Picking a Health Plan – a How To Guide

Even though managed care has only recently taken hold in the bedrock of American medicine, it has already inspired a couple of popular sayings. One is that managed care is about managing costs, not care. The other is that the new health plans work really well–so long as you don’t get sick. To these, consumer advocates add a third adage: people should approach healthcare coverage as they would buying a car: shop around, read the fine print, and buyer beware.

More than 100 million Americans are enrolled in some form of organized health-delivery system–an HMO, managed-care network or preferred-provider plan. Many of them have selected a plan from the choices offered on the local market or by their employer. Yet according to recent studies, many corporations ignore quality and focus mainly on costs when choosing plans. Most employees, in turn, don’t even learn the details of their plans until they have a serious medical problem.

Even for an aggressive consumer, essential facts can be hard to come by. The health-care companies have little incentive to disclose all their policies and practices (though some states are considering legislation that will require them to do so). And the documents they do provide can be impenetrable. “Some of the information is more complicated than the rental agreements for your condominium,” notes Dr. Eugene Ogrod, president of the California Medical Association. “Even physicians working in the plans sometimes have difficulty understanding what they mean.”

What follows is a guide put together by Dennis Abrams, a Philadelphia workers’ comp attorney and insurance expert, to help navigate the maze of paperwork, rules and restrictions that even the best health plans have set up.

The first order of business should be to determine exactly what the plan covers. Some services, such as mental health treatments, drug rehabilitation or dental care, may not be included at all. Though no one can predict all their health-care needs, young families should look for obstetric and well-baby services; older families for rehabilitative and home care. But beyond such basics, patients may not be reimbursed for emergency-room visits unless the visit results in subsequent hospitalization, or a prescription medication the patient depends on may be deemed too expensive. Warns Cathy Hurwit, legislative director for Citizen Action, a three-million member consumer group: “A consumer can sometimes tell, based on the number and types of limitations, whether the company is looking for ways not to pay.”

The ubiquitous phrase “medically necessary” is open to interpretation–and it is important to know by whom. One contract from a nationally known HMO reads, “Benefits for covered services or supplies under this Plan are subject to a Utilization Review…The U.R. as done by the Patient Advocate determines the Medical Necessity of the services.” Nowhere does this plan reveal who the patient advocate is: it may be a penny-pinching bureaucrat who has never met or examined the patient. As Dr. Linda Peeno, a former medical reviewer for Humana, a managed-care company, testified before Congress in 1993, “Medical necessity…is the managed-care gold mine.”

Pre-existing conditions and “investigational” treatments can also be dangerous, even fatal, sticking points. The patient could be liable for all costs relating to even such a common condition as high blood pressure, as well as for costs incurred by new ailments that may stem from the original illness. Treatments some plans regard as experimental, such as bone-marrow transplants, or AZT for HIV-positive patients, may also be excluded, even if the treatment is commonly accepted in the medical community.

Pre-certification clauses, in which the patient must get permission in advance for a given treatment, also lead to complications. The contract may stipulate that pre-certification is not necessary in emergencies, but who decides what constitutes an emergency? Not the patient. And suppose calling the pre-certification help line yields only voicemail on the weekends? “I had several patients who were so desperate that they paid me out of pocket,” says Rosabel Young, a neurologist who worked for a CIGNA HMO until she quit in frustration.

Consumers must remember to look beyond the monthly premiums to consider overall costs, including co-payments and deductibles. “Good plans,” says Hurwit, “will set a reasonable limit on what you have to pay out of your own pocket every year.” But some plans have a lifetime limit on what they will pay, which can be wiped out by a major health problem.

Can the patient choose a doctor and then change that doctor easily if he or she is unhappy with the care? Are these doctors allowed to make referrals? Are there enough eligible doctors, hospitals and pharmacies in the patient’s own neighborhood? What percentage of the plan’s doctors are board certified in their specialties? Warns Jeanne Finberg, senior attorney for Consumers Union, the publisher of Consumer Reports: “There’s a big problem with getting questions answered in advance. Be sure to talk with someone who is authorized to answer this type of question, like the plan administrator. Also, keep notes of your conversation, including the name of the person and the date and time called.”

What if something goes wrong? Is there a patient advocate? A complaint line where someone actually picks up the telephone? Is there a way to appeal? Some states keep records of how many complaints a health plan has received. Individual companies and the National Committee for Quality Assurance, an industry group, also put out patient-satisfaction surveys, but these are not very reliable. It is one thing to ask healthy subscribers how they rate their HMO, quite another to poll those with chronic illnesses. Still, plans that have failed the NCQA certification procedure, which looks at 50 criteria, like how many plan doctors are board certified in their specialties, should be avoided. (The NCQA findings are free to anyone who calls (202) 955-3515 or checks the organization’s Website, at www.ncqa.org.)

Perhaps the trickiest area to untangle in managed care, and the most vital, is the relationship between your doctor and the health-care company, because this can affect what the doctor tells you and the care you receive. Some plans compensate their primary-care providers with a set monthly fee for each enrolled patient. This capitation can discourage a physician from ordering up tests and treatment past a certain spending level, as do special incentive plans that pay doctors a bonus to keep costs down. And according to the American Medical Association, at least a dozen HMOs, covering millions of patients, have so-called gag clauses that prevent doctors from revealing their compensation deal or discussing treatment options that are not covered by the plan.

Yet it is nearly impossible for a single consumer to find out about these arrangements unless a disgruntled doctor breaks ranks. Following the lead of Massachusetts, a number of states are considering laws that would ban gag clauses in physician contracts. Barring that, an employee can try to get answers through his or her company, which has more leverage. Because in the new world of managed care, market forces tend to trump the Hippocratic oath.

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