Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, December 14, 1994 TAG: 9412140112
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
Phyllis Cothran, Trigon president, said the new system will provide "a two-way educational stream" between the Richmond-based health insurance company and its 970,975 policyholders. The company will explain what it does, she said; the councils will tell the company about customers' needs.
Cothran was interviewed during a Tuesday visit to Roanoke with Trigon Chairman Norwood Davis.
The head of the company's new department will become a consumer advocate, Cothran said, helping the company to change its business materials or practices that consumers find hard to understand.
She described as "a wake-up call" the problem with providing refunds to consumers for a portion of reduced co-payments it had received from hospitals since 1981.
The negotiated lower rates were used to reduce premiums in the competitive marketplace instead of being refunded directly to affected customers, Cothran said. The refund program was mandated by the State Corporation Commission.
That was a common practice in the industry, so now Trigon will be ahead of its competitors in Virginia, Cothran said. She said that Trigon actually pays twice: in the form of lower premiums and now in direct refunds.
Cothran said some practices develop over time that do not harm consumers but are difficult to explain. She said no company should have a practice that cannot be explained in two sentences in a newspaper or brochure.
As of Monday, the company had mailed 413,583 letters to consumers who might be affected by the refund program. It also had placed 384 ads in 120 newspapers around the state. As a result, the company received 100,791 telephone calls about the campaign by Monday.
Trigon had received 124,786 claim forms. Of the claimants, 84,358 had been paid a total of $10,957,864. Cothran said the average refund has been just under $200. Davis himself had a refund of $64, he said.
Of the claims, 11,167 were rejected as ineligible and, of that number, 192 had filed appeals.
The deadline for filing claims was extended from last week to Jan. 7. The refund program covers hospitals and other treatment facilities, but it does not include bills from physicians and practitioners.
The practice stopped Jan. 1; the Virginia General Assembly outlawed it as of July 1.
Davis said that the Roanoke area has been "protected from" health-maintenance organizations in the past, but now change will come very quickly. Three HMOs have announced plans to enter this market, and he believes two others might follow.
Trigon has formed a partnership with Carilion Health Systems to create one of the HMOs in the Roanoke Valley.
Davis predicted a rapid restructuring of health care with hospitals merging and buying doctors' practices, and managed-care companies buying hospitals and practices. He said to expect integrated health systems with companies providing financial, health and other types of managed care.
But Davis said Trigon plans no layoffs of its employees, including the 900 working in Roanoke. He said, however, that unnecessary jobs might be eliminated.
by CNB