HMOs and Patients' Bill of Rights Transcripts August 26, 1997 9 a.m. - 10 a.m. GUESTS: ELISABETH BENJAMIN, MANAGED CARE ATTORNEY MITCHELL KAHN, M.D., HMO PARTICIPANT The following are excerpts from the viewer call-in portion of the program. What is an HMO? Good vs. Bad HMOs What if Primary Care Physician Won't Refer Me to Another Doctor? Employee Retirement Income Security Act How do HMOS Affect Doctors? Procedures Not Covered by An HMO My HMO Imposes a Spending Cap on Treatment Tips for Chosing an HMO JUNE GRASSO: Good morning. I'm June Grasso, and welcome to Legal Cafe, Court TV's daily wakeup call to the law in your life. It's Tuesday, when we focus on your health, and this morning we'll start off with a topic that's getting more and more important every day -- HMO plans and your legal rights when someone else is making the decision about your family's health care. HMOs are relatively new in the health care arena, but they've already had major effects on the way patients choose doctors and medical care -- just ask any of the millions of people who now belong to HMOs. I'm joined now by my guest, Elisabeth Benjamin, a staff attorney at the Legal Aid Society's Civil Division in New York City. Elisabeth specializes in health law and has written, lectured, and testified on the subject of managed health care. Welcome, Elisabeth. MS. BENJAMIN: Thank you. WHAT IS AN HMO? MS. GRASSO: The first thing is let's define or explain what exactly is an HMO? MS. BENJAMIN: There's about three basic principles you have to know to understand what HMO is. First of all, HMOs changed the way your health care's paid for. Previously, health care used to be you go to a doctor, your insurance company pays the doctor per visit or a fee for service, that's what that's called. Most people had those under indemnating (ph) plans. HMOs are where they get paid -- they pay people, they pay the doctors, a fixed monthly rate, or they're paid a monthly rate, and you -- whether you use all that care within the month or not, it doesn't matter, supposedly, but, of course, for the HMO it does. If you go over the $150 they're paid per month, use care, they suffer. The other thing you have to know is that they have primary care physicians -- in other words, a gatekeeper. You're assigned to one doctor, and that doctor's supposed to manage all your care and make all the referrals within the network. And the last thing is is it has a restricted set of providers that belong to it, so it's one hospital, one pharmacist, one sets of doctors, and stuff like that, so it restricts the number of options you have. MS. GRASSO: So it seems like economics is the best thing about HMOs. It doesn't cost very much for your medical care. MS. BENJAMIN: Right, and besides nominal co-pays for pharmacy and things like that, you really don't have to pay very much, so a lot of people like it. MS. GRASSO: Now, let's talk a little bit about this gatekeeper concept, because people I know who are in HMOs, the main complaint you hear -- and these are people who haven't had major problems, but the main complaint is, "I want to go a dermatologist, my doctor won't give me a referral." Explain what the problem is with the gatekeeper or what kind of problems people encounter with this gatekeeper concept. MS. BENJAMIN: Well, the biggest problem is is that some of the bad HMOs have real restrictions on the number of referrals that your primary care doctor can make, so they will be grading, if you will, your primary care doctor on the number of referrals that doctor makes out, so if your doctor -- some of them even have financial incentives, so if he refers or she refers to a small amount or different people very little, they get more money. So that's sort of an incentive to lower care and do preventive care. MS. GRASSO: So in other words, the doctor, instead of just basing it on what the best medical advice would be also has to have financial considerations and considerations of, almost, statistics? MS. BENJAMIN: Right. And I guess what -- the old system sort of erred the other way, and this is a big correction for the old system. The old system, doctors had every incentive to keep getting more treatments, more specialist referrals, because they wanted to be safe from, you know, liability, and so they would often refer you maybe too much, or at least that was the concern, although I've never really known anybody that's rushing off to go to the doctor. MS. GRASSO: Right, but people say, you know, there's a health care explosion and that it's a way to curtail it and manage it. MS. BENJAMIN: Right, exactly, to manage it, to emphasize preventive health care and that kind of stuff. That's the beauty of it. GOOD VS. BAD HMOS MS. GRASSO: Now, how do you tell a good HMO from a bad HMO? MS. BENJAMIN: That's hard. That's the hardest question. One thing to do -- I always say there's a -- actually, a friend of mine always says, "Watch the canary in the coal mine," and the analogy is a bright yellow canary goes down the shaft. If it comes up clean, it's experienced. It knows what's going on. MS. GRASSO: Right. MS. BENJAMIN: If you have a really sick friend and they've been in an HMO, chances are they know the pros and cons of an HMO, so that's one person to look to. Going to governmental regulators -- I mean, in New York City, we have Mark Green. He puts out reports which rate the HMOs, so there's -- and the consumer union also rates HMOs. Another way is if you like your doctor and your doctor's in an HMO and you trust and have a good relationship with your doctor, that's probably a good HMO to go with, because at least your doctor can advocate for your health care with it. MS. GRASSO: Now, I just want to explore a little bit what you said before, and that is the restricted list of providers. I just want you to explain for people who don't know about HMOs what you mean by that as far as if you want to -- if you -- there's a certain hospital in your area that you wan to go to, or to the specialist that you have been going to for years who may not be on the list. MS. BENJAMIN: Yeah, that's a big problem. If you have a chronic medical condition and there's a specialist that you need, you need to find out if your HMO can get you to that specialist. That's absolutely the number one problem for folks is not being able to get standing referrals. So the thing is is to find out what your HMO -- the possible HMO you're going to enroll in, it's possible policies are. Some permit you to have your primary care doctor provide what's known as a standing referral, where you can keep going to your specialist as much as you need to. Others say that you can get like a set of referrals, like five referrals, and so you don't have to keep going back to your gatekeeper before going to the specialist. MS. GRASSO: All right. Let's go to the phones and see what our viewers are concerned about. WHAT IF PRIMARY CARE PHYSICIAN WON'T REFER ME TO ANOTHER DOCTOR? Our first caller this morning is Barbara from New Hampshire. Good morning, Barbara. Q Good morning. MS. GRASSO: Barbara, we want to let you talk about your problem or your question about HMOs, but we'd prefer it if you don't use any names, all right, because we don't have a chance to go to the HMO during this hour and get their response. Q Oh, sure. MS. GRASSO: Okay. What's your question? Q My question is this: When we went over to the -- it's a plan where it became a primary care physician type plan -- from my husband's employer. And I had a pre-existing condition, and for two years I didn't go to my doctor, because he was out of the network, and then my regular doctor did an X ray and said that, you know, I had a problem. And I said, well, you know, I had had that problem prior to this and I'd like to go back to the doctor that's treated me for it to get his opinion on this, because I wanted him to do some type of a procedure. And I had an order put in, and I wasn't comfortable -- he referred me to someone, and the person called me up and said, "Oh, well, that's not my specialty," which made me a little leery. MS. GRASSO: Right. And they wouldn't let you go to the person that you'd been going to? Q No. My primary care physician was on vacation -- and when she came back, I tried to speak to her about this, because my gynecologist's office said that they were trying to get hold of the insurance company and having no luck -- because they said that where this was, you know, pre-existing, it should be covered. I should at least be able to come back to them, at least for an opinion. MS. GRASSO: Right. So what happened? Q Well, my primary care physician was very reluctant to do this. She would not do it. She wouldn't give the referral -- and yet I've heard that under all plans if they go to the director and it's a pre-existing condition, it's covered. MS. GRASSO: All right. Barbara, hang on, because -- and I take it that you did not -- you were not able to go to the doctor that you wanted to go to in the end, or is it still going on? Q No, I made the appointment and I'm going to now pay for it. MS. GRASSO: Oh, okay. And it sounds -- and right away, Elisabeth, the number of phone calls that she made and the number the amount of work she already had to do and still get a no answer -- what is the answer to her question or her dilemma? MS. BENJAMIN: The answer is is that she's doing absolutely everything correct. I mean, you have to be your best advocate, so she should call member services, tell them that she's going to lodge -- I mean, the only thing more that I would do besides her -- which she's doing the right thing, she's trying to find out all the information she possibly can without going out and paying out of pocket -- what she can do is a couple of things more, and that is she can lodge what's known as a grievance with her HMO. All HMOs have to have a grievance mechanism, and she should call member services and say, "I want to lodge a grievance. I want you to pay for this. I'm going to have to go pay this out of pocket if you don't, but I think it's either you provide me with a specialist who knows my condition or you pay for me to go to my old doctor." The second thing she should do is probably call some state regulators -- the state of New Hampshire -- I think she's in New Hampshire? MS. GRASSO: Right. MS. BENJAMIN: She should call the state of New Hampshire's attorney general's office. She should call the department of insurance or the department of health, find out who's supposed to be regulating the HMO. Because if the HMO finds out that you're going to the government, they don't want the complaint. MS. GRASSO: Okay. All right. So some good tips for you, Barbara. You have more work on the phones to do -- good luck with that. EMPLOYEE RETIREMENT INCOME SECURITY ACT MS. GRASSO: Welcome back to Legal Cafe. I'm June Grasso. We're discussing HMO plans this morning. Oftentimes the biggest conflicts arise when an HMO tells a patient that he or she cannot see a specific doctor or undergo the desired medical treatment. Another issue is medical malpractice. Can a patient sue an HMO for its decision to deny or delay medical treatment? There's a legal loophole which prevents many malpractice suits against HMOs, at least in state court. It's a federal law called ERISA, the Employee Retirement Income Security Act, and here's how it works. Under ERISA, companies that set up pension and benefit plans do not have to comply with the health care laws of every state in which they do business. HMOs claim they're an extension of these employee health plans, and are therefore protected from state laws having anything to do with health care, including malpractice statutes. Recently, several states have begun to challenge the HMO malpractice shield. Among them are Texas, Alabama, Georgia, New York, and New Jersey. And before we got to the phones, I want you to hold on if you're there, but I want to talk about this ERISA loophole for a moment, because it's very important and, Elisabeth, it seems very unfair not to be able to sue a doctor or an HMO for malpractice. MS. BENJAMIN: It's incredible. It is this enormous loophole, just as you stated. Texas is actually the only state so far that's managed to say, "No way, we're not allowing it anymore," and it's sort of funny to come out of Texas. You always think of that as being a pro-business state. MS. GRASSO: Right. MS. BENJAMIN: But they're saying no, the HMOs are not shielded from liability. And what happens is that, say something happens to you, you sue because the HMO told your doctor, "No, I won't refer you to that specialist. I'm not going to let you get the biopsy that would have diagnosed you earlier with cancer," and you die, your estate can't sue directly the HMO who's made the decision. Instead, you're stuck suing that doctor, who you may like, who's trying his or her darnedest to get you the care you needed. MS. GRASSO: Right. MS. BENJAMIN: It's really unfair. MS. GRASSO: But changes are on the way? MS. BENJAMIN: Well, New York -- the New York state legislature didn't pass it. The state-controlled assembly did pass it, the senate did not. We're gearing up for a big lobbying season next year. MS. GRASSO: Okay. Well, let's go to our viewers' questions to see what your concerns are or perhaps problems that you've had with your own HMO. HOW DO HMOS AFFECT DOCTORS? Before we go back to the phones, I would like to be joined -- I'd like to talk to our next guest, Dr. Mitchell Kahn. He is a physician, an internist who is in an HMO plan. He is in private practice, affiliated with St. Luke's, Roosevelt, and New York hospitals here in New York City. Thanks for being here, Dr. Kahn. DR. KAHN: You're welcome. MS. GRASSO: Dr. Kahn, first of all, what made you decide to join and to be part of an HMO? DR. KAHN: Well, over a period of time, patients would come to me who were my regular patients and say, "Dr. Kahn, could you please join this HMO, because if you don't, we -- we won't be able to come and see you," and so it was really sort of patient demand. And for a while, I resisted it, because I didn't want to participate with an HMO, but patients began going elsewhere, sort of forced by the financial constraints to choose a doctor on the HMO panel, so I felt like I had no choice. MS. GRASSO: Doctor, what is the difference for you as a physician when you have a patient who comes to you who is completely, you know, a private patient, as opposed to a patient in an HMO? DR. KAHN: Well, I think that one of the things that people don't quite understand is that the term "HMO" is really kind of a misnomer. It's really managed care and really should be looked at that way, and the main difference is that when a patient comes in who is a private patient, I'm really doing whatever's necessary for that patient without any constraint, although the patient themselves may not be wiling to pay for something or think that it's worthwhile or justified, but it's about them and it's their decision. When I have a patient who's on a -- being sent from an HMO or the HMO is paying for it, then I'm really doing -- I'm really working, in this case, for the managed care organization, and there are many things which the HMO will not pay for. Now, one of the things that it's important to realize is it doesn't mean that the people can't get it done, it just means that the HMO will not pay for it. The way that managed care organizations have made such a huge amount of money over the last decade is by not paying for care they don't think is absolutely necessary, so that's the big difference, and I have to now pay attention to what the managed care organization or the HMO is willing to pay for, so that I may or may not be limited. I also have to clear with the HMO any expensive tests or certain referrals with the HMO before I send the patient. I would say that in most really sick people, the HMOs -- obviously, I don't allow them to interfere with my caring of the patient. I do what is necessary for the patient, but very often we have to do it and then fight with them later that they should have paid for some intervention. MS. GRASSO: Now, are you what's called a gatekeeper, a primary care physician? DR. KAHN: Well, you know, the term -- I am a primary care physician, which means that, you know, patients come to me first, and that what most people don't understand about managed care is that when someone goes to a specialist, it's supposed to be because their primary care physician feels that they, meaning the primary care physician, needs the consultation of a specialist. MS. GRASSO: Right. DR. KAHN: Which is sort of -- there's a difference between that and patients feeling like they need to go to a specialist. And, of course, the HMOs say that they provide all the medical care that the patient needs, and the problem is that, you know, what does the word "need" mean in this case? You know, "need" meaning making sure that they don't die is different from "need" meaning they're comfortable and they get optimal rehabilitation in the most comfortable setting, for example. MS. GRASSO: Right. DR. KAHN: And I think that, you know, that's the difference between an HMO patient and a private patient. MS. GRASSO: All right. Dr. Kahn, I hope you'll stay right there as we go to the phones and see what our viewers' concerns are, what problems they've had with their own HMOs. PROCEDURES NOT COVERED BY AN HMO MS. GRASSO: Welcome back to Legal Cafe. I'm June Grasso, along with my guests, attorney Elisabeth Benjamin in the studio and Dr. Mitchell Kahn on the phone. There've been so many recent changes in our health care system that sometimes it's hard to keep up with them. One thing is clear, though -- many of us now have to negotiate or at least get prior approval before seeing a doctor. Is there something wrong with that, or is it a reasonable attempt to manage our nation's exploding health care costs? We're taking your calls on the subject, and I have Erin from Maryland standing by. Thanks so much for holding, Erin. Q Hi. No problem. MS. GRASSO: Hi. Are you in an HMO, Erin? Q Yes, I am. I have a question regarding going outside of my HMO. MS. GRASSO: All right. Q I'm expecting my first baby in October, and I'd like to give birth at a birthing center, but it's outside of the plan, instead of at the designated hospital. My HMO has a contract and can allow me to go to the birthing center, but they don't want to exercise their right to let me go, even though my plan has nothing comparable. So should I sue or what can I do? MS. BENJAMIN: Well, I wouldn't sue. I would actually -- again, I think, you know, trying to tap into those state regulatory agencies or your employer -- I don't know if you have coverage through your employer or through a government payer, but there are -- there is a department of health that may be monitoring HMOs in your state. If you actually have a clause that says you should be able to go out to the birthing center, they -- I think if you call some people and start rattling their cages a little bit, they might cave, because it probably is pretty inexpensive compared to a hospitalization for them. MS. GRASSO: Dr. Kahn, what do you feel is the best way -- you said that you've had times where you've had a hassle with an HMO and had to fight for your patient to get reimbursed. What do you feel is the best way to approach them? DR. KAHN: Well, usually I can deal with the medical director, and usually there's a medical indication that I can use as leverage. I think that in this situation, it's -- I don't know, when you say the HMO, it's not clear to me whether you're saying the doctor won't refer it or someone at the HMO has denied it. MS. GRASSO: Well, let's ask Erin. Which is it? Is it the doctor or -- Q Well, the HMO doesn't want to exercise their right to let me go and my doctor -- DR. KAHN: Who at the HMO? I mean, your primary care physician has said no or -- Q No, my doctor doesn't want to help me get -- my doctor doesn't want to refer me, but I had her refer me anyway. She doesn't want to help me go to the birthing center and the HMO doesn't want to pay for it, even though they have a contract that says that they're allowed to send me if they choose. DR. KAHN: Yeah. Unfortunately, you know, if they have a contract that says if they choose, that may be a problem, and without the cooperation of your physician -- and I don't know whether there's any kind of medical reason that it might be more appropriate for you -- Q No, not at all. There's no medical reason. DR. KAHN: You know, then unfortunately the HMO's probably putting pressure on the physician not to cooperate in the referral, and I think that whether it's financial, which is the most common case that they -- that the doctor, some of that money that would be paid to the birthing center will come out of the doctor's pocket directly, and that's very common in most managed care contracts with physicians, that there are incentives to keep people within the system. Now, although it may make some sense to say, "Well, it's much cheaper to have the baby in the birthing center, that may not be the case, because they may have a contract with the hospital that is capitated. For example, if they have 10,000 members and they say, "Okay, we'll pay you X amount of dollars for the year to deliver all the babies born to our 10,000 members," in which case, having one more baby in there doesn't cost the HMO any money, so -- whereas if you go outside to the birthing center and pay for it yourself, you save the HMO no money, either, really, and you've saved the hospital some money, because they're not spending the resources on delivering your baby. So they have a financial incentive to try to dissuade you from doing anything. Now, in terms of your legal rights to sue, if you've signed a contract that says that they are the ones that have the obligation and that's a legal matter, you know, ask a lawyer, but unfortunately people don't understand that HMOs and managed care are about trying to restrict the utilization of resources, and there are many kinds of pressures put on the physician and, in this case, on you. MS. GRASSO: Okay, Erin. Good luck to you. MY HMO IMPOSES A SPENDING CAP ON TREATMENT Our next caller is Shirley from Virginia. Good morning, Shirley. Hi. Do you -- are you in an HMO? Q Yes, I am. MS. GRASSO: And do you have any problems? Q Oh, do I have problems! MS. GRASSO: Oh. I guess I asked the right question. Well, what's your question, Shirley? Q Well, I'm a cancer patient. I was originally diagnosed to have appendicitis, and they found I had ovarian cancer. MS. GRASSO: Wow. Okay. Q Well, my treatments -- I had to be hospitalized for my chemo, which was $200 every time I went to the hospital just for my chemo, because I had to stay overnight. MS. GRASSO: Right. Q I was told that there might be a ceiling as to how much I had to pay. I was in the hospital for 11 times last year, which was $200 each time, plus I had to pay my -- the general -- my primary care physician and the oncologist each time, which compounded all the bills. I now find out that -- well, first of all, my first primary physician dropped me because he was not making enough money. I wasn't going to him, I was only going to the oncologist. So they sent me a certified letter letting me know that they were going -- they were dropping me as a patient, and then -- MS. GRASSO: The primary care physician was dropping you? Q Yes. Right. MS. GRASSO: Okay. Are you still in this HMO, Shirley? Q Unfortunately, I have no choice. MS. GRASSO: Now, so what is your complaint? What is your question? Q I have all these bills that the HMO is not paying, and I still have to go to -- I still have cancer. MS. GRASSO: All right. Okay, now, what about, Elisabeth, this cap that she's talking about? MS. BENJAMIN: I don't know. It sounds like it's based on the contract that the HMO has with her employer. I think the thing -- what I would do if I was Shirley, and with the limited facts we have from what she's told us -- is I would go to the personnel department of my employer and say, "Look, this is the problem. Can you help me advocate with the HMO?" and see if your employer will help lodge a grievance on her behalf. I mean, she can launch her own grievance and try to say, "Look, I'm stuck with all these bills," when my employer -- and if she's with a big employer, if they have some market power -- and try to get the employer to also write a letter on her behalf, saying, "We expected, you know, this company to provide full care for Shirley. Shirley still has cancer. You haven't cured the cancer and she's stuck with the bills." MS. GRASSO: I mean, I've never dealt with an HMO personally, but my -- I thought the whole concept was that you didn't have to pay enormous bills if you had a verifiable illness, which obviously she does. MS. BENJAMIN: I think she might be going out of network, and if her PCP has dropped her, she no longer has -- the primary care physician has dropped her -- her gatekeeper dropped her, then she may not have the approval to be going to the oncologist and these other people. MS. GRASSO: I see. MS. BENJAMIN: She may or may not, and so that's why she needs to get some help and to get the boss involved and have people advocate. Now, she might not want her personal business to be aired with her employer -- if then -- if that's true, then she should do the other thing that I've been recommending, which is going to, you know, other third-party advocates like the government regulators or someone like that to help her lodge that grievance. MS. GRASSO: All right. Good luck to you, Shirley. TIPS FOR CHOSING AN HMO MS. GRASSO: We're almost out of time, so let's take a moment to highlight some of the legal points we've discussed this hour. We'll call this Elizabeth Benjamin's House Blend for a Healthy HMO. First, be choosy. Investigate all of your options when selecting an HMO, doctor, and, of course, a treatment, and keep in mind that you are your best advocate, so be aggressive when you have a problem, especially if you have an urgent medical need. Finally, if you have a problem with your HMO, don't forget to file a complaint with your local health department. I want to go to Dr. Mitchell Kahn on the phone. Doctor, we've run out of time, just a few moments left. Tell us the best thing about being in an HMO for a patient? DR. KAHN: Well, I suppose it's -- I can't really think of the best thing being in an HMO. You know, the HMO is really, you know, a financial construction designed to control health care costs. It came up with a very good name -- health maintenance -- and I suppose that compared to many other insurance plans that have been offered, it does provide for more screening tests than traditional indemnity policies, and certainly the premium costs are lower than for most traditional indemnity insurances. MS. GRASSO: And for medicine -- if you have to get medicine -- DR. KAHN: Well, the patient very often doesn't have to pay for the medicine themselves -- or there's a small co-payment. The incredible explosion of medications that have come out in the last two decades, with hundreds of new medications available at very high prices, you know, being in an HMO which does pay for your prescription medication may save patients -- a substantial percentage of their premium. MS. GRASSO: Dr. Kahn, thanks so much for being here -- DR. KAHN: You're welcome. MS. GRASSO: Elisabeth Benjamin, it's been a real pleasure having you here, and your knowledge in this area and your ability to really call up some resources is quite amazing. Thanks so much. We appreciate it. Come back soon. That does it for our look at HMOs, but there's a lot more coming your way on our Tuesday Legal Cafe.