- - Monday, September 3, 2012

ANALYSIS/OPINION:

“Insurance” and “coverage” are warm, benign-sounding words. The more the better. With “universal” and “comprehensive” coverage, everyone would be safe and secure, right? There would be no more worries about health care bankruptcy, for example.

People have gotten their photos in the newspaper for not having enough coverage. They’ve had cancer, and the only treatment that might help them has been ruled “experimental” and, therefore, not covered. Chances are, they got it anyway — with help from family, friends, total strangers and likely a loan from the bank. But there are other possible meanings for coverage. It can be stifling, restrictive and limiting. It can refer to six feet of earth. With a health plan, bankruptcy protection is for the plan, not the subscribers who may be forking over $600 a month in lost earnings.

What isn’t in the newspaper is the story of people like Sandra Lobb. She is dead, by the way. Her treatment was covered. But some insurance functionary decided that “given Sandy’s age and her condition, the cost of the care being prescribed can’t be justified.”

The cost was about $7,000, and her husband wanted to pay it. But the hospital refused the money and insisted on discharging the patient. No other facility would take her. They all turned down the money — in the United States of America, not Canada. Imagine that: capitalists refusing payment. How can that be?

Frank Lobb, a businessman, spent 10 years in litigation, trying to figure out how he could have been allowed to pay for his wife’s medical care. The key, it turns out, is what he calls “the beating heart of the managed-care industry’s business plan.” It is a secret the industry tries very hard to keep hidden in plain sight.

By state law, virtually all provider contracts contain the innocuous-sounding Enrollee Hold Harmless Clause, written by the National Association of Insurance Commissioners. Officials will say, and possibly believe, that its purpose is to protect subscribers against “balance billing,” extra charges not covered by their insurance company. What the clause does is serve as an absolute bar to providers accepting any payment beyond deductibles and co-payment from any source outside the plan for any “covered” treatment. A service is “covered” if it is available under the plan, even if the plan denies it in an individual case like Sandy’s.

The clause is needed for insolvency protection — for the health plan.

Unlike true casualty insurance, health plans make open-ended promises to provide all “necessary and appropriate” care. Under Obamacare, no lifetime limits are allowed. Thus, the plan needs some method of controlling its costs. While the plan cannot lawfully make medical decisions itself, the Enrollee Hold Harmless Clause gives it tremendous power to ensure that its contracted providers agree with its determinations. Otherwise, they cannot be paid.

In his book “The Great Health Care Fraud,” Mr. Lobb prints the Enrollee Hold Harmless Clause and other documents that he was able to obtain only through legal process. If you are buying health coverage for yourself or your employees, check whether your plan has this clause in its contracts with providers. You need to read those contracts. Remember that with third-party payment, your doctor is working for the payer, not for you. When you buy the plan, you may not only be turning over the premium payment to the plan, but also forfeiting the right to use your own money to buy covered-but-denied lifesaving treatment from any contracted provider.

Most people are happy with their plans. But then, most people are healthy. Plans may be doing well currently, but with exploding demand and limited revenues, their financial situation could deteriorate rapidly. If it does, don’t expect your life will have a higher priority than Obamacare’s bottom line.

Dr. Jane M. Orient practices internal medicine in Tucson, Ariz., and is executive director of the Association of American Physicians and Surgeons (aapsonline.org).

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