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?
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.
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