Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, April 17, 1994 TAG: 9404190005
SECTION: HORIZON PAGE: D-1 EDITION: METRO
SOURCE: By FRAN SMITH SAN JOSE MERCURY NEWS
DATELINE: LENGTH: Long
She whispers this confession, cheeks flushed with embarrassment. She does not like to admit her private panic, to dwell on the dark side. She prefers to count her blessings. She recited them like a litany in the weeks after she learned she had breast cancer.
She was only 45, strong, healthy all her life; the doctors gave her a good prognosis. She had a supportive husband and two great kids. She was tolerating the chemotherapy reasonably well; she did not lose all her hair. And unlike some people she knew and many others she'd read about, she had health insurance, a generous policy through a top-rated firm.
But on Jan. 18, 1990, with $35,000 in unpaid bills and three months of chemotherapy ahead, Carolyn and Fred Mountford of Monterey, Calif., received a letter:
``Gentlemen:
``A routine investigation of the claims submitted by Carolyn has revealed information with respect to her medical history which would have had a material bearing on our underwriting decision, had that information been provided to us at the time of enrollment.
``The insurance carrier has elected to rescind the dependent coverage ... on the basis of material misrepresentation or omissions on the enrollment form."``Enclosed you will find check 3147, in the amount of $588.38, which represents reimbursement in full for the insurance premiums, minus any benefits paid on behalf of Carolyn.''
Her insurance was canceled? Because she'd lied on the application? Carolyn felt shattered. ``It's a horrible time,'' she says. ``And then you find out you're not even covered. And it's just, for what? What did I do?''
The answer would stun her. The insurer backed out of a contract and refused to pay for cancer treatment because Carolyn had not disclosed a longstanding complaint: menstrual cramps.
President Clinton's ambitious health-care plan is in trouble for one fundamental reason: Too many people believe they have too much to lose if sweeping change occurs. True, most Americans say they worry about the millions (6 million, 37 million or 58 million, depending on who's counting) without benefits. But most people, especially at the middle and higher incomes, have insurance and a measure of confidence that it will pay for the care they need. They fear that ``reform'' would destroy the hallmarks of U.S. health care: high quality and choice.
Opponents of the Clinton package play on this anxiety. As part of a $14 million advertising campaign, the Health Insurance Association of America presents ``Libby'' and ``Louise'' as they ponder the Orwellian prospects of a strangling government medical bureaucracy and limited choice of plans. In newspaper ads, the American Medical Association asks frightfully: ``Would you rather trust your life to an M.D. or an M.B.A?'' On Capitol Hill, a growing chorus calls the health-care ``crisis'' a fantasy.
People wind up without coverage for many reasons, most of which have been written about at numbing length. They include escalating medical prices and cost-cutting by insurers; layoffs, which wipe out not only jobs but also benefits; and strict underwriting that drops people when they get sick. But one of the greatest threats to the average policy-holder has received little public attention: a 1987 Supreme Court decision that destroyed most consumer leverage against health insurers.
Under the ruling, most people who get coverage through work - roughly 85 percent of Americans who have insurance - can sue their carrier only for benefits it should have paid. They cannot sue for emotional suffering, no matter how outrageous and cruelly timed the denial. They cannot sue for economic distress, even if they lost a home because they spent every cent on medical bills.
They cannot sue for punitive damages. Often, people do not recover the legal costs of collecting what they are owed. And if a patient dies while the insurer stalls on authorizing treatment, the family cannot sue for wrongful death.
The law - the Employee Retirement Income Security Act - grants a kind of immunity to insurance companies. They may refuse to pay for lifesaving treatments and drag out disputes for years; at most, they will have to pay what they should have paid from the start, plus the policy-holder's lawyer fees if the judge feels generous. And, by the way, they keep the interest they earned. Is it any wonder that insurers don't always act with speed and good faith?
To be fair, health insurers pay millions of claims promptly and fully every year. And industry surveys suggest that satisfied customers outnumber disgruntled ones. Then again, healthy customers outnumber sick, demanding, expensive ones. At the worst moment in their lives, more and more people find themselves at war with the companies that promised to protect them.
This is the story of four of those people. All had coverage not through fly-by-night operators, but through well-respected, solvent companies. All tried to work within the bureaucracy, to follow their carrier's often arcane rules. Their troubles may seem mild in the scheme of health-care horrors - nobody got dumped from a hospital or watched a sick child suffer without medicine for lack of money. Nevertheless, these cases hold a scary message for all of us who feel secure, lucky, because we have insurance: Anyone may be only an illness away from a financial nightmare, for reasons too Byzantine to imagine.
Carolyn Mountford: Failure to disclose
On March 31, 1989, Carolyn Mountford had a gynecological exam and received a clean bill of health. On May 16, the Monterey, Calif., couple applied for an insurance plan underwritten by Boston Mutual Life Insurance Co. and administered by Brennco Benefits Administrators Inc. The questionnaire asked: ``Within the past two years, have you ... seen or consulted with, or received or been recommended to receive treatment from a physician ... or other practitioner of the healing arts; or taken medication or been recommended to take medication?''
Yes, the Mountfords replied: female exam, normal.
Their policy took effect July 1, 1989. In September, Carolyn felt a lump the size of a quarter on her left breast. Within days, she was swept into the vortex of modern cancer treatment: tests, specialists, surgery, drugs and stacks of bills submitted to the insurer. But instead of paying, Brennco ordered her gynecologist to send her file and searched for reasons to drop her.
If you consider every ache, mishap, oddity you've mentioned casually - to say nothing of confidentially - to your doctor, you will understand what happens when an insurer goes fishing.
In canceling Carolyn's coverage, Brennco cited three problems: (1) ``History of fibroid uterus.'' (2) ``Urinary incontinence.'' (3) ``Severe dysmenorrhea,'' pain during menstruation. But, her only enduring complaint was monthly cramps, and neither they nor fibroids nor an inconsequential loss of bladder control had anything to do with breast cancer.
Boston Mutual declines to comment on the cutoff.
The Mountfords appealed. Carolyn's gynecologist explained in a letter that her March exam had been ``entirely within normal limits'' and showed ``no chronic problems and certainly no pre-existing conditions.'' The couple's insurance agent wrote, too, calling the cancellation ``irresponsible and unjust.'' He pulled other customers out of the plan.
Brennco did not budge.
The Mountfords are half-owners of Sam's Fishing Fleet, which runs trips from Monterey Wharf. It's tough work: start at 4 a.m., home around sunset, no day off from March through late November. They did well over the years and saved money. They now feared that their world would collapse.
On March 23, 1990, the Mountfords sued Brennco and Boston Mutual. Lawyers for the companies did what defense attorneys always do in these cases: They argued that the policy was an employee benefit and therefore governed by ERISA.
They lost on a technicality, which allowed the Mountfords to press for their unpaid benefits plus damages. The case settled eight months later for $90,000, roughly twice the medical bills. Brennco reinstated Carolyn.
But the story does not end there.
When the Mountfords bought the policy, they paid $164 a month. After Carolyn was dropped, Fred's premiums cost $103. As the fight dragged on, his premiums soared - to $242, $277, $398 in 18 months. (``Current premium levels are inadequate to support the level of claim payments,'' explained the company that had yet to pay a Mountford claim.) In December 1991, when Carolyn returned to the plan, the premiums jumped to $753. Sixty days later, another increase: $956 a month.
Once again, Fred and Carolyn, who now did have a pre-existing condition, shopped for a new policy. After a year on the waiting list, she got into the California Major Risk Medical Insurance Program, the state's health plan for the uninsurable.
Mary Hauger: Part-time employee
Mary Hauger received a cancellation notice in the spring of 1989, while recuperating from a heart attack and open-heart surgery. She was 65. She had $69,000 in medical bills and a pile of threatening letters from creditors.
Why did the nation's 12th-largest group insurer drop Hauger? Officials at Western Life Insurance Co. said she had misrepresented herself as a full-time employee. But her employer calls the allegation ludicrous.
On Sept. 27, 1988, Hauger started work at Technalloy. She filled out an insurance application but neglected to include her weekly hours. On Dec. 2, she suffered a severe heart attack. On Dec. 5, 7 and 16, the insurer authorized her treatment at Good Samaritan Hospital in San Jose. Only later, Western Life officials said, did they notice the omission on her application and realize that she worked less than the 30-hour weekly minimum required by the contract.
``If hours worked per week is so important,'' Technalloy's president wrote, ``surely your staff would have noticed their absence and returned the application for completion. Instead you accepted Ms. Hauger . . . and have billed us premiums.
Western Life returned eight months of premiums, $1,614.62. Technalloy refused to cash the check.
There is no written record that Western Life gave Technalloy the OK to cover a part-time worker. But one fact is beyond dispute. Even before she lost her insurance, in the months of skyrocketing bills and vague delays from Western Life, Mary Hauger began falling apart.
Donna Taylor (Hauger's daughter): ``I'd come home after school and she'd be sitting at the table crying. She'd have all these bills open in front of her. I was trying to reassure her. `Don't worry about these things. ... One way or another your bills are going to get taken care of.' But she couldn't understand. Or she understood but it didn't hit. She was just not used to having bills. She was from that generation that always paid everything on time.''
In April 1989 Hauger landed back in the hospital because of irregular heartbeats. Doctors gave her heart an electric jolt and sent her home with advice: Relax. Take a class in stress management.
On May 30, 1989, Western Life rescinded her policy. On June 16, Taylor came home from work and found her mother dead in the kitchen from a heart attack.
A spokeswoman for Fortis Benefits Insurance Co. - Western Life's new name - referred a request for an interview to the company's attorney. She did not return repeated phone calls.
Taylor knows her mother had a damaged heart and may have died no matter what. But she can't help thinking that the insurance mess contributed to Hauger's death. ``It just drained her,'' Taylor says. ``She didn't have a fighting chance.''
Samuel Hamilton: Not medically necessary
Samuel Hamilton, son of Michael and Elaine Hamilton of Los Gatos, Calif., was born with funnel chest, or pectus excavatum, a severe indentation of the chest wall. His parents held off on corrective surgery - a brutal operation involving removal and reconstruction of the ribs and breast bone - in hopes that the condition would improve as Sam grew.
But it didn't. Instead, the chest caved inward, just inches from the spine, and pushed Sam's heart leftward. He was lethargic and prone to infections, including three bouts with pneumonia. As he approached adolescence, his pediatrician warned that a growth spurt might cause his chest to collapse. The doctor referred Sam to a Lifeguard HMO pediatric surgeon.
Lifeguard, based in Milpitas, Calif., is an independent practice association. It has contracts with physicians throughout the community, who treat Lifeguard members at discounted rates. Members (actually, their employers) pay a set monthly fee; in return, Lifeguard promises to cover ``all medical services rendered'' by its doctors. This is the standard HMO arrangement, and it creates an imperative for any organization, including the not-for-profit Lifeguard: no ``unnecessary'' tests or procedures.
What, exactly, is unnecessary? Who decides? These are not merely abstract policy questions but painful, immediate dilemmas for a growing number of HMO members who cannot get the care they - and often their doctors - say they need.
Three Lifeguard physicians - two pediatricians and a pediatric surgeon - examined Sam. All recommended surgery. But in October 1990, Lifeguard's medical review committee overruled them.
Surgery for funnel chest is controversial. Left untreated, some children will grow up healthy and others will develop heart or lung problems, but doctors cannot say with certainty which kids fall into which group. There are no standard tests to measure impairment in these children. There are no large controlled studies that clearly document the benefits of surgery.
In the most thorough review of small studies over 30 years, Dr. Robert Shamberger of Boston Children's Hospital found persuasive evidence that children who have low tolerance for exercise, as Sam did, improve after the operation. Nevertheless, some doctors believe the costs and risks of surgery outweigh the advantages.
Lifeguard's review committee did not examine Sam; members read the surgeon's letter and Sam's pediatric file. The committee did not look at X-rays, request specific tests or offer advice to parents worried about a lethargic teen. (Later, Dr. Robert Burnett, Lifeguard's president at the time, assured the Hamiltons, ``It is not unusual for children of Samuel's age to have nonspecific behavior symptoms such as fatigability.'') The committee denied the surgery in a single sentence:
``Although sympathetic to the patient, the performance of this repair is totally a cosmetic endeavor and not covered by the plan.''
Stymied and angry, the Hamiltons went back to the pediatrician and got a referral to an expert they thought Lifeguard might believe, Dr. Stephen Shochat, chief of pediatric surgery at Stanford University. He did high-tech chest photography and recommended the operation.
Now four doctors concurred. Sam was 15. His parents decided they could not wait much longer. They scheduled surgery for Aug. 7, 1991, giving them time to appeal to Lifeguard, leaving Sam a month to recover before starting high school.
They submitted Shochat's recommendation to Lifeguard.
The review committee reconsidered. The decision: Get a special lung test on Aug. 9. The Hamiltons received the request on Aug. 5, the night before Sam was to enter Stanford Medical Center. Elaine called the lung specialist: Can we move up the test so Sam can take it before he's supposed to have surgery? No.``We were caught in a Catch-22,'' Elaine says.
The Hamiltons went ahead with the operation and sent the bill to Lifeguard. The company rejected it, now on two grounds: (1) Not medically necessary. (2) Treatment obtained outside the system - Stanford was not a Lifeguard provider - without pre-approval. In May 1993, the family sued Lifeguard, seeking to recoup $33,000. The case is pending.
Carley Christie: Going outside the system
At age 9, Carley Christie got very sick. Her parents, Katherine and Harry, wound up at war with TakeCare Health Plan in California and the Palo Alto Medical Clinic.
As presented in the legal battle, the issues seem agonizingly complex. They involve the precise meaning of contractual language, the relative qualifications of two doctors and the technicalities of treating a rare childhood kidney cancer, Wilms' tumor. But in a sense, the fight boils down to a simple question:
Who should operate on Carley - a surgeon with no Wilms' experience or a nationally known expert in the disease?``You only get one shot at this tumor,'' Kathie says.
TakeCare, based in Concord, is one of the fastest-growing health maintenance organizations in the country. The HMO Buyer's Guide ranks it among the 10 best. Members pay a monthly fee and select a ``participating medical group,'' such as the Palo Alto Medical Clinic, where they get all care. If they need specialty services that the clinic does not provide, they must get their doctor to refer them outside.
The Christies, of Woodside, Calif., joined for more prosaic reasons. They lost their insurance when Harry switched jobs. Kathie sells real estate, and her company offered only one plan, TakeCare.To grasp Carley's case, a time-line helps.
In late November 1992, Carley developed nausea and a fever. Infection was initially suspected. On Dec. 21 an Ultrasound detected an abdominal mass and on Dec. 29 a CAT scan showed a mass. The family practitioner referred Carley to Dr. James Bassett Jr., a urologic surgeon at the Palo Alto Clinic. Antibiotics were prescribed to rule out infection. Under Bassett's order, a needle biopsy was performed and on Jan. 25 Wilms' tumor was confirmed.
Bassett scheduled surgery for Jan. 29. He referred the Christies to Dr. Michael Link, a children's cancer specialist at Stanford University who would treat Carley throughout chemotherapy. Her grandfather, a retired pediatric surgeon, went with the family to see Link. And here began the trouble.
Carley's grandfather called old colleagues who said Stanford's Stephen Shochat should operate; after that, Bassett would not do. But the Christies say they decided to switch surgeons after they learned about the federal guidelines for treating Wilms' tumor.
Thirty years ago, almost all children who had the disease died. Today 95 percent of patients live. The turnaround stands as one of the greatest triumphs in cancer research. Experts credit several factors: advances in drug therapy; better radiation techniques; and a 20-year project, the National Wilms' Tumor Study, that tracks nearly all kids with the disease. The study has developed a precise approach to treatment, endorsed by the National Cancer Institute.
``A multidisciplinary team of cancer specialists, including pediatric surgeons ... and pediatric oncologists, is essential to maximize the potential for cure,'' the institute advises.
Carley's parents saw their options: Bassett, who routinely operates on children from the clinic but is not a board-certified pediatric surgeon, or Shochat, chief of pediatric surgery at Stanford, member of the hospital's Wilms' team, surgical consultant to the national study, a doctor who advises surgeons nationwide on difficult Wilms' cases.
There was no contest. Carley's parents met Shochat on Jan. 27. ``I knew we had the right man,'' Kathie says. But there was also no choice. Although Shochat is a TakeCare doctor, Carley needed a referral. Doctors at the Palo Alto Clinic, which had not seen a Wilms' case in years, refused. They said Carley was receiving ``appropriate'' care under Bassett.
On the morning of Jan. 28 Shochat examined Carley and cleared his calendar to operate the next day. Harry called the clinic repeatedly, pleading for a referral. Carley entered the hospital that afternoon. Her parents donated blood. The clinic summoned Harry to meet the acting director of managed care, an ophthalmologist, to discuss the child's care.
``I said, `I can't leave,''' Harry recalls. "'My wife and daughter are upstairs. They're both hysterical. We're emotionally spent. You want me to leave my wife and daughter and talk to this guy?' ''
That evening the clinic offered a compromise - both surgeons can participate. The next day, Shochat operated. Bassett dropped by toward the end. Later he explained: ``I wanted to see what the tumor looked like.''
Harry and Kathie knew TakeCare would balk at paying Shochat's fees, roughly $3,000. But they expected the plan to cover the operating room, anesthesia, drugs, intensive care - costs that TakeCare officials would have picked up had Bassett operated. ``In my wildest dreams I never thought they'd deny the hospital fees,'' Kathie says.
TakeCare refused to pay a dime, saying the family had violated the contract by stepping outside the system without authorization. The Christies faced a bill of $47,000.
Carley spent most of the first five months of 1993 in the hospital, fighting infections and undergoing chemotherapy. She lost 30 pounds and every blonde hair on her head. Kathie never left her side.
Harry spent those months writing TakeCare, calling lawyers, and contacting insurance regulators, medical organizations, Sen. Dianne Feinstein, D-Calif., and anyone else he thought might put pressure on the HMO. It didn't bend. But Harry did have one success: Stanford reduced its bill to $21,000, the discounted rate that the health plan would have paid.
Last fall, the Christies took the case to arbitration. (TakeCare members sign a pledge to submit disputes to binding arbitration, rather than sue.) Only through Bassett's three-hour deposition - for which he charged $375 an hour - did the Christies learn that he had never treated the disease.
Bassett maintained that he was qualified to do the operation. Although Wilms' tumors are rare, the operation itself involves ``standard'' techniques - making an incision, exploring the abdomen and removing the kidney and lymph nodes, he said. ``I have a good deal of experience doing all of these things.'' But he told the lawyer that he had not reviewed the federal advisory on Wilms' tumor and disagreed that Carley required a pediatric surgeon.
During a hearing before the arbitrator, the Christies learned something else. Cancer specialists almost never order a biopsy on a suspected Wilms' tumor, as Bassett had, because it can worsen the condition. Link, Carley's oncologist, testified (for free) that she likely had a Stage 1 tumor, the easiest to treat, when she first went to the clinic. A biopsy ruptures the capsule of the tumor and, by definition, bumped Carley to Stage 2.
``So instead of chemotherapy for six months, she has to have chemotherapy for 15 months,'' Link says.
Bassett did not respond to requests for an interview. TakeCare did not return numerous phone calls. Dr. David Druker, executive director of the physicians' group at the Palo Alto Medical Clinic, agreed to discuss clinic referral practices but not the Christie case. ``We spend several million dollars a year on outside referrals,'' Druker says. ``We're pretty disposed to refer when we feel it's necessary.''
TakeCare urged the arbitrator to consider only two questions: ``Did Christies comply with contract conditions; was it medically necessary to use Dr. Shochat as primary surgeon?'' But one wonders whether such cut-and-dried formulations produce the soundest medical decisions when a family confronts a s
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by CNB