"California's Real Death Panels" - Data Reveals California's Private Insurers Deny 21 Percent of Claims Wednesday 09 September 2009 by: Amy Goodman | Democracy Now! The California Nurses Association/National Nurses Organizing Committee has released new data that shows one in every five requests made for medical claims by insured patients, even when recommended by a physician, are rejected by California's largest private insurers. (Photo: José Goulão Photography) President Obama begins his final drive for health care reform tonight with a nationally televised prime-time address to a joint session of Congress. His speech comes after an explosive August recess consumed by raucous town halls and talk of government-run "death panels." We take a look at California's "real death panels." That's what the nation's largest nurses group is calling private insurers, as new data reveals they denied one of every five claims over the past seven years. We speak with Charles Idelson of the California Nurses Association/National Nurses Organizing Committee. Guest: Charles Idelson, Communications Director for the California Nurses Association/National Nurses Organizing Committee. Amy Goodman: President Obama begins his final drive for healthcare reform tonight with a prime-time, nationally televised address to a joint session of Congress. Heavy negotiations are underway on Capitol Hill as lawmakers return from August recess. So far, legislation has been approved by three House committees and another in the Senate without any Republican support. Negotiations continue in the Senate Finance Committee, where Chairman Max Baucus of Montana is pressing for a bipartisan deal with his so-called "Gang of Six" senators. Speculation remains over whether the President will insist on a "public option," a government-backed insurance plan that would compete with the private sector. Obama met with Democratic congressional leaders Nancy Pelosi and Harry Reid at the White House yesterday to discuss strategy on the legislation. Speaking to reporters afterwards, House Majority Leader Pelosi said, for now, a public option is a key component to legislation passing in the House. Rep. Nancy Pelosi: On the public option, I believe that a public option will be essential to our passing a bill in the House of Representatives, because, as the President has said - and I listened to him very carefully - he believes that the public option is the best way to keep the insurance companies honest and to increase competition in order to lower cost, improve quality, retain choice - if you like what you have, you can keep it - and expand coverage in a fiscally sound way, that it saves money. And that's why - but, he said, if you have a better idea, put it on the table. And so, if somebody has a better idea of how to do that, put it on the table. For the moment, however, as far as our House members are concerned, the overwhelming majority of them support a public option. Amy Goodman: The insurance industry has spent millions of dollars lobbying against the public option, and it's unclear if a bill that includes it could pass in the Senate. A possible compromise would be a provision that would "trigger" a public option only if private insurers are deemed to have not provided suitable care. Another proposal would leave the public option out altogether and replace it with a system of nonprofit cooperatives. Many are looking to President Obama's speech tonight for answers. His address comes after an August recess consumed by raucous town halls and talk of government-run "death panels." Well, the California Nurses Association/National Nurses Organizing Committee has just released new data that reveals more than one of every five requests for medical claims for insured patients, even when recommended by a patient's physician, are rejected by California's largest private insurers. The group says this amounts to very real death panels in practice daily in the nation's biggest state. The California Nurses Association/National Nurses Organizing Committee represents 86,000 registered nurses in all fifty states. Chuck Idelson is the communications director for the group. He joins me here in San Francisco from the studios of Link TV. Welcome to Democracy Now!, Chuck. Charles Idelson: Good morning. Amy Goodman: Talk about this data that you've just released. Charles Idelson: Well, this is data that the insurance companies have always wanted to hide, and it's just now become available. It documents that the insurance companies have denied, in California alone, 45 million claims since 2002, and in the first half of this year alone, their rates continue to skyrocket. Some of these rates ranged as high as 40 percent for UnitedHealthcare's PacifiCare. And other large, giant insurers like Blue Cross, Health Net, CIGNA, Kaiser were all in the range of 30 percent. So it shows a clear pattern of very high denials by the very insurance companies that people depend upon to assure that they get care they need when they need it. Amy Goodman: Wait. I want to go through these figures again of the denial rates, of - let's start with PacifiCare, which is here in California. Charles Idelson: PacifiCare is a subsidiary of UnitedHealthcare, one of the biggest insurance companies in the United States. Its denial rates are 39 or 40 percent, 39.6 percent. Amy Goodman: Almost 40 percent. Charles Idelson: First half of this year, almost 40 percent. And then you have CIGNA, which is one-third of all claims, 33 percent. You have Health Net, 30 percent; Kaiser Permanente, 28 percent; and Blue Cross, 28 percent. So those are four of the biggest insurance companies in California. And it's clear that a substantial percentage of their - of the claims that are submitted to them are rejected. Amy Goodman: What do you feel needs to be done about this? Charles Idelson: Well, there's been a lot of discussion about the public option in the healthcare reform debate. Our concern is that the problem is not the public option; it's the private option. The insurance companies aren't in business to provide care; they're in business to make profits for their shareholders. One of the ways in which they make profits, the main way they make profits, is by collecting money from patients and from families and not paying money back in claims. They call it a medical loss ratio, every time they make a payment on a claim. So they're in business to do that. They have warehouses full of bean counters and claims adjusters, whose sole purpose is to find reasons to not make payments. And there are a variety of reasons they claim why they make these denials, having to do with - whether it's paperwork, a war that goes on between the insurance companies and the doctors and the hospitals. They also say that some of the denials are because patients were seeking treatment for care that was not covered by the plan or that they were not eligible for or that were duplicate or were experimental or investigational. What's been very interesting is that they've come up with a variety of reasons; the only they've left out is "the dog ate my homework." But the issue is serious enough that the Attorney General of California, Jerry Brown, has announced he's going to conduct an investigation into the business practices of these companies and why these denial rates are so high. But it's extremely important that this data has finally come to light, because it reflects one of the key issues that has not been discussed in the national healthcare debate, which is the denial of care by the insurance companies, which is so fundamental to the basic problem with the collapse of our healthcare system in this country. And one of the great tragedies is that issue has not come up in the national healthcare debate, that those practices by the insurance companies go unchecked, that there's nothing in the national legislation that would change this behavior. And that's why so many organizations like ours have been advocates of a Medicare for All, single-payer healthcare reform that would take these private insurance companies out of the business of denying care and gouging people for payments. Amy Goodman: I'm looking at a piece in the Los Angeles Times, and it quotes Nicole Kasabian Evans, a spokeswoman for the California Association of Health Plans, responding to the data that you've released, saying, "It appears [that] a good deal of the so-called denials are merely paperwork issues," she said. Charles Idelson: Right. If you put the best face on their claims - and some of the other insurers also said that people were seeking payments for claims that - for coverage that they did not have or for experimental coverage. We don't exactly know all the reasons that they're citing for the denials, and that's one of the reasons the Attorney General is conducting an investigation. But even if you put the best face on their claims, what it demonstrates is how much waste there is in the insurance industry and administrative overhead here. One-third of every healthcare dollar goes to waste and to claims denials. Amy Goodman: I'm also joined on the telephone by Hilda Sarkisyan. Two years ago, CIGNA denied her seventeen-year-old daughter Nataline's claim for a liver transplant. Amidst mounting public pressure, CIGNA eventually reversed its position, but by then it was too late and Nataline died. Hilda Sarkisyan joins us now from Los Angeles. We welcome you to Democracy Now!, Hilda. Hilda Sarkisyan: Thank you. Good morning. Amy Goodman: It's good to have you with us. You're dealing with your own health crisis right now, is that right? Your back. Hilda Sarkisyan: Yes, ma'am. Yes, we are. Amy Goodman: What's happening? Hilda Sarkisyan: Well, we miss her. We don't have our beautiful daughter with us anymore. And CIGNA is doing this every day, every day. And that's why I'm out there to help other families to stop them. It's not only CIGNA; it's all the insurance industry, that they are placing profit before patient, and it's not right. And they are enforcing the care of people, not their - you know, they should not enforce the care of the people to their deep pockets. It's all about their pocket, all about the CEO, how much he makes. I miss my daughter. I had a beautiful, perfect daughter. I don't have her anymore. I don't. Amy Goodman: Hilda, describe what happened to your daughter. Hilda Sarkisyan: Well, we had insurance. We were covered. We thought we had insurance. So it's like having insurance and not having insurance is the same thing. People who have insurance and don't have it, they get the same care. But having insurance and knowing that you do have it, and you are recommended to a certain hospital, because the insurance company only pays if you go to that hospital, you go to that hospital, which in our case was UCLA. We were transferred there. By the way, that's our fourth hospital within, I would say, three years, because they were jumping us around. And finally, you go there. My son gave her the perfect bone marrow transplant, perfect match. And my daughter needed a liver transplant. And so many requests, so many requests, and they were - the doctors were denied. We were denied, until the California Nurses Association stepped in, helped us out. We had to get out and go to their headquarters in Glendale, make a scene with our family, the Armenian Youth Federation, our church. Why do we have to do that? I'm a mother who should have been next to my daughter. Only if I knew she was going to die that same day, you think I would have that energy to go out there and do that? I could have been holding my daughter's hand and praying with her. This is not right. We need a better change in this country, and I'm willing to help the President to do that. And I just want to meet him. That's all I want to do. I want to meet him. I want him to feel how it feels not to have a daughter. He has two girls; he should know. Amy Goodman: What would you tell him? Hilda Sarkisyan: We need to do a better change. And there's a lot of things that I want to tell him, a lot of things, one-on-one, face-to-face, because if we don't stop this now, every family is going to have my story in their family, in every household. Amy Goodman: Hilda, we recently spoke to Wendell Potter, a name that may be very familiar to you - Hilda Sarkisyan: Yes, yes, yes. Amy Goodman: - the former head of corporate communications for CIGNA. Hilda Sarkisyan: Yes, mm-hmm. Amy Goodman: He was the spokesperson for the company when Nataline died. Hilda Sarkisyan: Mm-hmm. Amy Goodman: This is some of what Wendell Potter had to say. Wendell Potter: Even though I was having to represent the company, and again was being as truthful as I could, I all the time was just thinking about the family and the grief that they were going through and the way their - you know, they were briefly optimistic that the decision to cover the procedure might save her life, and then so quickly for that hope to be dashed was just devastating for them, I know, and it was just crushing for me and a lot of people that I worked with at CIGNA, too. I want to make sure that that's understood, that it, you know - I was so disappointed, and I was hopeful, too, that this might be something that actually would save her life. It was just a dreadful, dreadful experience for everyone concerned; there were no winners in that at all. And certainly, from a public relations point of view, CIGNA really suffered a black eye. And I, as the spokesman for the company - there were two people who really spoke for the company during this time. It was me and the chief medical officer. And I was - my name was on the website, and my contact information was on the website, CIGNA's website, and so people were venting their frustration. I received - I can't tell you how many emails, how many voicemail messages and calls from people who were just outraged. And it was a very difficult - very, very difficult thing to go through. Amy Goodman: Wendell Potter was the corporate spokesperson for CIGNA when Nataline died, after she had been denied coverage for a liver transplant. Ultimately, in the last hours, the decision came down. It was reversed, but she died at the age of seventeen. Hilda, your response to Wendell Potter, who said it's one of the reasons he ultimately left CIGNA? Hilda Sarkisyan: Yes, I know. I heard that. And you know what? What happened was, I heard this. It was the day of my daughter's birthday, July 10, and he was out, and that same day we were hosting an annual fashion show when I heard this, and it was just incredible that everything had to happen on her birthday. I mean, there was a reason for all this. And the annual fashion show, I was so strong. I had spokespeople there, and I had - was interviewed. I was much stronger, because I know I'm going to make a change in this country, under my daughter's name. Amy Goodman: You, yourself, are dealing with a health crisis now, Hilda. You have a back problem? Hilda Sarkisyan: Yeah, I just had surgery twelve days ago. Amy Goodman: And how are - Hilda Sarkisyan: It was an emergency surgery. Let's see how that insurance company is going to react now. Amy Goodman: And what did they tell you when you came in? Hilda Sarkisyan: Oh, I just went to the emergency room. The ambulance came and took me. And when they came to have me sign off on a thing on the insurance, and I just told them, "Make sure they don't mess with you." I said, "Just make sure you tell them who is the emergency room right now." And I had surgery right away. I didn't even know I was going to have surgery. So, yeah, I don't have a bill yet. We'll see how that's going to work. Amy Goodman: Chuck Idelson, your response? Charles Idelson: Well, it's interesting that Blue Cross, a different insurer, says that what they call experimental cases are one of the reasons for denials. So that's an example of what Hilda is talking about here. One of the great tragedies here, of course, is that CIGNA reversed itself in the case of Nataline, but they only reversed themselves after massive national public protest. If they were able to reverse themselves at the end of this process, why couldn't they have approved the liver transplant in the beginning? And that's part - that's part of the problem with our insurance-based healthcare system, is it shouldn't take public protest to force the insurance company to do the right thing, to do what they should have done in the first place. Yet that's the reality of what so many families deal with on a daily basis in this country, is insurance companies that deny care. Amy Goodman: Chuck Idelson, you're going to the offices of Dianne Feinstein and her home? Charles Idelson: We are. We're doing that today. That has to do with trying to make sure that working people have more of a voice in this country, when they want to be able, in the case of registered nurses, to advocate for patients with public protection of collective representation. So that has to do with the Employee Free Choice Act and that we're trying to request that Senator Feinstein become a co-sponsor of the Employee Free Choice Act, because that's a critical issue to the future of raising living standards and rights for working people in the United States. Amy Goodman: And you are the - we're in San Francisco now, the home of Nancy Pelosi. Your evaluation of her, as she meets with President Obama? He, about to address a joint session of Congress, whether the public option is going to happen? Charles Idelson: Well, the public option is, at best, light reform. That's one of the concerns we have. The problem is, as we say, the private option, not the public option. The public option, if it were given the full strength of a large risk pool, enough people were able to participate in it, the government had the ability to negotiate prices, which they're - seem to be bargaining away, might be one of the ways to keep the insurance companies honest. But you can't really keep the insurance companies honest, because that's not what they're in business to do. They're in business to make money. We're the only industrial country that ties healthcare to private profit. So, even under best case scenario, the public option would be in great danger from being - from still seeing patients cherry-picked by the private insurers and having the sickest patients in this country dumped on them and be threatened with bankruptcy. So, unless you had enough regulatory protections for a public option, it would be in danger of being outmaneuvered and being bankrupted by the private insurers in the first place. One of the things that's also happening this month is that the House is scheduled to have a full vote on on the idea of Medicare for all. There's also an amendment within the House bill to provide - that allows states to provide for - remove legal impediments so the states could enact single-payer laws, in addition to - as part of the national healthcare reform. Those are issues that we hope your listeners and viewers will support, urge their legislators to support Medicare for All, because that is the only reform that will actually solve our healthcare crisis once and for all. Amy Goodman: And that is single payer for all, the government pays for the healthcare? Charles Idelson: It would be expanding Medicare to cover everyone. Ultimately, that is the - would bring us in line with the rest of the industrial world. Amy Goodman: Well, Chuck Idelson, I want to thank you very much for being with us, communications director of the California Nurses Association. And also Hilda Sarkisyan, I want to thank you, as well, for joining us from Los Angeles. And again, condolences on your daughter, because I know it hurts you every day. Seventeen-year-old Nataline died after being denied a liver transplant - coverage for a liver transplant by her insurance company CIGNA. The reversal came down; within a few hours, Nataline had died. It was too late.