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Last month, the LA Times reported that Blue Cross of California had agreed to change its position on policy cancellations, now making a distinction between those who make honest mistakes on application forms and those who fraudulently misrepresent themselves to obtain benefits. The Times predicted that the class-action settlement would "send shock waves" through the insurance industry.
The true test of the impact will be whether or not other insurers take the same stance. Blue Cross, which says it has rescinded less than 1% of new enrollments since January 2003, has pledged to: create a new form that will minimize applicants' mistakes; consult policy holders about application problems; review applications upfront; and assume the burden of proof when it suspects an application is fraudulent.
Business relationships between consumers and payers will only get tougher as consumers become less insulated from the financial stakes in healthcare. Sure, we want consumers to spend their healthcare dollars wisely, but those dollars also include premiums. Be prepared. I predict that consumerized healthcare users are going to push harder for friendlier policy language, easier forms and better benefit guidance. We wanted consumers, and well, now we've got them.
To find out more about what patients experience on the paperwork side of their healthcare, I called up Kathleen Hogue, the nation's first claim assistance professional (CAP). Hogue is an entrepreneur who began offering claims management services for patients in 1979. Her company, Mediform, takes the boxes and bags and envelopes full of EOBs off patients' dining room tables and manages them on patients' behalf. She is intimately familiar with everything from HIPAA to grievance procedures and has reconciled errors from duplicate billings to coding mistakes.
"If insurance companies really want to make things better, they need to see the third-party transaction from the patient's point of view," Hogue says. "They have no idea how indecipherable their explanation of benefit notices can be. I'd love to show some of the EOBs I see to the CEO of the insurance company and say, 'tell me what all this means.' I am virtually certain they would not be able to figure out their own notices."
It might be tough to be honest with ourselves, but I know of at least one plan that is seriously considering dismantling its EOB and turning it into a more patient-friendly outreach that would include notices of opportunities for money savings, such as through a generic prescription instead of a brand or by choosing a more efficient provider.
Hogue told me that several times in her CAP career she has predicted the demise of her business. "We're still here," she says. Last year, she spent much of her time helping clients find Medicare Part D plans, and the demand for CAP services is increasing.
She says consumers become overwhelmed by more complex cases because they encounter mostly routine claims in their lifetime. "And it has nothing to do with education level," she says. "People who come to me are careful managers. If they sense that their affairs are out of control, they do not like that feeling." She's met many people who have quit their jobs just to manage a spouse's healthcare affairs.
There are about 1,000 CAPs today, mostly small entrepreneurs. Hogue says today's broken system will probably keep her in business one way or another for quite some time.
Julie Miller is editor-in-chief of MANAGED HEALTHCARE EXECUTIVE She can be reached at firstname.lastname@example.org