Real People Suffer

[08/18/2006 Note: Comments are now closed on this entry]

I have an employer and I am an employer. This is because as a self-employed California small business person, I cannot get affordable health insurance. As a result, I work part-time for a large national business which is related to the health care industry and which provides health, dental, legal and other assorted benefits. That job is for benefits; my business is for money.

When I am not doing part-time work for my employer, I am a small business owner. My profession for the past 25 years has been third-party pension administration. I am in this business because I saw a need for small employers to have someone sitting on their side of the table — someone who was not there to sell them insurance or investments to go inside of their pension plans, but to guide them through the government filings, regulations and constant changes. Having been on the periphery of the insurance industry in one way or another for all of my career, and having been an employee of the life insurance industry early on in my career, I view insurance companies as inherently self-serving semi-evil necessities.

There. You have my bias up front. That bias comes from being on the inside. The grist for the insurance mill has always been the good ole boy carrot system. Same is true (although less true these days) of the investment industry. In the fat days, licensed brokers routinely received all-expense paid trips to Hawaii, toys, games and lots of fun. That’s changed as scrutiny has increased (a good thing!) and more employee dollars are in the investment pool, but there’s still much more to be done. For years, TPAs were viewed as loss leaders for the insurance sales force, now we’re our own force to be reckoned with. I am proud to have been on the leading edge of that trend.

All of that was to establish a foundation for what comes next. You need to know that I am not ignorant or stupid about the inner workings of the insurance industry, what their motives are, how incredible their ‘bloat’ is, and how most of that ‘bloat’ ends up in the executives’ pockets.

Cronies and Rebates

The insurance I have through my employer utilizes AdvancePCS (now Caremark) as its pharmacy benefit manager. Since AdvancePCS has been the manager, I have not been able to get the proper authorizations for Concerta or AdderallXR. I took my appeals all the way to Tier 2 in 2003 when they denied A’s Concerta and ended up paying for it out of pocket. When he switched to AdderallXR, they also would not approve it, and so I not only paid out of pocket, I paid the non-discounted price for it because they were not willing to even approve it to that level. As a result, I chose to stay on the generic Dexedrine for me despite the fact that it was ineffective because I could not afford out of pocket for both of us.

Make no mistake: I did not accept this denial quietly. I started doing research on how AdvancePCS handled claims, prior authorizations, and scripts for medications that were not on their “preferred list”. What I discovered was pretty scary, and it was happening all over the country to lots of John and Jane Employees just like me who were trying to live in the system but also within a set of parameters that allowed for their kids to be successful and for them to have a good quality of life.

Consider these stories:

1. S describes her journey through the infertility halls of AdvancePCS and Blue Cross
2. ukyochan’s tale of ‘approve and renege’
3. mikki’s story of the approve/unapprove process of prescribing
4. dagnydoll’s story about co-pay doubling with no notice

These are just a few of the stories I found on blogs after a 5-second Google Blog Search on Blue Cross sucks. I can only imagine the results I’d get on one that is “AdvancePCS ripped me off”.

Here’s the thing: Cost containment is the big sexy term in the health insurance industry. It is the foundation (excuse) for rising costs and benefit reductions to employers, employees and is the catalyst that is causing doctors to pull in their shingle and opt for academia or completely new careers. It is the buzzword of the day. In the name of cost containment, Blue Cross, AdvancePCS and other PBMs are permitted to commit egregious errors, override the judgement of one’s primary health care provider, and deny — yes DENY — treatments and medications to people who really need it.

And yes, I have a real problem with seeing Viagra on the list of Tier I medications (meaning that the lowest copayment applies) and medications for mental health (including ADHD) falling into Tier 3 (the HIGHEST co-payment).

Do I think the concept of cost containment is good? Yes, I truly do. There are areas where it is certainly prudent to be cautious about treatments and medications — witness the Vioxx/Bextra/Celebrex recalls. Of course, I could argue that all three of those medications should have been more carefully scrutinized prior to approval, but it’s too late now….so yes — cost containment is a good thing.

However, cost containment is not being implemented fairly or properly. This question of prior authorization for medications that a licensed health care professional has prescribed is just wrong. But what’s more wrong is how the PBMs (AdvancePCS/Caremark) approach it.

The approach that they have quietly taken is to negotiate a “rebate” system with pharmas. Depending upon the size of the ‘rebate’, they place the medication on their Tier I, Tier II or Tier III pharmacy benefit list. That means that the pharma isn’t negotiating a price for mass distribution of their product; they’re negotiating a payola scheme with the PBM where they agree to rebate part of the cost back to the PBM, which goes toward this “cost containment” process.

THIS IS A CRIME

These guys should be prosecuted just like the Tyco and Adelphia executives! Rebating has long been an illegal practice in the insurance industry. If an agent were to go out and negotiate with a client to pay a million dollars more in premiums than were actually required with the promise that the agent would refund a part of the cost to the payer they’d go to jail. Don’t pass Go, Don’t collect $200. It’s ILLEGAL.

The State of California smelled a rat; so did others. With the introduction of the Medicare prescription plans which were authored in part by the CEO of AdvancePCS (a Bush buddy, by the way), the question of Rx costs became a huge question. Ultimately whistle-blowers caused the Feds to file lawsuits which were settled without admission of liability by Caremark earlier this month for $137 million (which I’m sure is just a small fraction of what they received, by the way).

The settlement is symbolic. It was a way for Caremark to get out from under the actions of a corrupt CEO of an acquisition (AdvancePCS) and the only ones that really benefit from it will be the lawyers. Certainly those of us who were penalized and denied and had to dig into their pockets to deal with the incredibly corrupt business practices of this company will not see a benefit. And I am cynical: I don’t believe their promise to adhere to a best practices policy will realize a benefit to those of us who are beholden to their pronouncements from on high.

So far, these posts have been an extended rant with very little in the way of action items. So stay tuned for:

Next: Why we should care and what we can do

adhd, insurance cost containment, AdvancePCS lawsuit

Tagged as: ADHD, Business, Insurance and Benefits