Injuryboard Commentary - insurance companies

Heath Insurance Coverage Shouldn't Be A Deterrent To Rape Reports

Mike Bryant — Sun, 06 Dec 2009 19:51:00 GMT

Interesting series in the Huffington Post last week, which looked into the issue of what happens to women who make certain kinds of medical claims. Spotlighted were the cases of women who, after being raped, needed to go through courses of HIV protection measures or who needed post-traumatic care.

Imagine even having to consider whether to report the brutality of being raped because you might later be denied for a preexisting condition. This is just an almost unthinkable deterrent.

It is the quandary that so many insurance companies profit from. The reason for the ongoing fairy tail that there is a litigation explosion out there. They profit from getting as many people as possible to buy more and more coverage. You never know when you will be sued, get sick, suffer a loss. Alternatively, they scare the heck out of people from ever using their coverage. Rates will go up, I will be denied, and I won't be able to get future care.

Just another reason why the health care debate needs to be about the consumer. That real issues , involving real people have to be at the center of any debate. This is not a time for profits over people. It is also most likely the reason why, just like in auto claims, the insurance companies have gone to the old Delay, Deny, and Defend policy.

Originally posted at InjuryBoard by Mike Bryant

Won Your Workers Compensation Case? Not so Fast

Jon Lewis — Tue, 24 Nov 2009 13:02:11 GMT

What are the insurance companies doing now? They are using "Utilization Review" in order to cut off workers compensation benefits. How does that work?

Well, the Alabama Workers Compensation Act allows for "Utilization Review". That means that the workers compensation insurance carrier can submit your medical records to a third party physician to review and determine if they are related to the injury. If that third party physician says, "No", the workers compensation carrier cuts off the injured employee's benefits.

How does this work in practice? Take my client for example. She had surgery approximately ten (10) years ago. Her workers compensation case was settled, and her medical was left open for future treatment. Typically, that is what happens in workers compensation cases. The person receives medical treatment for the related injuries for the rest of her life.

For ten (10) years, my client has been receiving prescriptions and medical treatment for her injuries. Out of the blue, the insurance carrier sends her records to a foreign doctor in El Paso, Texas who opines that her injuries and medical treatment are not related. So, the insurance carrier, under the "utilization review" provision, cuts off her medical treatment.

Why did they wait ten (10) years? How can this doctor supersede my client's local doctor's opinion when he hasn't even examined her. Shouldn't the "Authorized treating" physician have the final say? The insurance carrier approved her "Authorized Treating" Physician.

This is ridiculous and unfair, but that is how the insurance industry works. Insurance covers everything but the loss. All they want is their money and to hell with everything else - morals, humanity, sympathy, kindness, and generosity. It is all about the bottom line. People talk about "greedy trial attorneys" when they should be talking about "greedy insurance companies".

Originally posted at InjuryBoard by Jon Lewis

Tort Reform, Lies, and Lady Justice

John Hopkins — Thu, 05 Nov 2009 16:37:17 GMT

It is all about reforming our tort system, right? I mean fixing the health insurance problem for millions of uninsured people is all about preventing the filing of lawsuits against negligent doctors and hospitals, right? We need to limit or eliminate the constitutional right to jury try for a certain class of citizen to provide health insurance for our citizens, right? We need to provide special immunities to certain professionals to fix the health insurance problem?

Who has a “problem” that any of this fixes? One class of “people” has a problem that this will fix: insurance companies. The insurance industry wants tort reform so the insurance industry can increase profits. It is, in fact, that simple.

No one has ever been able to provide me with objective evidence that contradicts any of the following:

There are not an abundance of frivolous malpractice suits being filed now and there has not been in recent memory.
Malpractice claims do not, watch my lips, do not drive up insurance costs. In fact, under oath, many insurance executives have repeatedly testified as such.
Doctors are not fleeing states because of malpractice claims. In fact it is the very, very small minority of doctors who are sued for malpractice.
Malpractice claims do not drive up insurance premiums across the whole population of physicians. Empirical evidence demonstrates that little correlation exists between malpractice claims and increased premiums. Insurance executives have, under oath, also testified to that fact.
Tort reform will never lower insurance costs. The insurance industry simply does not have a track record for doing that.

All of this is a distraction from accomplishing a solution to the real problem. How do we provide health insurance to millions of citizens who are without it? Legislators indebted to the insurance industry need to throw up road blocks and provide distraction they can trump up to be popular with many people in this country.

When 98,000 people die every year and many more are injured from medical malpractice. I must wonder if the tort reformers would be making statements they know are not true if medical negligence killed their wife, their husband, their mother, or their child. Of course they would not. In the height of absolute indifference to the suffering of victims, tort reformers fabricate, invent, and misrepresent; all to benefit an industry who is dumping big dollars into their pockets.

So, if they are successful with roadblocks and propaganda campaigns, the victim will include justice herself.

Originally posted at InjuryBoard by John Hopkins

AAJ Debunks Myths About Medical Negligence

David Mittleman — Thu, 05 Nov 2009 12:46:56 GMT

President Obama promised a floor debate on health care reform in the House, and now that promise is coming to fruition. The debate is sure to include the classic opponents of healthcare reform, including the U.S. Chamber of Commerce, as well as other tort reform proponents such as the asbestos, insurance, and pharmaceutical companies. However, one of the most problematic arguments used by these groups is that medical malpractice lawsuits are the basis for the rising cost of healthcare and that the answer is not healthcare reform. Instead, they argue that limiting “frivolous lawsuits” is the panacea to our country’s healthcare cost woes.

The American Association for Justice (AAJ), a trial lawyers group based Washington, D.C, recently released a 30-page report (pdf) outlining the pertinent arguments of the debate. Specifically, the five myths the AAJ outlines are:

Myth #1: There are too many frivolous lawsuits, and curbing the number of lawsuits would cut down the cost of healthcare.

The actual number of lawsuits filed per year is questionable. What most people don’t understand is that trial lawyers don’t have near the financial power that an insurance company does. Specifically, insurance companies can spend enormous, and seemingly endless, amounts of money to win a case. Plaintiffs’ attorneys, on the other hand, are on very tight budgets and must question the validity of every case that might come their way. Wasting money attempting to prove a case that doesn’t have merit is nonsensical, so plaintiffs’ attorneys aren’t scooping up every case possible, contrary to popular belief.

While the number of frivolous lawsuits is questionable, the number of medical negligence cases aren’t: in fact, according to the Institute of Medicine’s 1999 “To Err is Human” report, 98,000 people are killed in hospitals each year from preventable medical errors.

Furthermore, a Hearts Newspaper Group “Dead by Mistake” investigation into medical malpractice found that the number of patients affected was closer to 200,000, when hospital-acquired infections were taken into consideration.

Are all of these individuals affected by medical negligence flocking to file lawsuits? Apparently not: according to a Harvard study, only 1 in 8 people injured by medical negligence filed a malpractice claim.

Other myths included in the AAJ report include:

Myth #2:

Malpractice claims drive up the cost of healthcare

Myth #3:

Doctors are fleeing

Myth #4:

Malpractice Claims Drive up Doctors’ Premiums

Myth #5:

Tort reform will lower insurance rates

For additional information on the myths surrounding healthcare reform and the costs of healthcare, see AAJ's "Debunking the Myths".

Originally posted at InjuryBoard by David Mittleman

Medical Malpractice Insurers’ Profits Higher than 99% of All Fortune 500 Companies

Beth Janicek — Sat, 31 Oct 2009 17:58:31 GMT

The American Association for Justice (AAJ) recently released a statistic claiming that medical malpractice insurance companies’ average profits are higher than 99 percent of all Fortune 500 companies. AAJ points out that medical malpractice lawsuits only account for a small percentage of unnecessary costs. The bigger problem is medical errors and the profits of malpractice insurers.

The report released by the AAJ also states that the average profit of medical malpractice insurance companies is 35 time higher than the Fortune 500 average for the same time period, and that malpractice insurers have seen their profit margins range from 5.9 percent to 74.8 percent, with an average of 31.2 percent. In addition, the report finds that malpractice insurers have publicly overestimated their losses and underestimated their profits in an attempt to suggest that insurance business and medical practices face a crisis that must be resolved by tort reform. This report released by the AAJ shows that insurance companies profit the most, and obviously need Tort Reform the least.

AAJ President Anthony Tarricone said,

Insurance companies are gouging doctors on their premiums to mislead lawmakers…And today, injured patients are often left with no avenue to pursue justice, while health care costs continue to skyrocket.”

Originally posted at InjuryBoard by Beth Janicek

Do We Already Have Death Panels?

Mike Bryant — Thu, 22 Oct 2009 09:12:00 GMT

There was a spat of complaints that were being thrown out there that the new Health Insurance legislation included death panels. It seems that anyone who can read has been able to find that the basic claim is untrue and that any broader reading only allows for doctors and patents to consult and make decisions together outside insurance companies.

But what do we have right now? The New York Times recently looked at the issue and found some scary things. They covered the story of Eric De La Cruz, of Las Vegas, who was diagnosed with dilated cardiomyopathy. He couldn't find coverage because of a pre-existing condition. instead he had to post a deposit of at least $150,000 to be evaluated and placed on a heart transplant waiting list. The cost of all of his care was nearly $1 million dollars for a transplant and subsequent hospital care. His sister, Veronica De La Cruz, through a public campaign raised nearly $1 million in less than two weeks. He was able to enter the University of Southern California health system and was placed on the 'high-priority transplant list. But, as his sister pointed out after the " all the delays and denials", too much time had passed and he became too sick for the procedure" and died on July 4.

Just one story, but an example of the system that we have right now. A system that denies coverage and delays claim after claim. Now , I would agree that there isn't a panel in hangman masks making the decision, but the reality is that there should be outrage with what people are not getting right now.

Originally posted at InjuryBoard by Mike Bryant

Alabama Workers Compensation - Disadvantaged Employees

Jon Lewis — Wed, 30 Sep 2009 13:28:21 GMT

We are in the process of representing an individual who was seriously injured on the job. He has had two back surgeries, and he is 72 years of age. He has been deemed 100% disabled, and we are trying to resolve his case. There is no question about whether or not his employer is responsible for compensating him under the Alabama Workers Compensation Act, so what is the issue?

Well, in Alabama, the employer (really, the employer's insurance company) can try to settle the case or force you to go to court to prove your case. If the insurance company settles your case, they typically pay the settlement in a lump sum amount. If you try the case to a verdict and win, the insurance company can choose to pay the employee weekly or in a lump sum. Usually, they will choose the weekly option because they will benefit if the employee dies before the payout is complete.

What about our situation? What would our client be entitled to in a lump sum? Approximately $170,000.00. What has the insurance company offered? $85,000.00. Why? Money. It is all about the bottom line for the insurance company, and they understand that we, as the employee's attorney, have no leverage to force them to do otherwise.

Why would our client accept a lump sum for less than $170,000? Several reasons. First, he can get a lump sum and know what he has. Second, if he were to die, he knows that his wife will receive something; whereas, if he died during the weekly payments, the payments stop immediately. Third, he doesn't have to try his case to a judge (you cannot get a jury in a workers comp case) and risk the judge thinking he's less than 100% disabled which would dramatically reduce his compensation. Finally, he can incorporate language for Social Security Disability which minimizes the effect on any set off Social Security would get if he received weekly payments.

Why wouldn't the insurance company pay the full value of the lump sum? They have no incentive. They have nothing to lose. If they don't pay it, what happens? They hire an attorney to defend the case. If the attorney wins or gets less than 100% disability, they don't have to pay as much. If they lose the case, they only have to pay the weekly benefits, and if our client were to die, they win. The only way the insurance company loses is if our client lives beyond his life expectancy, and the insurance company has to keep paying his weekly benefits. That is how the insurance company evaluates the claim: what is the likelihood that our client will live beyond his life expectancy. In their mind, our client is just another number, not a human being who is going to have a difficult time supporting his family because of his injury.

There should be some consequence to the insurance company and employer if they force the employee to try the case to a verdict, and the employee wins - at least in a 100% disability case. These types of cases are serious, and the individuals who have been injured have very little recourse and will have a difficult time the rest of their lives. This is their only chance at compensation, and the insurance companies hold their feet to the fire. It is time the employees could fight back and not be forced into settlement situations.

What do you think?

Originally posted at InjuryBoard by Jon Lewis

Georgia Supreme Court Considers Whether "Tort Reform" Equals Crooked Justice

David Mittleman — Wed, 16 Sep 2009 16:04:16 GMT

The Georgia Supreme Court heard oral arguments on a case that could invalidate the insurance industry's attempts to provide immunity to the most negligent doctors and deny recovery to the most devastatingly injured patients.

When 75-year-old Betty Nestlehutt's skin on her face started to die after her plastic surgeon cut off blood flow to her face, the gaping wounds from her temple to her chin paled in comparison to the permanent scarring endured in her heart. Surely, a jury would do their very best to fully compensate her for her pain and suffering.

A Fulton County jury did, in fact, award her a substantial $1.15 Million verdict for non-economic damages (including $900,000 for her own pain and suffering) along with $115,000 for past and future medical expenses. This was precisely the type of result that juries spend hours deliberating, missing days of work, hearing evidence, determining the facts of the case. Little did they know that their decision would be undercut by Georgia's "Tort Reform" law.

Under Georgia's law, which mirrors the laws in many other states and which Republicans in Congress are all too ready to impose nationally, the role of the jury is unilaterally undermined because no matter what their findings are for noneconomic pain and suffering, Georgia had a maximum damages cap of $350,000 ($550,000 less than what this jury thought Ms. Nestlehutt merited).

Courts all over the country are handcuffed by the laws, which often conflict with Constitutional protections for the right to jury trials. Lawyers are challenging a similar law in Indiana where the cap is higher than in Georgia.

Ultimately, these "tort reform" caps are really nothing more than Crooked Justice for insurance companies and negligent doctors. As the lawyers for Ms. Nestlehutt argued, the most injured patients are blocked from gaining their full compensation, and the most egregiously negligent doctors will never have to full pay for their negligence. In a country that values the right to a trial by jury, we should not let insurance lobbyists devalue that time honored and cherished tradition.

Originally posted at InjuryBoard by David Mittleman

Medical malpractice reform debated.

Wayne Parsons — Tue, 25 Aug 2009 03:32:00 GMT

The Buffalo News (8/22, Zremskie) reported, "Dr. Richard Vienne of Amherst (NY) and many of his colleagues nationwide say there's one thing missing from the great debate over health care reform: any effort to ease the minds of doctors so they wouldn't keep wasting money on tests out of the fear of getting sued." In the 1,000 pages "of H.R. 3200, the main version of the health reform bill, medical malpractice reform remains the Great Unmentioned. That fact has repelled Republicans and others who maintain that reform will be incomplete and way too expensive without a cap on jury awards in malpractice cases." But "Democrats and academic experts counter with strong evidence indicating that malpractice reform would not save any money, and with the argument that curbing lawsuit awards would be deeply unjust to those injured by their doctors."

Democrats' stance on tort reform said to result in campaign contributions. US News Weekly (8/21, Garber) reports, "Healthcare town hall protesters bring it up constantly. So do many doctors. Democrats, for the most part, refuse to go near it. The issue is the cost of 'defensive medicine' -- basically, doctors ordering extra (and arguably unnecessary) tests to protect themselves from costly lawsuits." US News adds that "supporters say limits on big payouts would ease doctors' worries about costly lawsuits and curb unnecessary tests," but tort reform "is viciously partisan and heavily lobbied." Plaintiffs' lawyers have "generously given to Democratic campaigns, including President Obama's."

Law profs. propose solution. In an op-ed in the Washington Times (8/23), David A. Hyman of the University of Illinois and Charles Silver of the University of Texas at Austin wrote, "A more fundamental problem is that damages caps don't do much to improve the quality of care that is being delivered. There is plenty of evidence that the quality of American health care isn't what it should be - but providers receive the benefits of a damages cap whether they have made great effort or no effort to improve the quality of services they are providing. If we want to actually improve the quality of American health care and help ensure that we obtain value for the roughly $2.5 trillion per year we are spending, we should take five concrete steps." The authors advocate increasing noneconomic damages in cases where insurers have not reported errors "in a timely manner," but "that physicians who practice high-quality, cost-effective medicine are not subjected to the tender mercies of the tort system."

WTimes: Reform necessary. The Washington Times (8/23) editorialized, "Plaintiffs' attorneys better watch out." Bob Beckel, "uber-Democrat and manager of Walter Mondale's 1984 presidential campaign" and Sarah Palin both agree that medical malpractice awards should be capped. Palin also "recommended limiting lawyer contingency fees, adopting a 'loser pays' rule for attorneys' fees and requiring higher standards for 'expert' medical testimony in court cases." The Times argues, "All of these reforms, and more, would help keep medical costs lower while improving fairness and service delivery to patients. If doctors, insurance companies, drug companies, small businesses and individuals who choose not to buy insurance all must contribute something to the cause of health care reform, so too should the lawyers who make out like bandits under today's system."

Originally posted at InjuryBoard by Wayne Parsons

Insurance Industry Claims Low Profits, High Expenditures on Medical Care

David Mittleman — Sat, 08 Aug 2009 10:00:00 GMT

America’s Health Insurance Plans (AHIP), the lobbying arm of the insurance industry, claims that “for every dollar spent on health care in America, approximately 1 penny goes to health plans’ profits.” Moreover, the group’s health care reform website alleges that only one one-hundredth of the premium dollar is revenue for the insurance provider, with the going towards providing medical care for insurance holders.

AHIP numbers seem to indicate that insurance companies are making very little in profits and spending a lot on providing coverage for their customers. However, the data fails to clearly explain that insurers are measuring their profits against total health care spending in the U.S., not in comparison to insurance company revenue. In other words, according to health care economist Uwe Reinhardt: “[a]ll that statement says is, if you eliminated all our [insurance company profits], national health spending in America would be 1 percent lower.” AHIP numbers only have meaning within that context—otherwise, within the context of actual insurance companies’ revenues, insurers skim between 15-20% of premium dollars to pay for administrative costs and profits. Moreover, even more alarming is the fact that within the last 10 years, insurers have been spending less (from plan premiums that their customers pay) on medical care and more on administrative costs and profits. Indeed, a report by Families USA found that some insurers maintain a ratio of 60% on medical payouts to 40% for administration, marketing and profit. You may think there is nothing wrong with that payout to profit ratio. However, that figure represents a two to ten percent difference from what AHIP claims insurance companies make in profits.

If the above data is not enough to convince you that health insurance companies are not looking out for the average consumer, here are a few additional facts that demonstrate that the insurance industry is more interested in profits than anything else:

The top five earning insurance companies averaged profits of $1.56 billion in 2008, with more than 18% of those earnings going towards revenue, administration and profits. Furthermore, CEO compensation for those same companies ranged from $3 million to $24 million. That’s actually a decrease in CEO compensation from previous years—a survey by Modern Healthcare failed to find one healthcare CEO who earned more than $15 million last year. But don’t get too disappointed for the CEOs lowered earnings just yet—the performance of the stock market in 2008 was a major factor for the decrease in compensation, not because they aren’t still skimming a hefty amount off their customers’ premium payments. Too top it all off, there is sturdy proof that insurance companies are willing to shell out the major bucks when it comes to a cause they truly feel worthy of their “hard-earned” dollars: health-care firms and their lobbyists are spending money at a rate of $1.4 million a day to campaign against the public healthcare legislation currently moving through congress.

Originally posted at InjuryBoard by David Mittleman