's end was as certain as if I had pulled the plug on a ventilator,"
she testified. "Everyone was thrilled when I denied that
coverage," she said, adding that she was rewarded by Humana
with advancement.
"I made many decisions equally as devastating as the heart-transplant
one," she later confided to San Francisco Chronicle
reporter William Carlsen. "The distance made it easier."
She later switched to Blue Cross/Blue Shield's HMO, only to realize
that every HMO expected her to forsake her medical values, and
the people who depended on them, for the financial benefit of
the company.
In September, Texas became the only state able to skirt the federal
ERISA law, aided by a federal judge disgusted by HMOs' mistreatment
of patients. His ruling enables Texans to sue their HMOs.
The health insurance companies have swarmed all over that ruling,
claiming the Texas law "improperly seeks to circumvent ERISA."
Sen. Day is not interested in pursuing such bold legislation
here. The HMO representatives and lobbyists know her too well
and can pull all her levers. They know when to praise, when to
withhold it, and how to wrap a reassuring arm around her shoulder
and steer her away from ideas about messing with their business.
They shriek that the mere prospect of lawsuits would drive up
costs so that some small employers would have to drop health coverage.
They may have shown her studies that support this, except that
those rigged studies were funded by HMO trade groups. She'll never
see the studies by independent groups, like the Washington, D.C.-based
Muse Associates, that found costs would rise 0 to 0.2 percent.
"Lawsuits have never solved anything. If it gets to a lawsuit,
the system is broken down," Day says blithely.
In an odd twist, the nearly bullet-proof ERISA shield doesn't
apply to government employees like Day. Unlike her constituents,
she can sue.
A Case In Point
How Would Little Whitney Tinney's Parents Fare Under The
Wonderful HMO "Member Satisfaction" Appeals Process?
WHEN BLUE CROSS and Blue Shield of Arizona refused to pay
for 9-year-old Whitney Tinney's necessary heart surgery last month,
many were appalled.
A courageous cardiac surgeon, David Arzouman, defied Blue Cross
and performed the surgery anyway.
Actually, little Whitney's predicament was clear-cut for any
modern health insurer: The surgery simply wasn't covered. Yet
most health plans are adept at heading off such a PR disaster
in the making. They're usually quick to treat cardiac problems
because it garners too much attention if they don't, as the red-faced
Blue Cross officials learned when little Whitney's story went
national.
But what about other "necessary surgeries" that health
plans routinely deny or delay?
As Brian McNeil of the state Department of Health Services, who
was ex-governor J. Fife Symington III's health-policy advisor,
explained: "Managed care plays the odds that something disastrous
won't happen. If the company is operating as it should, their
first and maybe only issue is profit. If people want an indemnity
plan at HMO prices, it's not going to happen. People need to come
to grips with that." He was deadly serious.
Variations of that expression--"people need to come to grips
with that"--are repeated over and over by supposedly neutral
parties dealing with managed-care companies, health plans and
HMOs.
Before health insurers became so wildly profitable and callous,
little girls like Whitney would've been rushed to surgery, and
only afterwards would the battle over who would pay have commenced.
Now, the bickering starts before surgery takes place, when time
is of the essence. And these days a caring surgeon like Arzouman,
who does his duty by rushing someone into an operating room, faces
the distinct possibility he'll lose his contract with Blue Cross
and every other health plan that hears that he's helped focus
media heat on the company.
"That ran through my mind after the surgery," says
Arzouman, who also risked his standing with the hospitals whose
operating rooms he uses.
STATE SEN. Ann Day says Whitney's parents should appeal
Blue Cross' decision with the state Department of Insurance.
Of course, if the Tinneys purchased their Blue Cross insurance
through a self-funded employer, the state would have no say in
the matter, because of the federal ERISA exemption. Day might
as well have directed the Tinneys to Monty Python's Ministry of
Silly Walks.
But if the Tinneys purchased Blue Cross coverage on their own,
or through an employer that isn't financially liable for the medical
claims of its employees, then they can use Day's much-vaunted
appeals process. However, in directing the Tinneys to the Department
of Insurance, Day must have forgotten that her "hard-fought"
appeals process forbids the department from allowing the Tinneys
to file a complaint until they trudge through every step of the
new appeals process with their health plan.
And by law the Tinneys won't be able to have an attorney with
them when they get to the stage where they're allowed to meet
with the Blue Cross officials who've been toiling to convince
them they're just suffering from ignorance. During this stage,
called the "Member Satisfaction Committee" meeting,
the Tinneys might feel intimidated by the presence of numerous
Blue Cross representatives variously skilled at negotiating, bluffing
and appearing as though they really care that some 9-year-old
wouldn't have been able to go on living if they'd gotten their
way.
Then again, that uneasy feeling the Tinneys might experience
at the "Member Satisfaction Committee" meeting might
come from a dawning realization that Blue Cross and other HMOs
don't have to listen to the people who pay them. Nor does any
government or private entity tell them what to do.
And in those freakish cases when HMOs are subject to state law,
they have a solution: Send in their own people to draft the very
laws meant to reform them.
Blue Cross representatives could just as well use a "Member
Satisfaction Committee" meeting to shout to the Tinneys:
We and other 'managed-care' companies own the patients, we
own the doctors and we sure as hell own the state Legislature.
Who are you to bring media heat on us?
Finally, if the Tinneys don't crumble during that stage of their
appeal and still maintain Blue Cross was wrong in denying their
daughter's surgery, the whole ugly mess goes to an outside "independent
reviewer." Now that sounds refreshingly fair--except that
the Department of Insurance allowed the heath plans to pick who
they wanted as "impartial, independent reviewers." The
Department of Insurance compiled a list of independent reviewers--names
submitted by Blue Cross, Cigna, Aetna, Intergroup, and yeah, we
get it. There is no impartial, independent review.
And we wonder about Ann Day.
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