Insurance Lawyer Blog

The California Office of the Patient Advocate, created to inform and educate Californians on their HMOs and health insurance providers, released an annual Health Care Quality Report Card (http://www.opa.ca.gov/report_card/) this week detailing the scores for California’s nine largest health management organizations, six largest preferred provider organizations, and 212 medical groups representing 16 million consumers with private health plans. In general, it seemed California consumers were satisfied, but the report highlighted the need to improve treatment for lung disease, attention-deficit disorder, and throat infections in children. Additionally, more than a third of health insurance consumers stated they had problems with how the insurance organizations dealt with complaints.

This year’s report card also stated that the California providers exceeded the national average in terms of diabetes care and controlling high blood pressure and cholesterol, but scored lower on heart attack medications, flu shots for adults, and providing treatment for alcohol and drug abuse. Insurance consumers also complained about the difficulty getting cost estimates for medical procedures and figuring how much their insurance will pay for, as well as paying for the claims correctly.

Each plan is ranked in categories of care between one and four stars, depending on meeting national standards and membership ratings on things like getting appointments and customer service. The only HMO to receive an overall four start rating was Kaiser Permanente, but even they had troubled areas. Kaiser only received two stars for ease of making appointments and treatments, especially with specialists. And in northern California, it only received one star for plan service, which includes processing of claims. Overall, fourteen of the fifteen health plans rated scored only a one or two star rating out of four stars in customer service, which includes questions about costs and claims. Among the preferred provider organizations (PPOs), none of the six received the highest four star rating. Only three, Aetna, Cigna, and UnitedHealth were ranked as three stars, or good.

The annual report card is now in its eleventh year and this edition covers data and information collected from the year 2010. The director of the Office of the Patient Advocate, Sandra Perez, stated at a press conference that the public report card is to keep insurance providers accountable and to encourage quality improvements in health insurance policies. She also said they will continue to go forward with health care reform in California—more focus will be on the quality and value of health care. Californians can research medical groups by either name or county. As San Francisco insurance claim attorneys, we encourage our clients and insurance consumers to check out the report card to assist in comparing and contrasting different insurance providers and plans to make the best choice possible. These public reports are one way to keep insurance providers honest, and are a valuable tool in California, but if you are having serious problems with your insurance provider not providing the services or care required in our area, it is still advisable to discuss the problem with a San Francisco insurance lawyer.

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Health Insurance Still a Worry in California

(Photo Courtesy of Dave Dugdale)

Our San Francisco insurance attorneys are always interested in developments in insurance laws around the country and in particular as they affect California. This week California Congressman John Garamendi introduced H.R. 4020 into the House of Representatives, called the Flood Insurance Farmers Act of 2012. The bill addresses the cost of insurance for farmers who grow crops and livestock on floodplains.

Many existing levees that protect agricultural land have recently been downgraded by a study of the Army Corps of Engineers and the Federal Emergency Management Agency (FEMA). Large amounts of US farmland are being designated as flood areas if the levees in those areas are not found to give 100 year protection. This would require property owners in these areas to purchase flood insurance, pay higher rates, and all new construction or improvements would have to meet stricter building requirements. In many of these areas, flood insurance is not available and farmers would not be able to improve or build new agricultural structures necessary to support or grow their business.

FEMA determined that California is the first state to have its floodplains and levees studied and mapped. Some affected California farmers are saying these restrictions on floodplains could make now productive agricultural communities disappear. The first new designations and maps released by FEMA put almost all of Sutter County in a “Special Flood Hazard Area.” Rural residents there say the level of flood insurance and certification required now is cost prohibitive and unattainable for most farmers. It could shut them down. They will be prohibited from making improvements worth more than 50 percent of the structure’s value. And anyone with a federally backed mortgage will automatically be required to purchase flood insurance, which will increase insurance costs for that property by four to six percent.

The bill introduced by Congressman Garamendi, who was California’s Insurance Commissioner from 1991 to 1995 and is also a lifelong rancher, proposes insurance subsidies for farmers in these areas, a study of the costs of insurance in these areas, (particularly in California where large premiums are required but little is paid out in return) and a provision to make sure flood insurance is available to property owners in these areas.

Congressman Garamendi notes that Californian farmers are particularly affected by the recent downgrades. He states that it has placed huge portions of California’s agricultural land at a disadvantage. The Congressman also notes that many of the levees in question have never been breached, and some have been in place for more than 100 years. He also notes that California is a net donor to the rest of the nation on flood insurance, because Californians have received only a 20 percent payoff from the floods that have occurred in California.

The Flood Insurance Farmers Act seems to have fairly wide bi-partisan support in the House, but it still has to go through the process and determinations must be made about the cost of the insurance and actuarial implications. Our California insurance lawyer knows this is a serious concern for many rural Californians, and we will be watching to see how the bill progresses.

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A story caught our eye this week that is the definition of shameful. Imagine our seniors, our parents and grandparents, being scammed out of benefits from long-term care insurance. Taking money from the elderly and infirm and denying them when they need the help they diligently paid for over the years. As San Francisco insurance attorneys we saw that Consumer Watchdog filed a class action lawsuit with the San Bernardino Superior Court earlier this week against the Senior Health Insurance Company of Pennsylvania (SHIP) including these allegations.

Long-term insurance claims typically involve in-home care services, mostly for caregivers that help elderly or infirm policyholders with tasks like bathing, dressing, eating, and chores around the house. The lawsuit alleges that SHIP told policyholders that in-home caregivers must be licensed, when that is not the case. SHIP also allegedly forced policyholders to produce extensive documentation and to undergo unnecessary medical exams by SHIP employed doctors. The documentation requirements were often absurd—requiring multiple forms with the same information, medical records, proof of caregiver certification, and detailed caregiver notes. The founder of Consumer Watchdog, Harvey Rosenfield, said that SHIP takes the senior’s premiums, but when a claim comes in, they inundate the policyholder with confusing correspondence, fake requirements, and endless demands for irrelevant information.

The lawsuit is on behalf of Dr. William Hall and other elderly victims of this bad faith insurance abuse. Dr. Hall is an 87 year old California resident and former US Army colonel—a wounded veteran from the Korean War. He is also the former Chief of Medicine at a California hospital. His son Eric said that Dr. Hall bought the SHIP long-term care policy to spare his family the expense of this type of care. Eric Hall says that because of SHIP the family has spent more money and more time on Dr. Hall’s care than if he had never bought the policy. Dr. Hall bought his long-term care policy in 1994 and paid premiums for sixteen years. When he needed care, SHIP delayed his benefits for eight months and then only provided him with 20 percent of the benefits to which he was entitled. Because of that, he has spent tens of thousands of dollars for caregivers, exhausting his personal resources. Dr. Hall has had to turn to his children for care, which is exactly what he was trying avoid when he purchased the insurance policy in ’94.

The suit asks for these bad practices to stop—the inundated correspondence, requests for unnecessary documentation and medical records, lengthy delays when responding to claims. The suit also requests that the company make the process more transparent and clear for policyholders to understand what their policy covers. It also seeks that policyholders be able to use their own doctor to determine their eligibility for benefits. Dr. Hall personally is also seeking damages for breach of contract, elder abuse and fraudulent business practices.

Our San Francisco bad faith insurance lawyers understand the plight of these affected California seniors. It is truly horrible that SHIP has treated their vulnerable customers in such a manner, especially when they are already frail and in need of care. An insurance lawsuit is often the only way to really make a big insurance company take notice and change its policies, as well as an opportunity for wronged consumers to get the money they deserve.

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Blue Shield Settles Rescission Lawsuit

This week California joined six other states—Florida, Illinois, New Hampshire, North Dakota, Pennsylvania, and New Jersey—in signing a settlement with Prudential Insurance Co. of America, the country’s second largest life insurer. The settlement requires that the insurance company use enhanced researched techniques to find the beneficiaries of California life insurance policies where the dead policyholder’s benefits were never claimed. California Insurance Commissioner Dave Jones said that this is to ensure that when a life insurance holder dies, the intended beneficiaries get the owed benefits. A Prudential spokesperson asserted Prudential was not accused of any wrongdoing and that Prudential is happy to work with industry regulators on best practices and standards and is pleased to get out in front of the industry on this issue.

The agreement includes an expanded use of matching criteria when Prudential uses Social Security’s master list of deceased people (the so-called “Death Master” file) and the use of computer programs to find deaths that might have been overlooked in the past. This will help Prudential discover in a more timely fashion when a policyholder has died and ensure that policies do not go unpaid for years. If a Prudential policyholder dies, the agreement requires the company to conduct a thorough search for beneficiaries, using both their records and online search and locator tools. If no beneficiary can be located, Prudential is to turn over the proceeds from the policy to the state as required under California’s unclaimed property laws. Additionally, the settlement includes a $17 million payout by Prudential, which will be used to monitor compliance. California’s share has not been determined yet, but it is expected to exceed $1 million.

There is also a parallel agreement that Prudential reached with twenty states last month, with the company agreeing to review policies active between 1992 and 2010 and pay the beneficiaries it locates. Prudential told the Securities and Exchange Commission in a filing that it put aside $139 million for this task.

This most recent agreement requires twenty states to sign on before it becomes official, so thirteen more states need to sign on. The deadline is March 31, 2012 for the state to be eligible to receive part of the $17 million payout. Prudential is the first of half a dozen insurance companies that these seven states, including California, are targeting. Mr. Jones said he hopes that this Prudential settlement will pave the way for more productive negotiations and settlements with the other involved insurance companies.

Our San Francisco insurance claim lawyer knows that these targeted companies and negotiations stem from a three year audit by California State Controller John Chiang of life insurance companies. This turned up enough information to hold an investigative hearing last May on alleged delayed payouts of benefits by MetLife Inc.

San Francisco insurance attorneys realize that failure to search for beneficiaries has been a pervasive life insurance industry practice. After a loved one dies, there are often questions about whether the person had life insurance and how to deal with that. If you need legal help with that issue, there are experienced insurance lawyers in your area to help.

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$54 million Recovered for California Insurance Consumers in 2011

Good news for California Life and Disability Insurance Consumers