Health Insurer Discrimination Against Persons with Chronic Diseases

The discovery wars of tomorrow will include plaintiffs seeking access to existing and future analytic and predictive databases and models operated by insurers. Why? In part because the insurers are further ramping up the use of predictive analytics, according to a March 1, 2106 article in Carrier Management.  A key excerpt from its states:

“Some additional predictive modeling findings from the survey [of insurance companies]:

  • About 28 percent of respondents said they’d use predictive modeling for fraud potential. That will jump to 70 percent in two years.
  • Approximately 10 percent said they use the technology to calculate litigation potential. That jumps to 61 percent two years from now.
  • While 18 percent said they rely on the tech for marketing and advertising, that number grows to 52 percent in two years.
  • 42 percent said that big data helps with pricing, underwriting and risk selection, but 77 percent expect it to do so within two years.
  • 60 percent said they expect big data to help inform their management decisions two years from now, up from 19 percent today.
  • 58 percent said they envision big data helping their loss control and claims management within two years versus 17 percent now.”

Access to “big data” is important to multiple aspects of claiming and payments systems. For example, secrecy in data helps some health insurance companies avoid analysis and compilation of data on how often they deny access to stem cell transplants to persons with cancer. Blocking access to data also helps health insurers make it harder for patients and/or doctors to learn if they’ve been systematically cheated out of payments.  Similarly, some property damage insurers seek to block access to “data” on claims and payments after “big storms,” and rewriting of expert reports to deny payments to persons with damaged property. Secrecy also is thought to help litigants on all sides of many issues as they try to take advantage of actual or perceived asymmetries in access to information. In view of these realities, it is therefore no surprise that litigants on all sides tend to seek and argue for data secrecy that blocks access by groups interested in examining “big data” for whatever it may reveal about claims for and payments of money.

Sadly, the desire for secrecy is especially strong among the asbestos bankruptcy trusts that hold the most “big data” on asbestos claiming. This is especially frustrating because once upon a time, David Austern (of the Manville Trust) and some other trusts actively disseminated the “big data” they held on asbestos claiming. Indeed, back in 2009, I described in detail the Manville Trust’s regrettable retreat into secrecy through actions of its Trustees (not David), and cited to some of the obligatory references on the value of sunlight.

It is easy to doubt that society benefits from secrecy on the longest running and most costly “mass tort” in history, which in general has failed to serve the interests of “future claimants.” In other contexts, the federal government and others seek to increase disclosure of big data to encourage more intelligent and wide-spread scrutiny of claiming and payments for systems intended to serve the interests of current and future claimants.  Indeed, back in 2010, the Obama Administration announced plans to release Medicare data so that private “bounty hunters” could root out fraud, as described in a March 29, 2010 article at FierceHealth IT . More recently, much more Medicare data was released, and the Obama Administration (CMS) June 1, 2015 statement went on at length as to the virtues of  releasing massive amounts of Medicare data for analysis by interested persons. There, CMS explained the following regarding the vast scale and scope of Medicare data disclosures:

“As part of the Administration’s efforts to promote better care, smarter spending, and healthier people, today CMS is posting the third annual release of the Medicare hospital utilization and payment data (both inpatient and outpatient) and the second annual release of the physician and other supplier utilization and payment data. The announcement was made at the annual Health Datapalooza conference in Washington, DC.

“These data releases will give patients, researchers, and providers continued access to information to transform the health care delivery system,” said acting CMS Administrator Andy Slavitt. “It’s important for consumers, their providers, researchers and other stakeholders to understand the delivery of care and spending under the Medicare program.”

The Medicare hospital utilization and payment data consists of information for 2013 about the average amount a hospital bills for services that may be provided in an inpatient stay or outpatient visit. The hospital data includes payment and utilization information for services that may be provided in connection with the 100 most common Medicare inpatient stays and 30 selected outpatient procedures at over 3,000 hospitals in all 50 states and the District of Columbia. The top 100 inpatient stays represented in the hospital inpatient data are associated with approximately $62 billion in Medicare payments and over 7 million hospital discharges.
The Medicare Part B physician, practitioner, and other supplier utilization and payment data consists of information on services and procedures provided to Medicare beneficiaries by physicians and other healthcare professionals. The data also shows payment and submitted charges, or bills, for those services and procedures by provider. It allows for comparisons by physician, specialty, location, types of medical services and procedures delivered, Medicare payment, and submitted charges. The new 2013 dataset has information for over 950,000 distinct health care providers who collectively received $90 billion in Medicare payments. Hospitals, physicians, and other health care providers determine what they will charge for services and procedures provided to patients and these “charges” are the amount the hospital or provider generally bills for the service or procedure, but the amount paid is determined by Medicare’s physician fee schedule or other payment methodologies. CMS protects beneficiaries’ personal information in all its data releases.

“Data transparency facilitates a vibrant health data ecosystem, promotes innovation, and leads to better informed and more engaged health care consumers,” said Niall Brennan, CMS chief data officer and director of the Office of Enterprise and Data Analytics. “CMS will continue to release the hospital and physician data on an annual basis so we can enable smarter decision making about care that is delivered in the health care system.”

The Administration has set measurable goals and a timeline to move Medicare toward paying providers based on the quality, rather than the quantity, of care they give patients. These data releases are part of a wide set of initiatives to achieve better care, smarter spending, and healthier people through our health care system. Open sharing of data securely, timely, and more broadly supports insight and innovation in health care delivery.  

Today’s data release adds to the unprecedented information recently released on Medicare Part D prescription drugs prescribed by physicians and other health care providers.”


Problem: Insurer Discrimination Against Persons with Chronic Diseases

Despite “Obamacare,” persons with chronic diseases continue to face economic discrimination through health insurance plans and/or drug formularies created and/or administered by some (not all) health insurers. Why? Some (not all) health insurers are using illegal and morally improper means to try to avoid significant payments for the drugs, diagnostics and services needed to manage or cure chronic diseases. The problem is large enough and acute enough that it is receiving continued focus from various interest groups, and the subject will  become a more frequent topic on this blog. The topic is especially significant as new health insurance plans for 2015 arrive in the market place on November 15, 2014, with a February 15, 2015 deadline to choose a new plan. This post provides provides a recent example of an insurance company settlement after a complaint was filed regarding its illegal actions, and provides numbers illustrating the financial and human scale of chronic diseases.

An Example  – Cigna’s Recent Settlement of a Complaint Regarding HIV Drugs

Cigna last week capitulated and settled claims asserted in May 2014 regarding illegal discrimination against persons in Florida. The target of discrimination? Persons needing the “cocktail” of drugs needed for HIV. Despite the usual denials of liability or fault, the settlement terms accepted by Cigna include numerous, material going forward changes for Cigna. Although the changes apply only in Florida, they are telling admissions of past illegal discrimination. In short, the charges against Cigna were that it structured its drug benefit plans in Florida to impose high “co-pays” and other charges for insureds seeking HIV medicines.  Cigna also was charged with discouraging use by making doctors and patients jump through pre-approval hoops, as opposed to leaving the medicine decisions to doctors.  The changes extracted in settlement materially reduce or end expenses for insureds, and also end the practice increased the time and effort  required for patients to obtain needed drugs. The overall set of issues is described in a November 7, 2014 press release pasted below, with media coverage in a November 7, 2014 story in the Wall Street Journal.

For Immediate Release
November 7, 2014
Contact: Amina Abbas
+1 252 367 7504
 Florida Insurance Commissioner Reaches Agreementwith Insurer to Protect People with HIV/AIDS 

WASHINGTON–The National Health Law Program (NHeLP) and The AIDS Institute welcomed the Florida Office of Insurance Regulation’s announcement this morning that it has reached a Consent Order with Cigna Health and Life Insurance Company that addresses some of the discriminatory practices identified in their pending federal complaint against Cigna.
“This is a welcomed development,” said Wayne Turner, NHeLP staff attorney. “As we laid out in our federal complaint earlier this year, people living with HIV/AIDS have been experiencing illegal barriers to accessing insurance, including by Cigna. This consent order is a step in the right direction to addressing these barriers.”
“We thank the Florida Insurance Commissioner for taking these first steps to ensure that people living with HIV/AIDS will have greater access to essential medicines in Florida at a more affordable cost,” said Carl Schmid, deputy executive director for The AIDS Institute. “However, much work needs to be done by the insurance companies to address additional barriers to care for people with HIV/AIDS, including inadequate drug formularies, high co-insurance and deductibles.”
The AIDS Institute and NHeLP filed the complaint on May 29, 2014, with the U.S. Department of Health and Human Services Office for Civil Rights, charging four Florida health plans, including Cigna, with unlawful discrimination against people living with HIV and AIDS. The four insurers placed all HIV medications, including generics, on the highest cost-sharing tiers with high levels of co-insurance to discourage people with HIV/AIDS from enrolling, according to the complaint. Such practices are now prohibited under the Affordable Care Act’s non-discrimination provisions, which ban health plans from discriminating against individuals based upon disability and prohibit health plans from discouraging enrollment by people with significant health needs.
While the Consent Order admits no wrongdoing, Cigna has agreed to restructure its HIV prescription drug benefits for the 2015 plan. Among other things, they will limit co-pays to $200 per month for four HIV drugs instead of charging patients 40-50 percent co-insurance for all HIV drugs. Cigna will also place all generic HIV medications into a lower cost “generic” tier, and will eliminate burdensome prior authorization requirements for refills of HIV/AIDS drugs and step therapy requirements for administration of these drugs. The Consent Order requires Cigna to meet with NHeLP, The AIDS Institute and AIDS Healthcare Foundation to address HIV/AIDS drug affordability and access issues more broadly.
“We thank Commissioner Kevin M. McCarty for the steps he has taken to protect patients in Florida”, stated Michael Ruppal, executive director for The AIDS Institute. “The Commissioner’s inclusion of community organizations like ours to meet with Cigna provides additional opportunities to eliminate barriers that restrict access for our patients.”
Today’s Consent Order, which neither NHeLP nor The AIDS Institute were a party to, applies only to Cigna. The order does not address the specific legal claims that are pending in the federal complaint, including claims regarding discriminatory plan benefit designs. In addition, the order does not affect the complaints pending against other Florida insurance companies.
“We will continue working so that all health plans comply with federal non-discrimination laws that prohibit egregious insurance company practices,” added Turner. “It remains the responsibility of federal officials to ensure that these federal protections are properly monitored and fully enforced.”
“In the next week, we will learn how Cigna and other insurers in Florida and across the country will structure their 2015 qualified health plans,” continued Schmid. “We are looking forward to seeing plans that will make health insurance work for people living with HIV/AIDS and others with chronic health conditions.”
For more information, contact: Wayne Turner (NHeLP staff attorney) at
202-289-7661 ext. 307 and Carl Schmid (The AIDS Institute deputy executive director) at 202-669-8267.

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The National Health Law Program protects and advances the health rights of low income and underserved individuals. The oldest non-profit of its kind, NHeLP advocates, educates and litigates at the federal and state levels.

The changes agreed to by Cigna are a useful first step, and arrive just ahead of the debut of new health insurance plans for 2015. Cigna’s new plans – all across the country – no doubt will be scrutinized. Meanwhile,  insurance plan discrimination charges remain pending for CoventryOne, Humana, Inc. and Preferred Medical Plan.

The Scale of Chronic Disease – in Dollars

The following data broadly show the scale of the problem of chronic disease. The data below is taken from the Centers for Disease Control, a US government agency, at the links shown below. The quotes below, however, omit the CDC’s footnotes with citations to supporting studies and data. See the CDC web site for the citations.

The Cost of Chronic Diseases and Health Risk Behaviors

“The majority of US health care and economic costs associated with medical conditions are for the costs of chronic diseases and conditions and associated health risk behaviors.

  • Eighty-four percent of all health care spending in 2006 was for the 50% of the population who have one or more chronic medical conditions.
  • The total costs of heart disease and stroke in 2010 were estimated to be $315.4 billion. Of this amount, $193.4 billion was for direct medical costs, not including costs of nursing home care.
  • Cancer care cost $157 billion in 2010 dollars.
  • The total estimated cost of diagnosed diabetes in 2012 was $245 billion, including $176 billion in direct medical costs and $69 billion in decreased productivity. Decreased productivity includes costs associated with people being absent from work, being less productive while at work, or not being able to work at all because of diabetes.
  • The total cost of arthritis and related conditions was about $128 billion in 2003. Of this amount, nearly $81 billion was for direct medical costs and $47 billion was for indirect costs associated with lost earnings.
  • Medical costs linked to obesity were estimated to be $147 billion in 2008. Annual medical costs for people who are obese were $1,429 higher than those for people of normal weight in 2006.
  • For the years 2009–2012, economic cost due to smoking is estimated to be more than $289 billion a year. This cost includes at least $133 billion in direct medical care for adults and more than $156 billion for lost productivity from premature death estimated from 2005 through 2009.
  • The economic costs of drinking too much alcohol were estimated to be $223.5 billion, or $1.90 a drink, in 2006. Most of these costs were due to binge drinking, and resulted from losses in workplace productivity, health care expenses, and crimes related to excessive drinking. 

The Scale of Chronic Disease – in Human Terms

Chronic Diseases: The Leading Causes of Death and Disability in the United States

“As of 2012, about half of all adults—117 million people—have one or more chronic health conditions. One of four adults has two or more chronic health conditions.
Seven of the top 10 causes of death in 2010 were chronic diseases.

Two of these chronic diseases—heart disease and cancer—together accounted for nearly 48% of all deaths.

Obesity is a serious health concern. During 2009­–2010, more than one-third of adults, or about 78 million people, were obese (defined as body mass index [BMI] ≥30 kg/m2). Nearly one of five youths aged 2–19 years was obese (BMI ≥95th percentile).
Arthritis is the most common cause of disability.Of the 53 million adults with a doctor diagnosis of arthritis, more than 22 million say arthritis causes them to have trouble with their usual activities.

Diabetes is the leading cause of kidney failure, lower limb amputations other than those caused by injury, and new cases of blindness among adults.

The data above are the data shown by the CDC web site on November 9, 2014. The specific numbers, however, are not as important as the broad picture of the vast scale of chronic disease, and the vast amounts of money at stake for drugs, diagnostics and other services for persons facing chronic diseases.

Disclosure of Interests

Transparency and disclosure matter. Readers should note that I invest in biotech stocks, and some of the companies make money selling drugs, diagnostics and/or other services for chronic diseases, such as cancers and hepatitis C. Also note that persons dear to me (and friends of friends) have been struck by cancer, and far too many of them have seen their problems needlessly multiplied by health insurers refusing to pay for needed services, drugs or procedures. Therefore, my pro bono work includes representing persons denied health insurance benefits, and other advocacy efforts for persons during and “after” cancer.