Monday, June 4, 2012

The madness of self-funded health plans

Do you have a ‘self-funded’ health plan? You need to know that a self-funded plan is a law unto itself which provides significantly less protection than a normal plan. In my case my ex-employer Ana-data signed up for a health plan using Aetna Signature Administrators and administered by Starmark/ Trustmark which provided a miserable level of service and left me with a large maternity bill. This even though I'm no slouch at navigating the health care system here, having done all of this before with the birth of my first son with an Oxford HSA which all went smoothly.
There are a few major flaws with a self-funded plan which you need to be aware of;
·         Self-funded plans are not covered by state laws which apply to traditional medical insurance plans. This means that you could be denied benefits that your state has otherwise mandated. In my case this meant that Aetna failed to pay my midwife at the in-network rate even though they could offer no in-network midwife themselves who could provide homebirth service.
·         Since these plans are governed only by ERISA law, if you are denied a claim you can only sue for the outstanding amount. No punitive damages and generally no lawyer fees. Obviously this is unlikely to be an option for you unless your medical bills significantly outweigh the court fees you are going to incur!
·         Who’s making the decisions on your claim? An important question and one which I could never get to the bottom of, the responsibility just gets passed around and around. Did Starmark reject the in-network exception? Did Aetna Signature Administrators reject the in-network exception? Was my employer involved in the adjudication at any point? Why can I not talk to anyone about the fact that Aetna do not have any homebirth midwife’s in-network?

I spoke endlessly to Starmark, following all due processes (such as requesting an in-network exception months before birth). I also had our Insurance broker talk with them and I had the midwife talk directly to them. Still when it came around to claim settlement, Starmark failed to pay out at the in-network rate and subsequently lied about our previous correspondence stating for instance that I hadn’t submitted my in-network exception with the claim (we had).
Here's the full breakdown, but in summary - just don’t believe what Starmark tells you;
  • 2010/12 - Starmark states to Insurance broker that "midwives" & "Home births" are a covered benefit
  • 2010/12 - Starmark confirms with Midwife's office that "a home birth with a midwife is a covered benefit" and that an in-network exception can be requested based on the Insurance plans lack of providers for this service
  • 2011/02 - In-network exception pre-certification letter is sent in
  • 2011/02 - Starmark defers pre-certification to when the claim is submitted and requests that a letter requesting the in-network exception be attached to the claim
  • 2011/08 - Claim is sent in to Starmark with the appropriate 'in-network' exception request attached
  • 2011/08 - Claim is paid at the "out-of-network level" with no correspondance provided to address the "in-network" request
  • 2011/09 - Trustmark states (incorrectly) that the provider did not submit the "in-network exception" to the appropriate party and that we must open up an appeal to process an "in-network" claim.
  • 2011/09 - First Appeal letter is mailed in
  • 2011/10 - Appeal is rejected because midwives are available in-network, no mention of the fact that none of them provide a homebirth service
  • 2011/10 - Policy holder contacts Starmark by phone to discuss and is told to submit 2nd appeal
  • 2011/11 - Second Appeals letter is mailed in
  • 2011/12 - Second Appeal is rejected as before
  • 2012/01 - Having escalated back to the Insurance broker, Starmark refer to a telephone conversation with the policy holder prior to delivery which never happened.
  • 2012/xx - Numerous telephone conversations with Starmark to try and get some answers before finally the 3rd rejection letter is sent out stating that ERISA law must now be used to take the matter further.

If you’re still fighting for your health insurance rights with Starmark, Trustmark, Aetna Signature Administrators or indeed your employer good luck to you and you may find these additional links helpful;
Excerpt 8: Self-Funded Plans > A Battle on Two Fronts (Copyright 2010, The Carcinoid Cancer Foundation and Laurie Todd)