Few appeals
reach state board

The Department of Commerce's
Insurance Division handles
some disputed health claims

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By Helen Altonn
haltonn@starbulletin.com

The state Insurance Division has received 27 appeals this year from Hawaii patients who exhausted the appeals process for claims denied under their health plans.

Hawaii's 1998 patients' rights law allows people dissatisfied with the outcome of their health plan's appeals process to turn to the Insurance Division of the Department of Commerce and Consumer Affairs.

"I didn't anticipate that the division would be overwhelmed by appeals, and we have not been, considering that thousands of claims are paid every month across the state by various health care plans, and many are not," said Insurance Commissioner Wayne Metcalf.

Health care plans are required to have at least two internal levels of appeal, he said, pointing out patients must go through the internal appeals process before turning to the Insurance Division.

Of the 27 cases, Metcalf said hearings were held for three, 10 were dismissed because of settlements, one was withdrawn and 13 are pending.

In the three cases in which hearings were held, two were decided for the plan and one for the patient, Metcalf said.

The one decision for the patient is "too small a number to represent anything," he said.

But the fact that the case was decided for the consumer after the claim for payment was denied twice by the plan "indicates the three-member panel is able to exercise its judgment independent of previous decisions by the plan," he said.

The division's appeals panel, established by law, includes the insurance commissioner as chair, a physician from the specialty involved in the dispute, and a member of a health care plan other than the one cited in the complaint.

Metcalf said issues usually concern coverage -- whether the health care plan is required to cover certain costs and expenses by contract or by law.

"On appeal, these cases have cut both ways," he said.

The panel reaches a decision after reviewing evidence and documents and hearing testimony of the parties, Metcalf said.

In all cases that he is aware of, he said, the decision has been unanimous, either for the plan or the member. One exception was a health care plan member on the panel who signed with reservations, but the decision was reflected as unanimous, he said.

Cliff Cisco, senior vice president of the Hawaii Medical Service Association, the state's largest health insurance carrier, said it has had some cases with the insurance commissioner.

But most appeals are settled through HMSA's internal process, he said. It also sends cases to a review panel on the mainland "just to check things out," he said.

"We have our own internal board structure and arbitration, if a member so chooses. We inform members of rights to appeal to the insurance commissioner."

Cisco said Hawaii's patient's bill of rights "seems to be working all right."

But there is some concern about patients' rights from a national point of view because different states have different rules. "We're not sure whether the federal government will mandate different rules."

Various proposals for a national patients' bill of rights are being debated in Congress, and whatever becomes law on the federal level may apply to the states, Metcalf said.

Cisco said one issue is how much time is allowed to complete the appeals process -- 45 days or 60 days -- and another is giving consumers the right to sue a health plan.

President Bush has said he supports a federal patients' bill of rights but opposes giving patients broader rights to sue.

"Any time you get involved with legal litigation, rather than use arbitration or other routes," Cisco said, "you are going to increase the cost of health care coverage. For that reason, we prefer to use other remedies."

Hawaii's law does not allow health plan members to take legal action against a health care plan, which is "somewhat of an anomaly," Metcalf said.

"Even the state of Hawaii enjoys (only) limited immunity from lawsuits. HMOs are the only entity that comes to mind that are virtually immune to legal action.

"I think it is a little odd that HMOs, and no other person or entity in the community that I can think of, enjoys nearly virtual immunity from lawsuits, no matter what errors they commit," Metcalf added. "I see that as incongruous."

Metcalf pointed out: "Hawaii traditionally has been a leader in health care. Suing health care plans aside, our health care plans by and large have not been the subject of many disputes in Hawaii."