Aetna CEO Makes $18 Million While My Wife’s Claim Remains Unpaid
It occurs to me that I really need to make key friends. For example, if I had Ronald Williams as a friend, maybe getting my wife’s claim resolved wouldn’t be such a bother. After all, it probably looks like chump change to him:
— Ronald Williams, chief executive of Aetna Inc., received compensation last year valued by the insurance company at nearly $18.2 million, according to a proxy statement filed Monday.[...]
He also received other compensation of $104,162, including perks such as $77,098 for personal use of company aircraft and $10,314 to use company vehicles.
Tags: Aetna, CEO Salaries
Conspiracy Theory du Jour
I noticed that this week’s episode of Frontline on PBS is supposed to look at health care systems around the world, presumably as a contribution to the ongoing universal health care buzz in the country.
I also noticed that this week, Connecticut Public Television is opting to air a rerun of an older episode, discussing the hazards of online bullying among children.
CPTV is, if I’m not mistaken, underwritten in part by certain Hartford-based insurers.
Hmmmmm….it could be coincidence, I suppose.
Tags: Censorship, Universal Health Care
Not Paying Claims Doesn’t Necessarily Mean Not Knowing What They Are
Charlie Baker with Pilgrim Health Care has an interesting blog post responding to a health care op-ed that appeared in the New York Times on the subject of controlling health care costs.
Charlie writes:
Krugman states that, “They (health insurance companies) also deny as many claims as possible, forcing doctors and hospitals to spend large sums fighting to get paid.” For me, this statement of “fact” is right up there with the one about how 40% of health insurance premiums funds health plan administrative expenses and profits. Unfortunately, Krugman isn’t the only one who believes it. Many people would like to believe it, too. Too bad it isn’t supported by the evidence. In fact, I’d say just the opposite. I believe that health insurance plans that don’t pay claims accurately and on a timely basis fare worse financially than the ones that do, and Harvard Pilgrim is Exhibit A to support my argument.[...]
You see, plans build their prices for the next twelve months based on the claims they paid in the last twelve months. Since medical expenses make up 85-90% of total expenses, it’s critical to get this number right. If a plan is doing a bad job of paying claims properly, it underestimates what its prices need to look like going forward to cover its future costs. When it underprices its products, it loses money – not just now, but for the next year as well.
In short, a health plan that does a bad job of paying claims inevitably does a bad job of pricing its products, because the plan doesn’t know what its true costs are. This leads, inevitably, to financial losses. The landscape is littered with plans that hit the skids financially because they did a bad job paying claims – not the other way around.
There is a significant logical flaw in that statement.
Charlie assumes that if a claim is denied, then an insurer assumes that it’s done and no payment will ever be required. See no evil, speak no evil, hear no evil. And, while I can see some poorly-run insurance companies naïvely taking that stance, that isn’t necessarily the case.
I do work in the insurance industry. And, I know, first hand, that just because an insurer may decline to pay a claim, it doesn’t mean that records aren’t being kept, reserves aren’t being set aside for future payment, and that the claim isn’t being monitored for development. As long as the insurer is being realistic in how its claims will eventually develop out, denying claims as a means to try to reduce payouts is going to work.
Also, I can’t tell how much the original NYT op-ed was based on true health insurance, and how much of it was based on the system that I and many other Americans are covered under—employer self-insured programs with claims handled by a third-party administrator. (Aetna, in my case).
With employer-provided, self-funded programs, the TPA’s customer is the employer. The TPA bears little, if any, of the actual underwriting risk. They’re paid a fee for their administrative services, and the relationship will continue as long as the employer they’re serving is kept happy, and costs are contained as much as possible.
Thus, there is frequently no incentive for the TPA to not attempt to deny or limit payment whenever it think it might succeed…especially since federal law protects TPA’s from jury trials and punitive damages should the be sued for such shenanigans.
Tags: Claims Handling, Reserving
Aetna Expands Definition of “Experimental” For Chiropractic Treatment
This post at ChiroEco.com caught my eye:
A new Aetna Mid-Atlantic policy distributed by American Specialty Health Networks treats interferential current therapy (IFC) and the use of manual spinal adjusting instruments as experimental and investigational, and are therefore not covered, according to the American Chiropractic Association (ACA).
According to the ACA, attempts to contact Aetna in regard to these policy changes, which became effective March 1, have not been successful and no response has been received. The ACA states it would continue to work with Aetna to develop policies, but will also explore other options if its collaborative effort is not productive.
The reason that it caught my eye—well, my little war against Aetna got started because they had previously been paying for procedures such as the one my wife underwent last year…but which they started to decline as “experimental” at about the time of my wife’s surgery.
What do you expect from a company which observed in their most recent denial letter, “your claim was reviewed by a board-certified pediatrician”. (Since when have board-certified pediatricians been best qualified to review claims from middle-aged women suffering from chronic pain conditions?)
Tags: Chiropractic, Experimental