24 July 2009

The abuses of private insurers

This is a great example of the compelling need for regulation of the insurance industry, and for a public insurance choice for patients to prevent these sorts of abuses, if true:

Bayonne Hospital Center and Hospital Patient File Federal Lawsuit to Protect Bayonne, New Jersey Residents From Life-Threatening Business Practices of Horizon Blue Cross Blue Shield of NJ

Suit Charges Horizon with Systematic Attack on Emergency Care in Quest for Profit

BAYONNE, NJ, JULY 22, 2009—Bayonne Hospital Center (BHC)—the only hospital in the medically underserved working class community of Bayonne, NJ—today announced it has filed a federal lawsuit against Horizon Blue Cross Blue Shield of New Jersey (Horizon) [...]

Horizon’s practices and activities include, among other things: a systematic campaign of intimidating patients into abandoning emergency care at BHC that is already underway, including calls to patients and the sending of couriers to instruct patients to leave the hospital while still in the midst of emergency treatment; egregious and arbitrary denials of coverage and claims for emergency care at BHC; and constant efforts to under-compensate the only emergency care option in the Bayonne community, a hospital just rescued from bankruptcy.

The complaint filed today in the U.S. District Court in Newark, New Jersey provides a detailed account of Horizon’s business practices which run counter to the insurer’s contractual duties to its customers, its obligations under state law and its stated commitment to the interest of public health. Some of the most offensive Horizon practices detailed in the complaint include:

•A systematic campaign discouraging patients from seeking emergency care at BHC despite it being the closest and safest option for urgent care for the residents of Bayonne

•Intimidation of patients by threatening denial of coverage if they seek treatment at BHC

•Interference with care by sending couriers to BHC to tell patients undergoing medically necessary treatments to leave BHC and seek care at a hospital that is "in network"

•Indefensible denial of claims, often while the patient is still undergoing care

•Unilateral determinations by Horizon bureaucrats that emergency room patients are medically stable enough to be discharged to home or transferred to other in-network facilities without consulting the patient's attending physician

I've been in some epic battles with insurers, and I know that it can get ugly. But, wow. Sending couriers to instruct patients to leave? Forcing ER docs to discharge patients? That's way over any line I've ever heard of.

And yet Max Baucus and the Blue Dogs will fight tooth and nail to protect their buddies in the insurance industry.


  1. I keep thinking that the healthcare overhaul would be more than half done if we could just force the insurance companies to operate on a not-for-profit basis. You can't take good care of your patients and your shareholders at the same time.

  2. Wow. Such antics redefine "abuse," although I admit to not understanding how someone could cave to such obvious... illegality. (But how can an ER physician be forced into transfers and discharges? And what exactly do those nasty, sniveling couriers say?!)

    I am considered "uninsurable," but fought tooth-and-nail against being left adrift by BCBS. Ultimately, I appealed to the State Insurance Commissioner's Office for help.

    After two desultory go-rounds, with the score BCBS 2, La Bonne et Belle Bianca Castafiore 0, we had a breakthrough.

    My third application included, as they all had, of course, a personal check to cover the first month's premium (always optimistic that they'd offer me a policy!).

    Whoever had been given my case at BCBS decided to employ a new technique and wrote me that they were so sorry but I was AGAIN denied coverage -- this time because I had failed to provide a check to cover the first month's premium!

    I can just hear the snickering, the barely repressed belly laugh.

    God bless the poor underling who then proceeded to send me the check back, writing that she had found it in my file and wanted to make sure I received it -- all neatly typed on BCBS letterhead...

    It was beautiful. The insurance commish people made reference to my "lost" check (while waving it in their collective faces) and I was offered coverage about a week later.

    Of course, it costs $1327/month, with $5000 deductible -- you should see the entries I make on the memo section of the checks I send them now...

    On the other hand, BCBS has forked over more than half a million dollars on my behalf in the last year.

    It is such an obviously bad deal for both parties -- I don't know why private insurers aren't clamoring for reform, themselves, if that would remove dead weight like myself from their rolls!

    But this Bayonne business? That's criminal on a whole other level.

    I'm feeling dense. Why such resistance to putting any money into this hospital? How much is the cost of care increased by virtue of it being interrupted and moved?! (I'm assuming that Horizon BCBS cheerfully hands over the big bucks elsewhere...)

    And in other news: Thank you so much for your posts that help to unpack much of the health care policy debate. They've gone a long way toward helping me to understand what is going (or, sadly, not going) on.

  3. LawdHaveMRSA7/25/2009 1:54 PM

    Besides preservation of profits, there is ZERO reason to keep this craptastic industry afloat. Democrat or Republican, the health insurance industry is wholly reprehensible and should be no more....
    I will keep dreaming of the day this cancer is excized from our collective being, and I would welcome the relatively benign lump of a wholly public insurance plan, that won't include yachts and bailouts for the asswipes who populate this "business sector" nowadays.

    FYYFF say I to all the insurers...
    Thanks Shadow, keep the blog roll rolling...

    Do you know a good therapy for ellipse addiction...?

  4. Good heavens, this is appalling. Sending couriers to the ED??? Sick, just sick. I hope they end up getting the book thrown at them, and then being denied coverage for the subsequent injury.

  5. This is not a news story. This is only the hospital's side of it, and it's total propaganda. From having been in PR, my guess is that the law firm that's handling the suit on behalf of the hospital sent this out as a press release.

    From having once worked for BCBS, I'm pretty sure that their side of it is that the hospital, freshly out of bankruptcy, has balked at signing the fee agreements BCBS has offered. Therefore, BCBS has deemed it "out of network" and is legally allowed to refuse complete coverage to the patients that use it. (They can't deny all coverage, but they can make it very painful indeed for patients to go to this hospital as opposed to one that's "in network.")

    On the one hand, this is BCBS's one and only bit of control over hospital fees. On the other hand, it's not very customer-friendly, since it forces patients to pay more. But BCBS hasn't made its money by being customer friendly.

    I agree that all health insurance -- indeed, all health care entities, including hospitals, big pharma, and the larger physician practices (the ones with dozens of doctors acting as a corporation, not the little two-doctor practices where the salaries go to the docs and their staff) -- should be required to be not-for-profit. People who provide health care should make money from doing that; investors and stockholders shouldn't. Once upon a time BCBS was not-for-profit, and though it was far from being a charitable organization even in those days, it wasn't the slime-sucking bottom feeder that it is now.

  6. Anon-

    You are right -- this is a press release and not news. I should have pointed that out.

    And your comments about insurers tactics are also accurate. But this (if true) would certainly be above & beyond any aggressive negotiations I have ever come into contact with!


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