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Macmillan Childrens Publishing Group

Making Them Pay

How to Get the Most from Health Insurance and Managed Care

Rhonda Orin

St. Martin's Griffin


Making Them Pay: How to Get the Most from Health Insurance and Managed Care

It's time to get down to business--and that means learning the nuts and bolts of health plans. I hate to say it, but you just can't avoid this part. Whether you are trying to pick a health plan or to figure out if something is covered under the one you've got, you need to know how to read a plan.
This chapter is about learning an approach--nothing more than that. The approach is one you should follow with any health plan (and, to a certain extent, with any contract at all). You should follow this approach to figure out if you're covered for anything--from open heart surgery to childhood immunizations. This is basically the same approach that a Supreme Court justice would follow, or a claims examiner at your insurance company for that matter. As far as I can tell, it's the only way to do it.
The first step is simply to find all of the important sections. Don't try to study them in any detail, or spend any time figuringout what they mean. At this point, just finding them is enough; you'll do the rest in Steps Two and Three.
Believe me, finding the key sections is not as easy as it seems. While all health plans contain the same basic sections--like benefits, exclusions, definitions, and so on--each plan seems to put these sections in a slightly different order and to use different titles and terms. Learning how to find them all is more than enough for Step One.
To figure out the structure of your plan, it's best to work with an example. Let's say you have allergies, and you want to know if they're covered under your health plan. Let's say that your health plan is the composite one that's set forth in Appendix A.
By the way, I created this composite, rather than using an actual plan as an example, because I wanted to show that this approach works for all plans, not just for a particular one. This composite is an HMO plan with a Point-of-Service option, meaning the right to see doctors outside the plan, and to submit the bills for reimbursement the old-fashioned way. Its text, and its basic format, is drawn from a number of actual plans.
This composite may seem much more detailed than the materials you've been given about your own plan. Sometimes people have nothing more in their files than one- or two-page summaries of their benefits, usually in a column format. If that's all you have, you're entitled to much more information--and you definitely will need it in order to understand your coverage. Accordingly, it would be a good idea for you to contact your employer or your insurance company and ask for a copy of the entire contract and/or a short version known as the Summary Plan Description or SPD.
By now you know that your first step is just to locate all the important sections, starting with the Benefits. You also know that you're learning an approach--you're certainly not learning whether or not a particular condition actually is covered under a particular health plan.
In fact, if you want to do a quick test of your insurance knowledge, turn to the composite plan in Appendix A right now and see if you can identify all of the sections that relate to allergies. Then, return to this chapter and see if there were any that you missed.
For everyone else, let's get started.
It's pretty easy to find the Benefits section in your health plan. It starts at the end of the plan's seventh page. (Remember what I said in the Introduction about not starting on page I?) In fact, you'll find five entirely different Benefits sections. They are labeled as (1) Medical and Surgical Benefits; (2) Hospital/Extended Care Benefits; (3) Emergency Benefits; (4) Mental Conditions/Substance Abuse Benefits; and (5) Prescription Drug Benefits.
Before we're done, I'll end up suggesting that you skim through all five of these sections. For starters, though, you should focus on the Medical and Surgical Benefits subsection. When you turn to it, you'll find a page that looks like this:
A. What Is Covered
A comprehensive range of preventive, diagnostic, and treatment services is provided by Plan doctors and other Plan providers. This includes all necessary office visits; you pay a $5 office visit co-pay, but no additional co-pay for laboratory tests, X rays, and prenatal office visits. You pay nothing for well-child care for children under five years of age. Within the service area, house calls will be provided if in the judgment of the Plan doctor such care is necessary and appropriate; you pay nothing for a doctor's house call, or home visits by nurses and health aides.

The following services are included and are subject to the office visit co-pay unless stated otherwise.
Preventive care, including well-baby care and periodic check-ups (co-pay waived for well-child care for children under age five)
Voluntary sterilization and family planning services
Diagnosis and treatment of diseases of the eye
Allergy testing and treatment, including testing and treatment materials (such as allergy serum). You pay nothing. [Emphasis added.]
The insertion of internal prosthetic devices, such as pacemakers and artificial joints
Cornea, heart, heart-lung, kidney, liver, lung (single and double), pancreas and pancreas-kidney transplants; allogeneic (donor) bone marrow transplants; autologous bone marrow transplants (autologous stem cell and peripheral stem cell support) for the following conditions: acute lymphocytic or nonlymphocytic leukemia, advanced Hodgkin's lymphoma, advanced non-Hodgkin's lymphoma, advanced neuroblastoma, breast cancer, multiple myeloma, epithelial ovarian cancer, and testicular, mediastinal, retroperitoneal, and ovarian germ cell tumors. Transplants are covered when approved by the Plan Medical Director. Related medical and hospital expenses of the donor are covered when the recipient is covered by this Plan.
Women who undergo mastectomies may, at their option, have this procedure performed on an inpatient basis and remain in the hospital up to forty-eight hours after the procedure.
Dialysis; you pay nothing
Chemotherapy and radiation therapy; you pay nothing
Inhalation therapy
Surgical treatment of morbid obesity
Orthopedic devices, such as braces; foot orthotics, including replacement or adjustment limited to that necessitated by the member's physical changes or growth

The section continues, and you should skim the whole thing, but you've already found what you were looking for inthe highlighted section: "Allergy testing and treatment, including testing and treatment materials (such as allergy serum). You pay nothing."
In isolation, it sounds great, but nothing in an insurance policy is in isolation. So turn back to the introduction to this list of benefits and read it again--very slowly and very carefully.
Sure enough, you bump right into a hidden qualification. Before you continue reading, see if you can find it for yourself. Here are the key sentences:

A. What Is Covered

A comprehensive range of preventive, diagnostic, and treatment services is provided by Plan doctors and other Plan providers. This includes all necessary office visits; you pay a $5 office visit co-pay, but no additional co-pay, for laboratory tests, X rays and prenatal office visits. You pay nothing for well-child care for children under five years of age. Within the service area, house calls will be provided if in the judgment of the Plan doctor such care is necessary and appropriate; you pay nothing for a doctor's house call, or home visits by nurses and health aides.

If you pointed to "all necessary office visits," you win the prize. This is a major hole. It basically means that someone has to decide your office visits were "necessary" for there to be coverage. And that person--whoever it is--might not see eye to eye with you (or even with your doctor) about what exactly is "necessary."
But for now, let's say you hit the jackpot. Your primary care doctor decides you have allergies that require treatment. So he or she refers you to an allergist and you start treatment, right?
Not so fast. All you get, at this point, is one or two visits with an allergist. If you want to stay within the HMO and avoid paying for a percentage of the visits yourself, the basic plan is for your primary care physician to stay in charge of yourcare. And--this is the deal whether or not your primary care physician knows boo about allergies.
The words that set this limitation are hidden away in my favorite section, the innocent-sounding one called Facts About This Plan:

3. Referrals for Specialty Care

Except in a medical emergency, or when a primary care doctor has designated another doctor to see patients or when you choose to use the POS benefits, to receive standard HMO benefits you must contact your primary care doctor for a referral before seeing any other doctor or obtaining special services. Referral to a participating specialist is given at the primary care doctor's discretion; if specialists or consultants are required beyond those participating in the Plan, the primary care doctor will make arrangements for appropriate referrals.
When you receive a referral from your primary care doctor, you must return to the primary care doctor after the consultation unless your doctor authorizes additional visits. For standard HMO referrals, all follow-up care must be provided or arranged by the primary care doctor. On referrals, the primary care doctor will give specific instructions to the consultant as to when services are authorized. If additional services or visits are suggested by the consultant, you must first check with your primary care doctor. Do not go to the specialist unless your primary care doctor has arranged for and the Plan has issued an authorization for the referral in advance.

If you are "lucky" enough to be really sick, though, your primary care physician has the power to turn over your care entirely to the allergist. The words that give him or her this power appear at the end of this section:

If you have a chronic, or serious medical condition that causes you to see a Plan specialist frequently, your primary care doctor will develop a treatment plan with you and your health plan that allows an adequate number of direct access visits with that specialist. The treatment plan will permit you to visit your specialist without the need to obtain further referrals.

This sounds good, but you should appreciate that behind the scenes at HMOs, various incentive structures--or penalty provisions--may keep your doctor from acting on this provision. HMOs keep records of everything done by their primary care doctors, and many of them assert liberal rights to remove doctors from their plans. So no matter how sick you are--and certainly if you're a borderline case--there are a lot of reasons why you may not be given the right to unlimited visits. (Some insight into your doctor's perspective is set forth in Step Two.)
Before moving past the Benefits section, take a minute to skim each of the other subsections. You'll need to see if there is anything specific to allergy coverage there, since there may well be. Prescription coverage, for example, can be valuable for someone with allergies, and some plans specifically refer to allergy medications in these sections. Similarly, emergency care and hospitalization can be important issues, especially for someone with a potentially acute allergic condition like severe asthma.
Your quick check should show that there are no specific provisions about allergies in these other subsections. You'll still need to look them over, as discussed in Step Two. But for now, it's time to move on to the Exclusions.
Exclusions are found all over health plans. Usually, they appear in the Table of Contents, under a heading called Exclusions. But they are also found in many other locations, and under many other headings. Watch out--especially when you're deciding which health plan to buy.
This particular health plan lists General Exclusions on the seventeenth page. This section is all of three inches long. Ifyou didn't know better, you might think that this health plan doesn't have many exclusions. Boy, would you be wrong.
This is the entire General Exclusions section:
The exclusions in this section apply to all benefits. Although we may list a specific service as a benefit, we will not cover it unless your Plan doctor determines it is medically necessary to prevent, diagnose, or treat your illness or condition as discussed under Authorizations. We do not cover the following:
Care by non-Plan doctors or hospitals except for authorized referrals or emergencies (see Emergency Benefits) or eligible self-referral services obtained under Point-of-Service Benefits;
Expenses incurred while not covered by this Plan;
Services that are not required according to accepted standards of medical, dental, or psychiatric practice;
Procedures, treatments, drugs, or devices that are experimental or investigational;
Procedures, services, drugs, and supplies related to sex transformations; and
Procedures, services, drugs, and supplies related to abortions except when the life of the mother would be endangered if the fetus were carried to term or when the pregnancy is the result of an act of rape or incest.

You won't need to pay attention to the last three exclusions. The allergy coverage that you are looking for is not experimental, and definitely does not require a sex transformation or an abortion. But the first four exclusions--which are much more general--are a different story.
These exclusions make clear (sort of) that you're going to have trouble getting coverage if you see an allergist who is not on the plan. They also repeat--twice--the same "necessary" limitation that was hidden in the Medical and Surgical Benefitsintroduction. This limitation appears in the introduction to this section: i.e., a service that is listed as a benefit "will not be covered for you unless your Plan doctor determines it is medically necessary ... ." It reappears in the exclusion for "Services not required according to accepted standards of medical, dental, or psychiatric practice."
Guess what? Because of this limitation, you can't be sure that the allergy coverage you're looking for is covered under this plan. There's a fatal trap in the words "according to accepted standards of medical, dental, or psychiatric practice." Words like these usually mean "according to the symptom lists that this insurance company hands out to its employees, for use in evaluating claims." Since you don't get to see these lists, you don't know what they say--and you certainly don't know whether your symptoms are enough to get you the coverage that you want.
Just for the heck of it, it would be a good idea to call up your health plan and ask for its symptom list--or whatever they call it--for allergies. Most insurance companies don't release this kind of information readily, but maybe you'll get lucky.
Having exhausted the General Exclusions section, it's time to hunt around for other exclusionary language. You won't have to look far. Each of the five Benefits subsections has a section called What Is Not Covered. You won't find these sections in the Table of Contents, and they're not called Exclusions, but they nevertheless have the power to defeat your claim for health coverage. So you better find them all.
The What Is Not Covered part of the Medical and Surgical Benefits section looks like this:

C. What Is Not Covered
Physical examinations that are not necessary for medical reasons, such as those required for obtaining or continuing employment or insurance, attending school or camp, or travel

Dental implants

Reversal of voluntary, surgically induced sterility

Surgery primarily for cosmetic purposes

Homemaker services

Hearing aids

Transplants not listed as covered

Long-term rehabilitative therapy

Cardiac rehabilitation

Chiropractic services

Organ-donor-related transportation expenses

Acupuncture services

Blood and blood products

Treatment of obesity and weight reduction programs (except for surgery for morbid obesity)

Radial keratotomy and similar surgical procedures to correct refractive error
If you want allergy coverage, you're basically okay. There's no exclusion here that relates directly to allergies. But there could have been--and it would have been a mistake not to look.
When you've finished reviewing your plan's exclusions, are you finished looking for language that can defeat coverage? Nope. Now you have to start looking for hidden exclusions--ones that call themselves limitations, definitions, and so on.
In fact, if you ever see a health plan that doesn't have many exclusions, start looking for a section with the word Limitations in it. That's probably where you'll find the usual exclusions, dressed up in other clothes.
Your health plan is no exception. The very first sentenceof the General Limitations section contains this indirect exclusion:

A. Important Notice

Although a specific service may be listed as a benefit, it will be covered for you only if, in the judgment of your Plan doctor, it is medically necessary for the prevention, diagnosis, or treatment of your illness or condition.

Here's that "medically necessary" business again. And you'll find it also in the Authorizations section:

4. Authorizations

The Plan will provide benefits for covered services only when the services are medically necessary to prevent, diagnose, or treat your illness or condition. Your primary care doctor must obtain the Plan's determination of medical necessity before you may be hospitalized, referred for specialty care, or obtain follow-up care from a specialist.

In fact, this particular version of the "medically necessary" exclusion adds something new to the mix. It makes clear that your own doctor's opinion about what is "medically necessary" is not the one that counts. What counts is what "the Plan" thinks.
"Medically necessary" appears so many ways and in so many places because medical necessity is what managed care is all about. In fact, a "medically necessary" requirement is increasingly becoming part of even the traditional, pick-your-own-doctor insurance plans. Health plans "manage care"--and thereby costs--by limiting their payments to services, procedures, treatments, and medications that are "medically necessary." The problem is that these same health plans have a financial interest in deciding that things are not.
Health plans typically promise that all decisions about medical necessity are based on neutral and scientific criteria,assessed by experienced personnel in a balanced fashion. But, at the same time, they typically are closemouthed about both the criteria used and the mechanics of the decision-making process. This closemouthed approach, especially when combined with their financial interest in saying no, leads to a lot of controversy.
Your next step is to look for a Definitions section, because this is a favorite place for hiding exclusions. In this particular plan, the section appears at the end. Numerous definitions in this section may have bearing upon your allergy problems, including the definitions of "Medical Emergency," "Medically Necessary," "Precertification," "Preexisting Condition," and "Reasonable and Customary." Be smart, and read them all.
When you're done skimming the entire plan for hidden exclusions, you can return to the original question: are your allergies covered? Your answer, at this point, is the same--yes, at least to some extent--as long as you can overcome the initial barriers of "medical necessity."
Conditions are different from hidden exclusions. They basically involve mistakes that you can make, that can keep you from getting the coverage offered by the plan. Probably the most vilified condition, which is found in many plans, is the requirement that you must call the plan for authorization before you head to an emergency room, or at least within a certain number of hours of your visit.
These conditions can be traps for the unwary. You forgot to call? You lost your coverage. You were distraught because your two-year-old daughter was deathly ill with meningitis? We understand, but it was your duty to call. The hospital bill is prohibitive? We're so sorry. It's too bad you forgot to call.
Conditions can be even harder to find than limitations.The plan we're studying, for example, doesn't contain a single section called Conditions, or any variation of the term. But read the plan carefully--you'll find them.
Here's a great example of a camouflaged condition. It's back in that section called Facts About This Plan:

4. Authorizations

If you require hospitalization, your primary care doctor or authorized specialist will make the necessary arrangements and continue to supervise your care.

Get it? It's hard to see. The condition is that you can't go an emergency room unless you first get permission from one of your doctors on the plan.
Start Laughing--or You'll Start Crying
So you've decided to take charge of your health insurance problems. You've looked over your plan and found that you really can't tell whether it covers something you happen to care about. You've decided to telephone your insurer and ask for an explanation, instead of just sighing and sticking the plan back under the TV. What do you do first?
Get a cup of coffee.
I'm serious. And don't stop there. Before you dial, you should also do the following. Put together some reading material, or paperwork, or whatever you care to do. Make a trip to the bathroom. Get a pen and paper handy. Take care of anything that absolutely must get done in the next half hour or so, like picking up children at school, or calling your staff.
The point is that the phone call is going to annoy you. It will take too long. You'll be trapped until it's over. No one will understand your questions. You may be confused, infuriated, or enraged by what you're told. You may, after an hour on the phone, accomplish absolutely nothing, and be told that you need to call a different department the next day.
Because you can't do anything about these problems, you might as well fix the ones you can. Make yourself comfortable before you call. Get something productive done while you're a prisoner on hold. And don't get boxed in with other time commitments that will make you even crazier, as the minutes slip away.
And, most important of all, get your attitude in the right place. You know you're headed into frustration. So mellow out, accept the inevitable, and look out for the humor in the situation.
You know, I've got a lot of things to do besides call my insurance company. Like buy groceries and empty the dishwasher; like take depositions and go to court; like look over homework and play with my children; and maybe, someday, take a nap. If I thought about it, I could get quite angry about the amount of time I have to spend keeping my insurance company from keeping my money.
So--I've just decided not to think about it. Because getting angry would only make it worse. Some things have to get done, whether you like it or not. Paying taxes is one of them. So is fighting with insurance companies.
The way I see it, there are three choices. You can get angry. You can get ripped off. Or you can take on your insurance companies and make a game out of it.
I prefer the third way. Try it--you may like it too. Not only can it do incredibly important things, like save your money and get much needed health care for you and your loved ones, it also can keep you sane.
The condition is explained further in the Emergency Benefits section. There the plan gives you the option of going straight to a hospital in "extreme emergencies, if you are unable to contact your doctor ... ." Be very careful, though. You and the plan may have different opinions about what is "extreme." You may also disagree about how hard you were supposed to try--in the middle of the crisis--to contact your primary care doctor.
This condition won't help you to figure out whether you have allergy coverage. But if you do pick this plan, knowing about this condition can make the difference between coverage or no coverage if you ever find yourself gasping for air during an allergy-triggered asthma attack.
One more question--what do you do if your primary care physician won't let you see an allergist as much as you like? If you're in a straight HMO, you're out of luck, unless you have a lot of money to spend on uncovered health care. This particularhealth plan, though, offers a Point-of-Service (or POS) option, which means that you can see an allergist anyway, and still get some benefits, by going off the plan.
A POS option enables you to do what the insurance industry calls "self-refer." This fancy term basically means: see a doctor who's not a part of the HMO even though your primary care physician hasn't sent you there.
To analyze a POS option, you need to review its terms the same way you did before. So turn first to its entirely separate Benefits section. Under Medical and Surgical Benefits, you'll find the following:

At your option, you can choose to self-refer for the following services instead of getting a referral from your primary care physician. You pay 20 percent of the allowed benefit after the deductible.
Physician office, home, or hospital visits

Specialist care and consultation

Allergy testing and treatment [emphasis supplied]

Maternity, annual pap smears, and pelvic exams

Diagnostic laboratory and X-ray tests

Surgical procedures (preauthorization required)

Periodic physical exams, immunizations, and well-child care

Physical, speech, or occupational therapy

Home health care (preauthorization required)

Durable medical equipment, prosthetics, and orthopedic devices (preauthorization required)

Hearing and vision exams

Family planning and sterilization

Dialysis, chemotherapy, radiation therapy, and inhalation therapy

Infertility services (preauthorization required)
You found what you were looking for in the highlighted third line: "Allergy testing and treatment." But you know now to keep looking for hidden problems. First, you note the absenceof the following words that happen to be found in the HMO part of the plan: "including testing and treatment materials (such as allergy serum)." Since you now know that words in a health plan usually are not missing by accident, you make a mental note that if you go to an allergist off the plan, you may have a hard time getting these materials covered.
Next you check the section called What Is Not Eligible for Self-Referral and find nothing of any consequence. Then you skim the other Benefits sections, just to be safe, and discover--as you might have expected--another potential limitation on allergy medicine:

6. Other Covered Benefits

Prescriptions written as a result of a self-referral to a doctor are eligible for a $5 co-payment for a thirty-four-day supply as long as they are filled at a Plan participating pharmacy. If a nonparticipating pharmacy is used, you pay 20 percent of the allowed benefit after the deductible, and any cost in excess of the allowed benefit.

That's good to know. And you know to keep looking for more. So you search for exclusions, conditions, and limitations, but curiously find none in the two-page POS section. Do you conclude that there are none? No way! Instead you start searching the small print that introduces the section, looking for these limitations and perhaps others.
You'll find something important in the last paragraph of the section headed Facts About the Point-of-Service Benefits. That paragraph states:

Benefits under the Self-Referral Program are subject to the definitions, limitations, and exclusions shown elsewhere in this brochure. The Plan determines the medical necessity of services and supplies provided to prevent, diagnose, or treat an illness or condition [emphasis supplied].

Now you know that you're in the same position outside the plan that you were in the plan with regard to these limitations.And, if you read the small print carefully, you know something else as well.
The second to last paragraph of this same section--the one just before the paragraph quoted above--contains another critical, but hard-to-see, limitation about out-of-network benefits. It threatens to dominate your finances and severely restrict the out-of-network benefits that you think you're about to receive.
Here's the paragraph:

An allowed benefit is the acceptable charge that the Plan uses to calculate the reimbursement to a health care provider that is not under contract with the Plan. The member is responsible for any amount that exceeds the allowed benefits determined by the Plan, plus the stated coinsurance payment.

Standing alone, this paragraph looks innocuous. It doesn't even look like a restriction on coverage. But it is--a big one.
This definition relates directly to all of the benefits sections in this self-referral program, with the exception of the Emergency Benefits. (That's because this plan does not offer Emergency Benefits on a self-referral basis.) Each of these sections state that you must pay 20 percent of the allowed benefit, and implies that the plan will pay the other 80 percent.
On a first reading it may look to a layman as if the plan will pay 80 percent of what he or she is billed by an out-of-network doctor. Not so. The plan will only pay 80 percent of what the plan decides is an "acceptable charge" for the service. That, of course, is after the patient pays the deductible.
And what does the plan think is an "acceptable charge" for out-of-network allergy treatments? This seems to be a state secret, never to be released to anyone--and certainly not to policyholders who will be asked to pay the difference. This "acceptable charge" concept takes many forms in insurance industry lingo. Perhaps the favorite for insurance companies--and the most irritating for policyholders--is the generic, meaningless "usual and customary charges" or UCR. "Reasonable and customary charges" is another popular term.
You can and should do your best to discover what charges your plan deems "acceptable" before you visit an off-the-plan allergist and start a course of treatment. Otherwise you will not know what the plan will pay until after you undergo the treatment, submit the bills, and have large chunks of them mysteriously rejected, based on unexplained pronouncements of what is "acceptable."
There are certain basic distinctions among health plans. The most important one probably is the source of the plan. If you went out and bought the plan for yourself, you probably have an "individual" plan. If you got the plan through your employment, you probably have a "group" plan, which may be distinguished further by designations based on the size of the group, such as Small Group Plan. If you work for the federal government, you probably have a special type of group plan: one that is part of the Federal Employees Health Benefits Program, also known as FEHBP. If you're a senior citizen, the source of at least one of your plans is Medicare, which is part of Social Security. You also may have a private plan that is designed to fill the gap of whatever Medicare does not cover, commonly known as Medigap coverage.
Even if you don't know what the labels mean, underline them or write them down on a separate sheet of paper. They are very, very important. As discussed in the Introduction, these labels may clue you in to which state and federal laws apply to the plan. While you don't need to understand all of the technical distinctions among these labels, people in the insurance industry do--and you may periodically be askedwhat type of policy you have. It's nice, at the very least, to be able to give the right answer.
While you're at it, pay attention to other labels that identify your plan. See, for example, if there are any limiting labels, like "hospital and surgical only." See if your health plan describes itself as "accident only." Sometimes the coverage offered by an entire plan is colored by a relatively inconspicuous label. Don't let the label be too inconspicuous for you.
There you have it--the basic approach you should follow in reading any health plan. The good news is that it's not really very hard; anyone can master any insurance plan if they tackle it systematically and patiently. In fact, someone who does may even know the plan better than the customer service representatives that he or she calls with complaints. And that knowledge should make all the difference when it comes to getting problems solved.

MAKING THEM PAY. Copyright © 2001 by Rhonda D. Orin. All rights reserved. No part of this book may be used or reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles or reviews. For information, address St. Martin's Press, 175 Fifth Avenue, New York, N.Y. 10010.