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Unable to resolve your complaint
State's health insurance overseer can be as tame as a paper tiger
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A little more than a year ago, on Oct. 11, 2008, Joe "Kay" cut his hand while visiting his family in Green Bay.

"I was trying to open a jammed window and things went badly," recalls Kay, a Madison resident. "The cut was very deep, all the way down to the bone."

Kay, who asked that his real last name not be used, says the wound "wouldn't stop bleeding," so he went to the emergency room at St. Vincent's Hospital in Green Bay. He needed stitches, seven of them. The good news was that Kay had insurance, through Dean Health Plan, which ostensibly covered emergency room visits.

But Dean paid just $454.25 of his $1,100.70 bill and said the rest was Kay's obligation, in part because certain charges were considered "ancillary." Kay noted that these excluded charges were for the physician who stitched him up, which struck him as unfair: "The stitches were what I went in for, so I don't think they could possibly be ancillary."

Kay ended up paying the bill ($571.45, plus a $75 co-pay) but believed he deserved a refund. This June, after getting nowhere with Dean, he filed a complaint with the state Office of the Commissioner of Insurance (OCI).

"I was kind of hoping they would look at the contract [policy language], look at what I was saying and then make a qualified response: 'Joe, you're wrong, or Dean Care, you're misreading your contract or have a poorly written contract." He wanted the issue settled by someone "who knows insurance, knows the law, knows the market and has the authority to make a determination."

That's not what happened.

OCI, the state's watchdog agency overseeing insurance companies, instead took a passive approach. It sent the complaint to Dean and asked for a response. Then, as we'll see, it accepted whatever response was provided. The OCI staffer informed Kay, "Although I understand and appreciate the frustration that caused you to contact us, I am unable to resolve your complaint to your satisfaction."

It's a sentence that appears repeatedly in the 28 files produced in response to my request for all complaints lodged with OCI against managed care providers by Madison-area residents between July 1, 2008 and June 30, 2009. The office said it was unable to isolate health complaints for Preferred Provider Plans, or PPPs, but it could do this for HMOs. I read through the files at OCI's offices in downtown Madison.

It was a good sample to review: According to OCI, 291,026 Dane County residents were enrolled in HMOs as of Jan. 1, 2009. That's 60% of the population, by far the highest ratio for HMOs among Wisconsin's 72 counties.

One of the 28 complaints, I should mention, is my own. It concerns a claim denial, and confusing policy language. (For summaries of this and the 27 other complaints, see this article at It's not an especially notable complaint, and, based on information I obtained independently, after the OCI file was closed, I think the insurer was probably within its rights. But I was struck by OCI's lack of vigor and at one point quizzed the examiner, Marcia Zimmer, on the agency's role.

"Our responsibility as a regulatory agency is to make sure all insurance laws are complied with," she told me. "But we don't tell companies how to interpret their policy language. If it's a gray area, we let them decide."

Given the proliferation of gray areas on the modern health insurance landscape - rising co-pays, high deductibles, disputes over what is and isn't covered - that struck me as possibly problematic. Turns out it is.

Of the 28 complaints, in no instance did OCI instruct an insurance company to behave differently. That doesn't mean the companies never admitted mistakes or altered course, but they did so always of their own accord.

"The Office of the Commissioner of Insurance is a paper tiger," says local attorney Marilyn Townsend, one of the complainants who a few years back looked at OCI files. "It never really does anything to protect consumers."

That may be a bit harsh, and even Townsend is impressed that insurers respond when OCI asks. But in only one of these 28 cases did the office throw its weight around - and then, it was not against an insurer.

Responsive providers

The Office of the Commissioner of Insurance is charged with regulating all kinds of insurers: life, health, home, auto. Its 2008 budget is $15,376,000, all of which comes from fees charged to the companies.

The office tracks grievances filed directly with insurers, which they must report; in 2008, there were 2,911 grievances against HMOs statewide. The office also receives complaints sent to it directly, sometimes by customers frustrated by a company's response.

Annually, OCI gets about 8,000 complaints, half against health insurers. In 2008, it received 4,684 health complaints, including 368 against HMOs. The office has 21 staffers charged with handling health-related complaints, some of whom also handle other kinds of complaints. Of these, there are 10 front-line insurance examiners, with an average salary of just over $50,000 a year.

Eileen Mallow, OCI's deputy assistant commissioner, insists the office has ample authority to keep insurers in line: "If there's a violation, we can do some follow-up work. We can and would order them to change if we see a systematic violation."

OCI can and does discipline individual agents as well as companies. In August 2007, for instance, it fined Group Health Cooperative of South Central Wisconsin $5,000 for "failing to comply with a previous examination order."

But the four Madison-area HMOs (GHC, Dean, Physicians Plus and Unity) do not appear in the agency's lists of top offenders. Mallow is not surprised: "The Madison health insurance market is much different than the rest of the world. We still have local insurers, and they're generally more responsive to the consumers."

The yearlong history of citizen complaints I reviewed backs this up. In several cases, an insurer changed its initial decision after a complaint was filed, leading to a positive resolution.

For instance, in early February a young Madison man got ill after a spicy meal; he could not swallow and had trouble breathing. His father, J.M., took him to the nearest emergency room, at St. Mary's, where he received treatment. J.M.'s insurer, Physicians Plus, denied the claim because St. Mary's was not a "participating provider."

J.M. wrote Physicians Plus, with a copy to OCI: "I would hope those of you on the appeals committee that are concerned parents would, under similar circumstances, take your child to the closest available care."

OCI sent the insurer its form letter, asking it to respond to the complainant within 10 working days and to OCI within 20 days. Physicians Plus reviewed the matter and "decided [to] pay the charges at this time," except for a $100 co-pay. An OCI complaint specialist wrote J.M. to note this happy resolution - and lecture him on his responsibilities as a health insurance customer:

"When you enroll in an HMO plan, you agree to use participating providers for all covered services," the OCI staffer wrote. "[I]t is a good idea to become know [sic] which hospitals, urgent care centers, and clinics are participating providers in your area so you can use those providers whenever possible."

In cases where insurers do not change their minds, OCI seems to go along with whatever they decide.

Consider the complaint filed in March by Pamela Selje of Madison. She and her husband, Mark, each had health coverage for her daughter, his stepdaughter. (Full names in this article and complaint summaries online are used with permission.) But both companies refused to pay for the girl's urgent care visit in January, each saying it was the other's responsibility.

OCI sent the complaint to Pamela Selje's insurer, Physicians Plus, seeking its response. Physicians Plus concluded that Mark's insurer should pay, under the so-called birthday rule (assigning primary responsibility to whichever parent is born earlier in the calendar year.) The insurer's letter named two OCI staffers - "Julie Walsh and Michael Horneck of your office" - whom it said concurred with its conclusion.

Two months later, Physicians Plus reversed itself, apparently on its own accord. It now said that, because Mark never formally adopted the girl and Pamela was her natural parent, the bills were actually its responsibility. OCI spokesman Jim Guidry affirms that this latter interpretation is correct.

In other words, OCI seems to have concurred with both conclusions reached by this insurer, even though they were contradictory.

Limited authority

Clearly, there are statutory and practical limits on OCI's authority. It cannot, for instance, get involved in disputes over cost, even when the provider is the insurer, as is often the case with HMOs.

"We wouldn't regulate that, and I'm not aware of anybody who does," says Mallow. "I'm not aware of any regulation or state law that speaks to what a health provider can charge for services."

Nor can OCI enforce standards regarding quality of care. Here, says Mallow, it might make referrals to the appropriate licensing body - like the Medical Examining Board in the case of physicians.

But even when it does have regulatory authority, OCI seems reluctant to throw its weight around. Mallow notes, for example, that with regard to explanations of charges and benefits, "We do have some regulations on how clear those have to be."

That might come as a surprise to Peter Anderson. The Madison resident complained to OCI in March that the billing statements used by his insurer, Physicians Plus, "are written too cryptically to understand the particular health claim involved and, in the case of denials, the reasons for the denials."

Anderson, the founder of Wisconsin's Environmental Decade and owner of Recycle Worlds Consulting, asked OCI to make the insurer provide statements he could understand.

OCI sent its form letter. Cathi Willette, the Physicians Plus complaint point person, promised in reply that the insurer would immediately "review the entire issue" and update its statements "to provide more clarity and specificity for our members." She also said her review of Anderson's billing statement showed a $106.20 charge had been "denied in error." Apparently, Anderson did not grasp the reason for this wrongful denial enough to contest it.

In closing its file on the matter, OCI told Anderson it has "limited authority" in cases like these, where no insurance law or regulation has been violated. It did not check to see what became of the insurer's promised review.

Willette, in a statement, says privacy laws prevent her from commenting on a particular complaint or even confirming its existence. But she maintains that Physicians Plus welcomes feedback from members and has "made some changes and updated some of the language" on the "narratives" for its explanation of benefits.

Anderson hasn't noticed any changes. He reads from his most recent billing statement, dated July 31: "Line 1 says '12495 other,' Line 2 says 'E073 other.'" What do these mean? Anderson has no idea and says "there's no way to find out without spending hours on the phone."

The experience left Anderson feeling bitter toward OCI: "The staff had zero inclination to make any logic out of the system." The office, from his perspective, "doesn't do anything except say it isn't going to do anything."

In April, local attorney Marilyn Townsend had a similar experience. She filed an OCI complaint challenging the decision of her insurer, Unity, to begin adding a $10 monthly "paper fee" for people who want to keep getting bills by mail, as opposed to email.

Unity's rationale, explained in a letter, was "to help reduce the amount of paper mail you receive and help bring wellness to the environment." Townsend, who deemed this a ploy to get her email address, argued that Unity should offer a discount to those who agree, not impose a fee on those who don't. She also noted that adding this fee increased her monthly statement from one to two pages: "So much for its alleged attempt to save paper."

Unity decided on review to uphold the billing fee. OCI used its boilerplate language to tell Townsend it was "unable to resolve your complaint to your satisfaction," adding, "There are no laws regarding companies charging billing fees."

Townsend, who feels the cost of being billed ought to be covered by her premiums, is displeased with OCI's role. "They never came to grips with the issue I was complaining about," she says. "Someone over there should have said to Unity: 'This doesn't make sense. You haven't demonstrated that you are entitled to this.'"

What would happen if an insurer decided to charge its customers, say, $200 a month extra for the privilege of being billed? "We would question it," says Mallow. But she adds that the agency's authority to intervene would be limited. "We don't regulate the rates that are charged by insurers."

Coverage denied!

Some of the most urgent complaints filed by Madison-area residents with the Office of the Commissioner of Insurance deal with denials of coverage, for patients and procedures.

This is an area President Barack Obama's health care agenda promises to address, by forbidding insurers from cherry-picking only healthy customers and requiring them to offer mandated minimum benefits.

At present, companies selling individual coverage are free to deny coverage due to preexisting conditions. As OCI told Madison resident Emily Steinnagel, who complained after being turned down by Dean Health Plan due to a history of headaches, "Companies may decide not to insure an individual, charge an extra premium, or place an exclusionary rider on the policy for a particular medical condition."

The state does mandate some minimum benefits that health insurers must provide. But beyond that, the companies have wide latitude to disallow certain kinds of treatment. Mallow offers this somewhat grim prognosis: "Yes, you may need a heart transplant, but if you have a policy that excludes heart transplants, the company's not going to pay for it."

Just ask Dawn Williams. The DeForest resident complained to OCI in February that her insurer, Physicians Plus, was refusing to cover "the bariatric Lap Band Surgery I requested." Williams suffers from severe arthritis and needs a total knee replacement; her doctors say she must lose 100 pounds before this surgery can be performed. But "I cannot lose weight because I cannot move around, let alone exercise because of the knee pain."

Williams even included letters from two UW Health physicians, supporting her need for this surgery.

OCI sent Williams' complaint to Physicians Plus. The insurer reviewed the matter and decided to reaffirm its denial, telling OCI: "[E]ven though the issue was not resolved in favor of Ms. Williams, it has been resolved."

OCI examiner Marcia Zimmer agreed, telling Williams there was nothing more she could do.

Williams, who continues to suffer from knee problems that make it difficult to walk, says she's still fighting to get OCI to take her side. She's disappointed with what the office has done so far: "It was just shuffled-through paper, pushed through the process. They need to step in and say, 'Hey, what can we do?'"

In another case, OCI declined to challenge a denial that came on the heels of an approval. In July of 2003, Madison resident R.H. tore his calf muscle and was advised to get a custom molded ankle brace. He first checked with his insurer, Group Health Cooperative, which sent him a letter dated Dec. 11, 2003, stating: "This APPROVAL letter confirms AUTHORIZATION for the services outlined in this referral," the custom molded ankle brace.

But after R.H. picked up the brace, he was told that his employer had notified GHC on Dec. 12 that it was terminating his coverage as of Dec. 6. R.H., who received an $818 bill, protested to OCI.

GHC said the brace was procured after R.H.'s "termination of coverage date." It noted that its Dec. 11 letter of "APPROVAL" and "AUTHORIZATION" says "This referral is not a guarantee of your eligibility or benefits under your health plan."

OCI told R.H., who presumably complained years later because of ongoing collection efforts, that there was no apparent violation of any insurance law or regulation and thus nothing it could do.

An abundance of gray

Scott Wieland of the Waunakee-based Murphy Insurance Group, which helps employers pick health insurance plans, notes that increases in premiums in recent years "have put a burden on employers to make tough decisions. One way that many employers have been able to lower premiums is to add higher co-pays, deductibles and co-insurance to the plan design."

But more comprehensive coverage may still apply to emergency and preventative care. This has led to new tussles about how these services are defined - an abundance of gray areas. And OCI seems to be letting the companies decide.

Perhaps the best example among the 28 complaints is the case of Joe Kay, mentioned above. His insurer, Dean Health Plan, disallowed a major part of his ER bill for a hand injury that required seven stitches as being for "ancillary services."

Kay's complaint was assigned to Barbara Belling, OCI's managed care specialist, who Mallow says has special "authority and time to work with consumers. She's the person who can call and find out what's going on."

Belling forwarded Kay's letter to Dean and asked it to respond. Dean complaint specialist Kelly Hagenbuch said the company on review upheld the denial, as the claims were processed correctly. She never explained what services were deemed "ancillary" or rebutted Kay's assertion that these were for the stitches themselves.

Insurance policies are legal contracts, subject to varying interpretations. And, according to Mallow, "We do have authority to go back and demand that the company provide a better explanation."

That was not evident in how OCI handled Kay's complaint.

In her "unable to resolve your complaint" letter to Kay in late June, Belling noted that Dean "is continuing to maintain that it paid the claims for emergency care you received correctly." She saw no apparent violation of an insurance law or regulation, but did advise Kay, "You may wish to consult an attorney or seek a resolution through Small Claims Court."

In July, Kay protested to Dean again, with a copy to OCI. "It does not make logical sense," he wrote, "that the very services actually rendered to remedy the emergency are 'ancillary.'"

Hagenbuch wrote back, and again did not explain what services were considered ancillary. Her letter cited policy language that ancillary services "may include, but are not limited to" a list of things. Stitches were not on this list, but perhaps they fell under "but are not limited to."

Dean declines to elaborate. Says spokesman Pete Thompson, "The HIPAA privacy rules prevent us from talking about member cases."

Belling wrote Kay to say there was nothing more OCI could do, closing her letter with a standard line: "Thank you for bringing this matter to our attention. Your complaint is helpful to us in monitoring the insurance industry in Wisconsin."

Kay, looking back, thinks the office is reluctant to mix it up with insurers. "Why would they want to rock the boat?" he asks. "If they [OCI] can make me go away, that's sort of in their best interest." He thinks the agency sees its role not a protector of consumers but as "a sounding board, a place for people to air their complaints."

Keep complaining

In fact, serving as a sounding board is a legitimate function. The Office of the Commissioner of Insurance provides a process through which people can file complaints, which it tabulates and archives.

"It's a great service," one of the complainants I contacted told me. "They make the insurance companies respond. Otherwise, if you go to the insurance company they dismiss you."

This complainant, with the coincidental initials E.R., felt he should not have been charged a co-pay for his wife's emergency room visit. He noted that this charge would have been waived had she been admitted for more than 24 hours, and claimed this did not occur only because the hospital did not have room.

The insurer, Group Health Cooperative, said the claim was handled correctly. But OCI examiner Marcia Zimmer twice pressed it for additional documentation.

It was an unusually aggressive response, perhaps prompted in part by the opening lines of E.R.'s complaint: He said a GHC rep told him his complaint would be dismissed by OCI and "will only result in insurance premiums costing more for everyone."

In the end, though, Zimmer accepted GHC's assurances that the hospital had extra rooms; she informed E.R. that there was nothing more she could do.

Of the 28 cases I reviewed, there was only one in which the stance taken by OCI seems to have forced a change in outcome. That concerned a complaint filed last November by a Madison resident with the initials A.F.

In April 2008, UW Hospital refused to schedule a test for A.F., saying she owed it money. It emerged that the hospital had mistakenly sent the bill for an ER visit in 2004 to the wrong insurer. Later, the correct insurer refused to pay, saying it was billed too late. UW Hospital assigned the matter to a collection agency.

In a file notation, OCI insurance examiner Glen Navis said he "argued" with a supervisor at UW Hospital. The next day, the hospital "decided to write off this $600 bill" and tell the collection agency to back off. The complainant got a satisfactory result, but for an ironic reason: OCI, the state's regulator of insurers, successfully pressured a provider to let an insurance company off the hook.

In another case, OCI has apparently failed to act despite an affirmative finding of wrongdoing. A complaint filed in February by Madison resident G.C. alleged that an agent for the HMO UnitedHealthcare of Wisconsin made false claims. The insurer, in a six-page response to OCI dated March 18, detailed the findings of its investigation.

The company concluded that its agent made several incorrect representations and ordered remedial training. The OCI classifies the outcome as "Disciplinary action recommended," but the file gives no sign it's being pursued. OCI spokesman Guidry says "our investigation is still going on."

Despite such outcomes, OCI officials hope the complaints keep coming in. "People should not be hesitant to file a complaint," says deputy commissioner Kim Shaul. Adds Mallow, "Chances are if it's happening to one person, it happens to more than one."

But citizens who have seen OCI in action may be moved to take steps other than complaining. Joe Kay says that, over the summer, he cut his hand again, badly. This time he decided against seeking medical help, based on his past experience: "I said screw it, I don't have $1,000."

Kay's hand healed okay; his reticence about seeking health care remains: "I'm afraid to go to the doctor."

All things considered, that's not an irrational fear.

Tales from the files
What follows are brief synopses of some of the complaints against HMOs filed by Madison-area residents with the state Office of the Commissioner of Insurance (OCI), in addition to those mentioned in our main article.

Complaint 198830: Fitchburg resident T.F. alleges that his insurer, Unity, broke state law in notifying subscribers of an amendment excluding coverage for bone-anchored hearing aids, while assuring them elsewhere that "no changes have been made to your benefits." OCI asks Unity for its response; the company says these hearing aids were always excluded and its amendment was just meant to clarify. T.F. calls this "doublespeak": "If the existing policy already excluded the hearing aid, there would be no need to issue an exclusionary amendment." OCI, seeing no violation of any law or regulation, closes its file on the case.

Complaint 201409: Madison resident J.P. complains that his 21-year-old son cannot get health coverage through dad's Group Health Cooperative policy because he has a low-paying part-time job with health benefits. Asks J.P., "Do you have any idea what percentage of his income has to go toward paying his part of the premium?" GHC replies that its dependent coverage provisions "are, in general, more generous than many other group health plans" but promises to discuss the issue at its annual benefits review meeting. OCI says there's nothing more it can do.

Complaint 202008: Madison resident Sandra Endlich complains that, after three years of problems, she was diagnosed with thyroid disease; her insurer now says she must wait five months to see an endocrinologist. The insurer, Dean Health Plan, apologizes for the delay and schedules an appointment for only three months hence and puts Endlich on a list in case of cancellations. OCI, saying its review of the response "indicates your complaint has been resolved," never suggests that a wait of any duration to see this specialist would be too long. Endlich says that after experiencing additional complications she "made a nuisance of myself" until she was allowed in sooner.

Complaint 206418: Dennis Gordon of Madison had health insurance through his employer - or so he thought. But after he was hospitalized with a hip fracture in February 2007, he learned that his coverage, through Physicians Plus, had been terminated some months before, when his employer stopped paying. Gordon was left with more than $17,000 in bills and damaged credit. OCI does not take action or pursue changes to require insurers to notify customers directly when their policy has been terminated. Says Gordon of the agency's role, "They sent me a letter saying a few things and that was it."

Next week: The UW Center for Patient Partnerships

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