Insurer, Medical Group Point Fingers at Each Other

There seems no question that mix-ups, delays and fuzziness over what’s covered and what’s not are behind much of the popular dissatisfaction with managed care.

Part of it is uncertainty over just where the responsibility of the insurer, the health plan, stops and where that of the medical group it contracts with to provide the patient care begins.

There is also a widespread suspicion that the insurer or the medical group frequently will use almost any excuse to refuse to pay benefits, at least until persistent pressure induces it to do so.

A doctor I talked to about this, who requested anonymity, said:

“Unless it’s absolutely clear cut [in the insurance policy] that there’s no way they can refuse a service, if there’s any question whatsoever, they’ll either call it an experimental non-covered procedure, or they just won’t act on it. The result is a protracted period of uncertainty.”

All of these factors seem present in the case of Susan Shannon, a San Fernando Valley resident who, at the age of 32, has had three miscarriages and was told by her physician that she needed tests on her immune system to determine a treatment that would allow her a successful pregnancy.

When she began seeking authorization for the tests, costing an eventual $1,169, in January, it was her understanding that they would be covered under her employer-paid policy with PacifiCare but that the treatment itself probably would not be, she says.

It took more than two months of pleas to the Bay Area Community Medical Group (with 45,000 patients, mainly in Santa Monica) and--both

Shannon and Bay Area say--to PacifiCare (which has 2.2 million policyholders in California) before the tests were authorized.

The insurer and the medical group cannot agree on when they first consulted on the authorization. PacifiCare says it was March 9. Bay Area says contact took place “several times” much earlier.

After the authorization, which came to Shannon from Bay Area in March, another month passed, and then she was informed that payment for the tests, even though authorized, had been denied.

She was also told that authorization for a second round of tests, to determine whether the treatment had been successful, would not be forthcoming, because PacifiCare considered the new tests to be part of the treatment and not covered.

Shannon recalls, “I kept calling the medical group, and they’d tell me the holdup was with the insurer. The insurer kept saying the medical group needed to make the decision.

“It was like a game of monkey in the middle. Every time I called, they’d blame the other party.”

The medical group makes any payments as part of capitation arrangements under which PacifiCare pays it a set monthly fee for treatments it performs for all its PacifiCare-insured patients.

Just because Bay Area agrees to pay for a special test or treatment doesn’t usually mean it can get extra reimbursement from PacifiCare.

In recent days, two months after payment for the first tests was denied after being authorized, Bay Area spokeswoman Erin Fullerton said the medical group would partially pay for the first round of tests.

Shannon would like to appeal denial of authorization for the second round. But to do so, she requires a denial in writing. She says she has asked Bay Area for that since April 10 without result.

In exploring this matter, I soon discovered that Bay Area was blaming a lack of clarity in policy terms set by PacifiCare for the twists and turns in Shannon’s case, while PacifiCare was blaming Bay Area.

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A revealing comment was made by Fullerton when I first contacted her about Bay Area’s role and observed that this seemed to be a classic case of mix-ups between the insurer and the medical group.

“Unfortunately, that’s what seems to happen,” she said. “We’re confused by what we expect of the insurer, and the insurer is confused by what he expects of us. And the patient falls between the cracks sometimes.”

PacifiCare stated emphatically that it was entirely up to Bay Area to decide, under its contract, what tests it would pay for.

“We haven’t approved or denied anything,” said PacifiCare spokeswoman Cheryl Brady.

But Dr. Bernard Katz, Bay Area’s medical director, said that the terms of the policy were ambiguous and that in order to decide what obligations it had, Bay Area had to seek the advice of PacifiCare on the policy’s content and reach.

Generally, when patients talk with PacifiCare, they deal with its member services department, but when Bay Area talks with PacifiCare, it is referred to the benefit interpretations department.

Unfortunately, both Katz and Shannon said, the two departments sometimes differ in their views and no clear answer is forthcoming.

“I think that’s what happened in this case,” said Katz. “We went to the health plan for assistance in interpreting the benefit coverage that the patient had purchased, but we got confusing answers.”

I asked Walter Zelman, president of the California Assn. of Health Plans, for comment on the patient frustrations that seem inevitable in such situations.

Zelman agreed with PacifiCare that under California’s managed care system, the responsibility for deciding what will be compensated for lies with the medical group, not the insurer.

But this is often misunderstood by the public, he said.

“The public doesn’t really understand the relationship between the insurer and the medical group,” Zelman lamented. “That has tended to create a considerable amount of confusion. The patient often doesn’t know who is responsible.”

Yes, but examination of the Shannon case indicates that confusion is not confined to patients. There seems plenty elsewhere as well.

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Ken Reich can be contacted with your accounts of true consumer adventures at (213) 237-7060 or by e-mail at ken.reich@latimes.com.