Spitzer Goes After Health Plans

March 30, 2004 (PLANSPONSOR.com) - New York State Attorney General Eliot Spitzer said health insurance companies have been withholding information from patients about which procedures they consider medically necessary, and threatened to punish them for not being more forthcoming.

Spitzer’s office released on Tuesday the results of a survey showing that nearly all health plans violated the law by not revealing their criteria about whether a medical procedure will come under their policies, Reuters reported. The insurance companies include some of the nation’s largest, such as Aetna, UnitedHealth Group Inc., Cigna Corp, and Oxford Health Plans Inc.

Spitzer said he would not fine the health insurers yet, but he has contacted them and if they fail to comply, he might seek punishment. “Our mission is not just punitive. Our mission is to say we want you to live up to the statutory mandate,” Spitzer said at a New York press conference according to Reuters. “But we’re lawyers, we’re prosecutors, we’ll do what we need to do.”

For the survey, the attorney general’s office wrote letters from contrived customers seeking information about coverage. Each insurer received five letters inquiring about coverage for five different medical treatments: insulin pumps for diabetics, surgery for Crohn’s disease, arthroscopic knee surgery, enteral formulas for people who can’t swallow, and breast reduction surgery.

Spitzer’s office chose those five areas because they involve procedures that typically can be performed only after they are declared medically necessary under objective criteria. Several letters went unanswered by the health plans, while others elicited inadequate or incomplete responses. Only Empire HealthChoice rated a ‘B’ on a grading scale of A-F. Eighteen out of the 22 health plans surveyed received either a D or an F.

For more information, go to http://www.oag.state.ny.us/press/2004/mar/mar30a_04.html .

Spitzer has been a key driver in the continuing federal/state investigation of abusive mutual fund trading practices.