CHOOSING A HEALTH CARRIER: ELIGIBILITY, BENEFITS, AND UTILIZATION
by Patrick Powers
Today it's almost impossible to read the newspaper, watch the news, or attend a social function without hearing something negative about Health insurers. Typical complaints include:
- Necessary medications and treatments aren't covered.
- Student dependents, living at colleges hundreds of miles away, are covered for emergency care but not for routine care.
- Members must endure long waits for referral authorization to see specialists.
- Physicians' nurses are kept on hold for excessive time periods waiting for precertification approvals.
And the list, it seems, goes on forever.
The most complicated and difficult areas to assess when selecting a Health carrier for a valued client are: who's covered, what's covered, and what's required of members to ensure coverage before receiving medical care.
Confusion arises because of the conflicting interests of managed care plans, the members, and their physicians. Insurers have to balance their need to produce net income with their obligation to provide health-care services. On the other hand, members are concerned about simply getting treatment, and physicians want to practice quality medicine.
There are no easy answers, no magic bullets. Before choosing a carrier to entrust with a client, an agent should study the insurance policy - sometimes referred to as the Group Health Maintenance Certificate or Certificate of Coverage - in detail. Let's begin by reviewing eligibility issues.
Contrary to many consumers' assumptions, the definition of who's eligible and when varies according to the carrier. For example, most insurers cover a dependent child up to age 19, or to age 23 if the child is enrolled full-time in an accredited institution or trade school. Some carriers require that a child under 19 who isn't a student live at home for coverage to remain in force. Others will continue to cover dependents under age 19 regardless of their residence.
All plans will usually cover the newborn of the subscriber or the subscriber's spouse, but not the newborn of a dependent. To effect coverage, the subscriber must enroll the newborn within 31 days of birth and pay the applicable premium, if any, from the date of birth. Some plans will automatically enroll the newborn (they use the precertification for the baby and delivery to trigger this) if the subscriber is already paying for family coverage; other carriers won't.
The schedule of benefits, limitations, and exclusions should also be closely reviewed. The benefits section may state that medically necessary care and services are covered, while language in the exclusions section may exclude coverage for certain medically necessary treatment. Most plans won't cover medical care that's necessary due to complications occurring from a noncovered procedure. For instance, plans will cover the treatment of a wound infection resulting from surgery, but only if that surgery was medically necessary. Also, generally plans won't cover obstetrical services for a dependent child, although this is care that's definitely medically necessary.
In the area of utilization management, there are several issues to research about the various carriers being considered. Here are some important questions to ask each one:
- Do you return phone calls within a reasonable time?
- What is the standard for the time you take to either approve or deny a utilization request, and how does your performance compare to other carriers?
- What is the process for appealing a decision?
- Does the plan use an independent review organization to resolve disputes?
Another useful tool for researching utilization management is the HEDISÒ reports (Health Plan and Information Set, a system of performance indicators developed by the National Committee for Quality Assurance). These standard reports can be used to compare several carriers' utilization performances on an apples-to-apples basis. HEDIS reports are usually available from state insurance departments, managed care trade associations, and local business groups.
Eligibility, benefits, and utilization management are complicated and detailed issues. Serious problems can arise in these areas, not the least of which are E&O claims. When selecting a Health carrier, an experienced P/C broker would be well advised to seek the assistance of a Life/Health underwriter, even if it means sharing the commission. Although the compensation may be less, you won't have to read things like a schedule of benefits, limitations, and exclusions.