HMO Denies Woman Birth Coverage, Arbitration Denies Her Remedy

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® Patient’s Medical History: Sara Israel was denied benefits for the birth of her son in April 1994, because she was sixty-nine miles from her HMO’s doctors group- even though she delivered at an HMO facility.

According to the fine print in the HMO’s policy, women were prevented from traveling more than thirty miles from their HMO’s doctors group once they are eight months or more pregnant. The fine print was not in the "pregnancy" section of the coverage contract, but in the "emergency" section. In fact, Sara did not know of the provision until after the birth when the HMO denied payment of her $5,000 hospital bill.

Sara explains, "I was sure the HMO would come through for me. I felt that I had delivered at a facility that took [the HMO’s patients] and I had contacted my home clinic within forty-eight hours and, as soon as I got the letter denying this payment of bills I made a call to customer relations. She assured me that they would pay. It was an emergency. I could not make it back to the regular hospital."

But, Sara says, "Even though I appealed it and had gone through all their steps, the HMO still denied the bills twice. I spent my entire summer trying to get it cleared. I got bills. I had to tell the hospital they would get paid. I continued to get my bills. Day after day I would be making calls. I would tell the story over again. I put it in a letter. It was just the same letter of denial again and again. It was just a very cold letter. After all I had tried to do to take care of it, it was the same letter back to me. I knew I was being treated unjustly."

RIVERSIDE, CA- When Sara finally went to see an attorney to help recover the costs of the emergency birth, she found out that she could not take her HMO to court, because her HMO contract forced her into binding arbitration.

Once again, Sara would be haunted by the small print in her enrollment coverage contract with the HMO.

"I hadn’t paid attention to that fine print either," says Sara. "You don’t know these things until you are in the middle of these things."

"They say arbitration is quick, but it took a long time. It took from February of 1995 to December 1996 until a decision was made. It was long and drawn out. I was given the impression the process would be quick," states Sara.

While Sara ultimately forced the HMO to pay her bills, she asked the arbitrator for damages to cover her time, energy and to hold the HMO accountable. She waited a year before losing her claims.

— Sara Israel reports her own story.

FTCR will continue to fax daily a story of HMO Arbitration Abuse to educate the public on the need for reform. AB 1751 (Kuehl) makes HMO binding arbitration voluntary rather than mandatory.

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