Make Your Health Insurance Pay Up by Jeffrey Dach MD

February 26, 2008


The Eight Hundred Pound Gorilla in the Health Insurance Industry
What do you do with an eight hundred pound Gorilla that misbehaves and denies coverage for your medical bills? Patsy Bates found out this week when a California court awarded her 9 million dollars for damages arising from Health Net cancelling her insurance coverage just when she needed treatment for breast cancer. (41) (AP News Story here)  How did her lawyer William Shernoff win against the eight hundred pound Gorilla, Health Net? It’s all in his book, "Fight Back and Win: How to Get HMOs and Health Insurance to Pay Up", by William Shernoff. (37)(40)

Rocky Delgadillo, LA
City Attorney, Modern Hero 

Files Suit Against Health Net for Cancelling Due to Pre-Existing Condition
Also this week, Los Angeles City Attorney, Rocky Delgadillo filed suit and criminal charges against the same company, Health Net, claiming it unfairly cancelled policies when patients needed expensive medical treatment. This is also known as cancelling for a Pre-Existing Condition.

Health Net Inc. saved about $35 million by illegally canceling the coverage of at least 1,600 patients over four years, the city attorney alleges in the lawsuit filed Wednesday. 

The Pre-Existing Condition Gimmick

A typical ploy the insurance company uses to cancell insurance coverage is the "pre-existing condition".  Los Angelos City Attorney Rocky Delgadillo said, "This is an industry with a history of putting profits before people.  Their practices are not only illegal, they are immoral and we are going to hold them accountable." In November, state regulators fined the company $1 million for lying about its incentive program for reaching cancellation targets. Delgadillo’s office is pursuing a criminal investigation against individual employees who received bonuses based in part on canceling policies of people who have submitted substantial medical claims. (1)(2)  A California State legislature introduced a new law last week that would prevent this abusive cancellation for pre-existing  condition.


Nebraska is not happy with United HealthCare
Jan 9, 2007, UnitedHealthCare Group violated 18 insurance laws hundreds of times during a review period, state insurance regulators say. Nebraska Insurance Department attorney Ann Frohman said that numerous complaints prompted a review og United HealthCare which revealed decision delays, wrong decisions about coverage and bad information given to consumers. (3)

UnitedHealthcare Settles Complaint and Pays $600,000 Fine.

In what could be the largest penalty ever imposed by the state against a health insurer, UnitedHealthcare of Wisconsin and two affiliates will pay $600,000 for not adequately responding to consumer complaints and grievances, not paying for certain benefits, and other violations of state insurance regulations. The forfeiture was part of a settlement reached with the Office of the Commissioner of Insurance in November and announced on Friday. It stemmed from investigations done in 2003 and 2004. (4) By Guy Boulton, The Milwaukee Journal Sentinel Jul. 15, 2006.

Read the comsumer complaints here. (5)

New York Attorney General Andrew Cuomo, Modern Hero,  Goes After United HealthCare 

February 13, 2008: New York Attorney General Andrew Cuomo Announces Industry Wide Investigation into Health Insurer’s Fraudulent Re-Imbursement Scheme for Out-of-Network Doctor Visits. This scheme involves out-of network doctor visits which are billed by the doctor directly to the patient.  The patient sends the a reimbursment form with the bill into the insurance company.  If the out of network provision was purchased and part of the policy, the insurance company will pay 80% of reasonable and customary fees.  This is where the fraud comes in.  This reasonable and customary fee is intentionally set low by Ingenix,  a company owned by United Healthcare, an obvious conflict of interest which bilks customers out of millions.  For example if the doctor’s fee is $200, Ingenix says the customary fee is $90, and they pay only 72 dollars instead of $160.

"Health Insurers such as United Healthcare have been systematically cheating patients and doctors of fair reimbursement for medical services through the industry’s arcane procedures for calculating  "reasonable and customary" rates",  according to a New York Times editorial.  (New York Times, 2/18). (6)

United HealthCare Corporate Profits Keep Going Up

Shares of UnitedHealth are up 563% for the five years ending 2004. 
These obscene Corporate profits are maximized by rewarding employees for not paying medical claims. (7)
 Like Public Electric Utilities, health insurance companies practices should he regulated by the state. 
Otherwise, we would have $5,000 electric bills every month.

 Stop Corporate Greed, and Take Action

Ask Your Legislature to Regulate Health Insurance like any other Publiuc Utility 

The simple solution is for the states to regulate the health insurance industry same way they regulate the public utilities. Some states are actually starting this process of regulation.  Lawmakers in several states are passing new laws which limit health insurers’ ability to cancel health policies for pre-existing conditions. (45)

Contact Your State Insurance Commissioner and File a Complaint, the State Regulators will start a review.

Do you have a complaint about your insurance company? Call or write to your state insurance commissioner:

Use this handy map to find your insurance commissioner contact information for any state.(8)

Florida Insurance Commissioner:
Kevin M. McCarty
Commissioner of the Office of Insurance Regulation
Office of the Commissioner
200 East Gaines Street
Tallahassee, Florida 32399-0305
Florida State Dept of Insurance Toll-free helpline, 1-877-693-5236, is available 8 a.m. to 5 p.m. M-F 

Stop the Shakedowns.  Make Your Insurance Company Pay Your Medical Bills 

Whether your health plan is a traditional insurer, a PPO or an HMO, and whether it dismisses your claim or agrees to pay only part of the bill—here are the steps to take: These instructions are found here. (9)

1. Know Your Rights

When coverage is denied for a treatment or drug, it is up to you to collect information and make the case for coverage. This is true whether you are seeking pre-authorization before you receive a service or are disputing an Explanation Of Benefits form sent to you in response to an unreimbursed claim.

First, check your rights under your health-care plan and under state law. If your employer provides your insurance, call your human-resources department to get a copy of the policy. Read it carefully. The policy will tell you what is covered and what mechanism you can use to challenge your health plan’s decisions. If you don’t understand the provisions, ask someone in human resources for help or call your insurer’s customer-relations number for an explanation.

Health plans are required to follow state and federal law for handling complaints and appeals. Find out your own health plan’s internal review process, then follow it.

2. Contact the Insurer

Get your paperwork together before you call the health-plan insurer. (You’ll find the phone number on the form that was sent to you with denial of your request for reimbursement. It also will be on your policy.) Be prepared to lay out all the evidence to convince your insurer that your position is correct.

Your dispute may be resolved with your first informal call, but that call also may be the start of a lengthy process. Make a file and start keeping accurate records of every contact you make: whom you spoke with, the date of the conversation, what was said and when they said the next step would occur.

3. File a Written Appeal

If you don’t get results from a phone call, file a written appeal with the health plan. To prepare the appeal, request a copy of your entire claim file from the health plan, advises Jennifer C. Jaff, an attorney who is the executive director of Advocacy for Patients With Chronic Illness. The file will include the plan’s specific rationale for rejecting your claim. Tailor your letter to the plan’s criteria for denial or acceptance and attach supporting documents.

If the claim file says the treatment was “unnecessary,” attach your medical records. These should include test results and an explanation of why other treatments have failed as well as a letter from your doctor about why you needed that treatment.

If payment for your treatment is declined as “experimental,” you’ll have to show that the procedure you had is now medically accepted. You can do this by searching on the Internet or at your public library for articles in medical journals that demonstrate the effectiveness of the novel treatment you are trying to get covered.

Make sure you file the appeal within the designated time limit. Some plans, for example, require that you challenge a reimbursement denial within 60 days. The two biggest mistakes patients make in their appeals are not providing enough background material to justify coverage and not meeting deadlines.

4. Get Outside Help

If you have a chronic condition such as diabetes or cancer, or even a rare condition such as Crohn’s disease, the advocacy organization devoted to that disease can help you frame your appeal. For example, the website for the American Diabetes Association,, provides information for people who are having trouble getting health-care coverage. Although the website is targeted to people with diabetes, the advice is helpful for all patients.

5. Demand An Independent Review

Starting in 1990, managed-care enrollment in the U.S. increased by 85%. As more patients signed up, more of them also began to complain to their legislatures about denials of coverage by their health plans.

State lawmakers listened: 43 states plus the District of Columbia have enacted some version of a Patient’s Bill of Rights. As a rule, these laws give consumers the right to an independent medical review when a health plan denies coverage for care or access to out-of-network providers.

But few people make use of these mechanisms. In Illinois, where about 1.5 million people are enrolled in HMOs, only one in 225 members a year files a complaint with the HMO. Far fewer—one in 2250—take the appeal to the next level by asking for an independent review of their claim.

That’s a mistake. Although success rates differ from state to state, consumers tend to prevail in these challenges about 50% of the time.

Health-care insurers made profits in the billions last year. Know your rights, so profits will not be taken unfairly from your own benefits.

Jeffrey Dach MD

Jeffrey Dach MD
4700 Sheridan Suite T.
Hollywood Fl, 33021


CityAttorney Files Lawsuit Against Health Net Inc.February 21, 2008 KNBC TV LA

CNN Money: LA Sues Health Net Over Cancellations, Los Angeles City Attorney Sues Insurer Health Net, Alleging Scheme to Cancel Policies. February 21, 2008:

Jan 9, 2007 UnitedHealthCare Accused Of Breaking Insurance Law. WCCO Channel 4 TV

State fines health insurer $600,000, UnitedHealthcare settles complaint, By GUY BOULTON
July 14, 2006, Milwaukee Journal Sentinel

A typical complaint found here: <quote>They are the worst company I’ve ever had. They refuse to pay any of the claims, even though they recognize they absolutly have to and should cover those charges. I’v spent hours on the phone with them for almost 3 months. At this point my company is dealing with them through their representative to resolve payments. It would be 10 times cheaper for me to just go to the doctor and pay whatever then pay them and now I have to pay the hospital too for whatever the reason is they can’t explain.. <endquote>

EDITORIAL, A Rip-Off by Health Insurers? February 18, 2008 New York Times

Chart showing obscene profits of United Healthcare increasing every year. Shares of UnitedHealth are up 563% for the five years ending 2004, versus a 17% loss for the benchmark S&P 500.

This is a Link to Your State Insurance Web Site – witn a Handy Map of US, All States.

TAKE CONTROL OF YOUR HEALTH, Fight for Your Health Care, By Lori Andrews Published: January 20, 2008 Parade

2002, Michael D. Maves, MD, MBA, Executive Vice President and Chief Executive Officer, AMA, Letter to United HealthCare CEO Dr. William McGuire complaining about miscoding CPT codes, etc.

USA Today, UnitedHealth CEO McGuire, retires amid options scandal Updated 10/16/2006 9:13 AM ET

Tuesday, March 20, 2007 UnitedHealth Declares "The Health Care System Isn’t Healthy" – But Is the Company Part of the Problem?

Disputes with United HealthCare over payments

Uniterd HealthGroup Accused of Fraud

(15) Listing of News Stories on United Health Group


Andrew Cuomo to sue major health insurers By MICHAEL GORMLEY, Associated Press Writer
Wed Feb 13.

Business Week, February 21, 2008, Wrangling Over ‘Reasonable’ Fees, It’s a no-holds-barred battle between health insurers and hospitals, with customers caught in the middle. By Chad Terhune, with Brian Grow

Huffington Post, Falling in Love with Andrew Cuomo by Eve Gittelson Feb 14 2008.

New York Times, Andrew M. Cuomo, New York State attorney general, announced an inquiry into health insurance Wednesday. By REED ABELSON, February 14, 2008


UnitedHealth unit charged with fraud New York state says alleged practices left consumers shortchanged By Russ Britt, MarketWatch Feb. 13, 2008

Cuomo to Sue Biggest Health Insurer, Others to Receive Subpoenas Over Reimbursements, N.Y. Attorney General Andrew Cuomo says he will sue UnitedHealth over setting artificially low limits on how much patients are reimbursed for medical-care claims. (By Robert Caplin — Bloomberg News) Washington Post

UnitedHealth Draws Criticism for Its Out-of-Network Reimbursement Policies. I have posted a number of previous notes about UnitedHealth, particularly with regard to its punitive policies toward physicians for out-of-network lab testing.

Confessions of a Pediatric Practice Consultant, True stories from the land of pediatric practice management.Andrew Cuomo, UnitedHealthCare: Duh. February 14, 2008 . Cuomo’s investigation also found a clear example of the scheme: United insurers knew most simple doctor visits cost $200, but claimed to their members the typical rate was only $77. The insurers then applied the contractual reimbursement rate of 80%, covering only $62 for a $200 bill, and leaving the patient to cover the $138 balance.
NPR Radio story on Andrew Cuomo And United Health

Health Insurer to Face CRIMINAL CHARGES by California Nurses Shum, Fri Feb 22, 2008 This could be the start of something huge. The sociopaths who run our nation’s health insurance corporations might–just might–begin to face justice for the countless Americans that have suffered at their hands.  Health Net, one of the largest insurers in the nation, is facing multiple civil and criminal charges for retroactive recissions, their habit of kicking people off the insurance rolls as soon as they get sick.This practice is not a coincidence–it’s at the heart of their business plan, in fact of the whole model of for-profit health insurance.  Los Angeles City Attorney Rocky Delgadillo was brave in standing up to the practice,and justified.  We need other activist prosecutors to follow his lead, and help turn the public disgust with insurance corporations into national momentum for replacing them with universal, non-profit guaranteed coverage…also known as single-payer healthcare.

L.A. sues insurer over cancellations, The city attorney says Health Net defrauded policyholders by dropping patients who needed costly care. By Lisa Girion, Los Angeles Times Staff Writer,February 21, 2008.

File your health insurer complaint with LA City Attorney Delgadillo: "If you believe your health insurer has wrongfully denied or delayed your claim and/or canceled your coverage, we urge you to provide us with a description of your complaint. If you are a health care provider who has had payment withheld, payment delayed or has been retroactively denied payment for services rendered under a health plan or insurance policy."

California Nurses Association. Submit Your Story Web Site. Are you getting the healthcare you need, when you need it, at a price you can afford? Nearly 48 million Americans have no health insurance at all and nearly 50 million more are under insured with high deductibles and co-pays discouraging them from seeking the care they need in the preventative stages. We’ve created this form to collect your stories, which may be used on our websites, in the news, to educate the public, and/or at legislative hearings.

N.Y. Attorney General Investigation Highlights Problems In Navigating Out-of-Network Charges

Legislation would crack down on insurers. Victoria Colliver, San Fransisco Chronicle Staff Writer, Thursday, February 14, 2008.  A California lawmaker introduced legislation Wednesday that would require health insurers to get permission from state regulators before retroactively canceling a member’s coverage. The bill, introduced by Assemblyman Hector De La Torre, D-South Gate (Los Angeles County), comes on the heels of news this week that Blue Cross of California had been sending letters to doctors asking them to report pre-existing conditions and discrepancies that could be used to cancel a new member’s policy.

Clinton Health Care Proposal called Managed Competition (Jan 1994) starts on page 6 of document.
Under managed competition, all doctors and other caregivers will be under the administrative
thumb of six or eight immense, for-profit insurance companies,which will have gobbled up hundreds of smaller insurers.


UnitedHealth shakes up over Options by Shubha Krishnappa – October 16, 2006 The Money Times. McGuire, the longtime chief executive of UnitedHealth Group Inc., who worked hard to turn the Group into a behemoth in its field, was forced yesterday to resign from the company and to give up a portion of the $1.1 billion he holds in severely criticized stock options. The options that McGuire had been granted over the years have led to criminal and civil investigations and public disapproval.


Florida State Office of Insurance Regulation. The Office serves Floridians through its responsibilities for regulation, compliance and enforcement of statutes related to the business of insurance.

A Consumer Guide to Handling Disputes with Your Health Plan or Insurance Carrier – Kaiser


The Book,  Making Them Pay: How to Get the Most from Health Insurance and Managed Care by Rhonda Orin "It’s time to get down to business-and that means learning the nuts and bolts of health plans…"


The Book, Fight Back and Win: How to Get HMOs and Health Insurance to Pay Up by William Shernoff , Lawyer who won 9 million dollar settlement from Helath Net last week.

Advocacy for Patients with Chronic Illnesses, Jennifer C. Jaff attorney and founder of Advocacy for Patients with Chronic Illness, Inc., a tax-exempt organization that provides free information, advice and advocacy services to patients with chronic illnesses

Interview with Jennifer Jaff talking about finding and getting health insurance, and then making them pay for your medical bills.

Law Firm of William Shernoff

Insurer fined $9M for dropping cancer patient. Cancellation had left woman with more than $129,000 in unpaid bills.  Insurance company pays up. Feb. 23: A woman battling breast cancer had her policy cancelled during her treatment. NBC’s Chris Jansing reports that action is costing the insurance company dearly.Associated Press.

LOS ANGELES – A woman who had her medical coverage canceled as she was undergoing treatment for breast cancer has been awarded more than $9 million in a case against one of California’s largest health insurers.  Patsy Bates, 52, a hairdresser from Lakewood, had been left with more than $129,000 in unpaid medical bills when Health Net Inc. canceled her policy in 2004. On Friday, arbitration judge Sam Cianchetti ordered Health Net to repay that amount while providing $8.4 million in punitive damages and $750,000 for emotional distress.


Florida State Division of Consumer Services, Medical Provider Informational Memorandum Attention:
Florida Medical Providers Assistance, Complaints, Inquiries, online inquiry form.  The state regulatory agency with file inquiry with the insurance company. 


February 14, 2008, NY AG on UnitedHealth Database: Garbage In, Garbage Out Posted by Dan Slater , New York Times


What is a Denial Engine? That’s the computer software that denies your claim.  Read more here:
Denial Engine Vendor Ingenix Keeps more than Usual and Customary Dollars. In my warnings to providers about denial engines — those sophisticated analytics tools that payers are increasingly using to reduce, deny, or re-collect claims payments — I try to emphasize that they can be used ethically.

States act to protect individual health insurance coverage, By Julie Appleby, USA TODAY 2/21/08

(c) 2008 jeffrey dach md      disclaimer     Original article available here


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