Aetna to Allow Independent Doctor Panel to Review Rescission Decisions

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HARTFORD, CT — Aetna Inc. is allowing an independent panel of physicians to review its decisions when it rescinds members’ policies under an initiative that applies to its individual health insurance plans.

The health insurer said medical professionals from MCMC LLC will conduct the independent, external reviews. Members who have had their policies rescinded will be able to obtain the reviews at no cost and the panel’s decision will be binding on Aetna.

The company said most of the policies it cancels are due to insurance fraud, in which someone obtains a policy under false pretense, makes an initial premium payment, immediately receives a medical procedure and then allows the policy to lapse. Its rescission rate is low, at less than 0.03% of all individual policies issued, Aetna said.  

In a statement, Consumer Watchdog said Aetna’s announcement "does not sufficiently protect current and future policyholders" because it doesn’t clarify the legal standard for rescissions — intentional misrepresentation, which is provided in Assembly Bill 1945 authored by Democratic California Assemblyman Hector De La Torre.

"Aetna has not said that it can rescind a patient only if the patient intentionally misrepresented a past health condition," said Jerry Flanagan, of Consumer Watchdog, in a statement. "Independent review of an insurer’s decision to cancel care will not help patients if the rule the reviewers follow is that innocent patients can be canceled."

Mohit Ghose, a spokesman for Aetna, said the company’s initiative represents a national policy change on a voluntary basis.

Regardless of where policyholders live, if they have an individual policy with Aetna or if they’re considering an individual market policy with Aetna, they will have access to an independent external review, Ghose said.

California recently put a spotlight on the alleged improper rescission practices of health insurers and a committee of the National Association of Insurance Commissioners wants to determine if the practice extends beyond the Golden State (BestWire, Sept. 15, 2008).

Problems stemmed from the practice of post-claims underwriting, where a health insurer illegally cancels coverage after a policyholder submits a medical claim, usually a costly one (BestWire, Feb. 8, 2007).

Under Aetna’s program, which took effect Sept. 22, MCMC will arrange for a panel of three medical professionals based on the needs of a particular case, Aetna said. The reviewers will re-examine all information used by Aetna in its decision process.

When the review is completed, the panel will provide a report to the member with a copy to Aetna. There won’t be any contact between Aetna and the reviewers or with MCMC until the report has been mailed to the member, Aetna said.

"At Aetna, we believe that the rescission process is a critical part of our efforts to combat fraud and misrepresentation to help keep costs more affordable for our customers," said Ronald A. Williams, chairman and chief executive officer of Aetna, in a statement.

Since  2005, the California Department of Managed Health Care, the state’s HMO regulator, has been investigating several health insurers that sell individual policies allegedly with the intent of engaging in "post-claims underwriting," or rescinding policies without proving that applicants misrepresented their status on an application.

In recent months, Anthem Blue Cross, along with Blue Shield of California, agreed to pay a combined $13 million to $15 million in fines and offer new coverage to consumers whose policies were canceled, under two separate agreements with the DMHC. The DMHC also reached agreements with Kaiser Permanente, Health Net and PacifiCare of California (BestWire, July 18, 2008).

Earlier this month, Health Net Life Insurance Co. reached a $25 million settlement with the California Department of Insurance resolving allegations it improperly rescinded coverage to 926 people in its individual and family plans during the past four years (BestWire, Sept. 12, 2008).

Contact the author, Fran Matso Lysiak, senior associate editor, at: [email protected]

Consumer Watchdog
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