Insurance Company Savings
We understand completely the idea of incentives in the workplace. If an employee does his job particularly well, we think a reward system of some kind makes perfect sense. Such a system is good for both the employee and the employer, as it encourages the employee to work harder while the employer reaps the benefits of those labors.
Performance based initiatives are great if you happen to be selling cars, or making donuts or tires. But we have a real problem with the idea of rewarding employees for denying crucial and needed services. And this is exactly what is happening with health care in California, and possibly all over the country.
A recent article in the Los Angeles Times details the inner workings of Blue Cross of California, in which employees are rewarded not for providing medical care, but rather for denying it.
“The documents show, for instance, that one Blue Cross employee earned a perfect score of "5" for "exceptional performance" on an evaluation that noted the employee's role in dropping thousands of policyholders and avoiding nearly $10 million worth of medical care.”
Bear in mind that this employee was not rewarded for selling more policies, or cutting delays of payment, or even having a sunny disposition with customers. This employee was rewarded for cutting policyholders who might have actually cost Blue Cross money. This employee was rewarded for denying insurance claims. This employee was rewarded for leaving sick people in serious financial trouble.
This is the inherent flaw in a for-profit health care system. In any business, profits are maximized by improving efficiency and cutting costs. In the health insurance business, the only way to cut costs is to cut the health care itself. This means that sick people are culled from the rosters of insurance companies, as their illnesses might actually end up costing the insurers money. They do this by systematically targeting anyone with breast cancer, leukemia, and up to 1,400 other illnesses. They also scour medical and pharmacy records to see if there are any discrepancies between what they have been told by the policy holder and what these records could tell them. For instance, if a policyholder gets cancer, and the insurance company finds out that five years ago the policyholder got a prescription for an anti-smoking drug, the insurance company could then drop the policyholder for not telling them about the smoking. And if that doesn’t work, insurers can simply partially deny claims, often using the excuse that a certain test or procedure was medically unnecessary or voluntary on the part of the patient, even if it wasn’t.
Insurance companies will not admit to these practices. In fact they claim exactly the opposite. In fact, a California Blue Cross executive released the following statement to the LA Times:
"{There is} no policy to factor either the number of rescissions or the value of claims not paid in the evaluation of employee performance or when calculating employee salary or bonuses."
The closest insurers have ever come to publicly admitting this practice might have happened just after the House Health and Human Services Committee of the Colorado State Legislature killed a bill that would have made rewarding adjusters for culling sick people illegal.
The bill was SB 103, which was named the Unfair Claims Practices Act, contained the following language:
"defined as an unfair claim settlement practice and a deceptive act or practice in the business of insurance the practice of providing any pay, salary, reward, bonus, promotion or other financial incentive to any person involved in the review of a claim for benefits or to persons perfoming utilization review, in conneciton, directly or indirectly, with the denial of a claim made by an insured or claimant or the cancellation of an insurance policy."
Shortly after SB 103 was killed in committee, a member of the Property Casualty Insurers Association of America simply re-iterated what the bill was supposed to do:
“{The}bill would have prohibited insurance companies from giving bonuses and incentives to insurance adjusters and other employees for denying claims.”
Perhaps realizing what he was saying, the insurance company representative then caught himself and went back to the old standby of blaming the lawyers:
“SB 103 was just an unnecessary bill conceived to advance trial bar interests," said Kelly Campbell, PCI regional manager, who noted it would have increased litigation and subsequently driven up insurance costs. "Insurance carriers do not financially reward their employees for denying claims. Rather, it's in insurers' best interests to deliver good customer service and settle claims fairly."
With that statement, Kelly Campbell is implying that a policyholder who is unhappy with the treatment that he received from Blue Cross can simply take his business elsewhere. And maybe that’s true, but that wouldn’t help him take care of the tens of thousands of dollars worth of medical bills that Blue Cross stuck him with.
So Blue Cross of California might have lost out on the monthly premiums, but they saved themselves $10,000. And those premium dollars will surely come back when somebody else signs up. After all, who wants to go without insurance these days?
As attorneys who help the injured in D.C, Maryland and Virginia, we have yet to find a bottom when it comes to how low insurance companies can go. And when we hear stories like this, we can admit to being angry, but we can’t admit to being surprised. A great deal of our work on behalf of the injured involves coming to grips with the various denials and delays of insurance companies, and there really isn’t much that they won’t do in order to avoid paying for medical treatment.
If you have been injured in an accident that wasn’t your fault, the most important thing that you can do is to contact an experienced injury attorney as soon as possible. This doesn’t just involve having someone to look after your interests when it comes to compensation. It also means having someone on your side when it comes to dealing with the insurance companies. It’s important to remember that you are only a customer up until the point where you get hurt. Once that happens, you can become either a liability or a “savings opportunity.”
If you or a loved one has been injured in an accident in the District of Columbia (DC), Maryland (MD) or Virginia (VA), contact Greenberg and Bederman for a free legal consultation today.
Read about our accident lawyers by clicking on our accident lawyers link, or watch our accident lawyers videos on UTUBE.
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