Could it happen to you? Fox’s case might once have been unusual, but no more. After a seven-month investigation, the Los Angeles Times in August published a series of articles concluding, among other things, that California HMOs were saving money by rationing medical care to their members. Last month the New York Post ran a week’s worth of stories on “managed-care casualties,” including one about a newborn’s death. On Oct. 1, CBS’s “60 Minutes” documented how HMOs are damaging the way doctors practice medicine. Why the outcry? Simple. If you’re healthy, like most people, you’re probably delighted with HMOs–particularly their tiny out-of-pocket cost to you. But if you’re sick and require expensive tests or consultations with specialists, there’s mounting evidence that your HMO might delay (or deny outright) crucial care. Says William Shernoff, a Claremont, Calif.,lawyer specializing in health-care cases: “I thought insurance companies were bad in traditional health-care plans, but HMOs are worse.”
You can protect yourself and your family. But doing so is neither easy nor cheap. The first step is to understand what makes an HMO tick. The second is to become a warier, more aggressive consumer of HMO-style health care. Here are four real-world facts you should know:
The critical question to ask your HMO: how do you compensate the doctor? If he is “capitated,” he receives a set amount per month, say 825, for every HMO member under its care. If he is also “at risk,” he loses money if the cost of caring for an HMO enrollee exceeds this stipend. Thus, a doctor who orders $1,500 in tests on your gastrointestinal system has to pay for it himself-and loses money on you as a patient. The fewer tests he orders, the more money he makes. “When a doctor stands to make more money if he does less for the patient, it’s not good for you,” says Dr. Michael Klein, a gastroenterologist in Glendale, Calif.
Dave Ching believes that’s exactly what happened to his 34-year-old wife, Joyce. Her doctor, Elyin Gaines, a member of Simi Valley Family Practice Inc. in Simi Valley, Calif., was paid $26.94 per month by MetLife HMO to care for Mrs. Ching, according to a complaint filed in Ching’s suit against Gaines, and also required him to cover the first $5,000 of expenditures on specialists or outside tests for her, When Mrs. Ching consulted Gaines with severe abdominal pain and rectal bleeding in August 1992, the doctor decided not to do any further tests or examinations even though he found a mass in her abdomen, says the complaint. All together Dr. Gaines and his partner denied Mrs. Ching’s request to see a specialist six times over the course of the following 2 1/2 months. As a result, says Mark Hiepler, the Oxnard, Calif., attorney representing Ching, Mrs. Ching’s un-diagnosed (but highly treatable) cancer perforated her bowel and spread, leading to her death in April 1994. The suit, now in front of a jury in Ventura, Calif., alleges that the doctors “placed their own financial interests above the Chings’ health care.” Simi Valley and the doctors say they can’t comment until the trial is over.
Fear of financial penalty helps explain why even salaried HMO doctors may be unwilling to use outside help. Peter Moore, a 46-year-old professor at the University of Illinois’s College of Medicine, won $6.4 million from a suit against Rush Anchor HMO, in Chicago, claiming that his doctor failed to diagnose him or refer him to a neurologist until months after he began suffering from leg spasms. Moore says because needed surgery was delayed, he lost the use of his legs. “I have no evidence that this happened in Moore’s ease, but I believe doctors are given a message about the expenses they incur when they come up for salary review,” says Bob Winter, an attorney at Robbins, Salomon & Platt in Chicago. Says HMO spokesman Gary Mans: “Throughout his care with Rush Anchor HMO, Mr. Moore received all treatments and all referrals that were requested or thought necessary.”
Many HMOs gag their doctors. “Under some contracts doctors may not ever complain, they may not tell their patients what’s wrong with an HMO, they may not go to a public body and say anything negative about an HMO and they may not get into a fight with an HMO administrator who’s refusing to let a patient have an expensive procedure,” says Whitney Seymour Jr., a New York lawyer with Brown ey Seymour who specializes in insurance and HMO cases. If they do speak out, they can be terminated.
Your HMO doctor, in other words, may be practicing medicine in a straitjacket. Once you understand that, it’s easier to get the best care possible out of your HMO. Here’s what you can do:
Don’t give up your legal options. If possible, don’t sign an HMO contract requiring you to arbitrate a dispute. Arbitration usually works in favor of companies. Refuse to sign, or cross out the arbitration clause and initial it. Cheek for an arbitration clause in the contract your employer signed. If there is one, lobby your employer to have it changed.
Find out how your HMO compensates your doctor. Ask it to provide you with an unaltered provider contract, or ask your employer to request one. Understand how it influences your doctor’s behavior. Capitated doctors with full risk, shared risk or whose HMOs hold back a large percentage of their payment (called a “withhold”) usually have the most to gain by denying care. Doctors who are on salary or who are paid a fee for each service have less of a financial incentive to ration.
Get copies of claims filed on your behalf. Enrollees usually don’t have to file claims because the HMO does it. Review the claims and supporting documentation, and supply any missing information to the HMO’s central office. Keep these records in case they become pertinent later.
Confront your doctor. If he won’t order a test or refer you to a specialist who can get to the root of your symptoms, let him know that you know how he’s compensated. “Ask him if he stands to make more money by not giving you a referral,” advises Hiepler, who has represented more than 100 HMO patients. If he still refuses, ask him to put the denial in writing. Call the HMO’s central office to verify that you’re covered for the treatment you want. Get it in writing.
Go outside the network for a second opinion. Some HMOs pay for them. If yours doesn’t, spend your own money to protect yourself. If the second doctor believes you need the test or procedure, ask him to write the HMO on your behalf, with a copy to your HMO doctor. Also write to the HMO’s president, head of marketing, medical committee and board of directors. Enlist your employer’s help.
File an immediate appeal. HMOs are finicky. Follow the HMO’s instructions exactly. Communicate by registered mail and keep copies. The first response is likely to be negative, but pursue the appeal until you’ve exhausted all the steps. In every letter you write, let the HMO know that you are willing to seek a solution in court. Shernoff advises including the following sentence: “This appeal relates only to the denial of the benefits in question, but does not constitute, and shall in no way be deemed, an admission that I am limited in my right to pursue a ‘bad faith’ remedy in state court.”
Consider paying for the test yourself. Once you step outside your HMO’s network, your chances of getting reimbursed by your HMO are slim. But some conditions can’t wait for the appeals process or legal remedy. Ask your second-opinion doctor about the risks of waiting for the test or procedure, or how to research those risks. If they are high, go ahead and pay up.
File a complaint. Don’t look to state agencies for real help-they’re slow and lax. But you can extend your paper trail by filing a formal complaint with your state’s department of corporations or department of insurance.
Hire a lawyer. Ask a family attorney or your state’s bar association for the names of lawyers who specialize in “bad faith” claims or insurance matters.
Consider alternatives. If your employer offers an old-fashioned fee-for-service indemnity plan, consider switching. Your out-of-pocket costs may be higher, but you could stand a better chance of covering big-ticket medical costs. Remember: sooner or later, you or a loved one will probably experience a major medical emergency requiring specialized care–be prepared. As Hiepier puts it: “HMOs offer you free services that most people could actually afford, but deny you those treatments that none of us can afford.” So, design your coverage around the worst-case scenarios, not routine medical expenses. “When I signed up, HMOs seemed like a good way of avoiding deductibles,” says Moore from his Chicago apartment. “I’ve since discovered what cutting corners means.”
CORRECTION THE CAPTION ACCOMPANYING THE PHOTO of Nelene Fox’s family, who sued Fox’s HMO after she died (“Beware Your HMO,” Oct. 23), should have read: “Her family was later awarded $89 million in damages-but the jury verdict, the largest ever against an HMO, was vacated and the parties settled out of court.” NEWSWEEK regrets the error.
