Necessity" Provision Would Hurt Consumers, Increase Health Care Fraud
March 2, 1999
CONTACT: Richard Coorsh
WASHINGTON, D.C., March 2 – A "medical necessity" provision
contained in leading so-called patient protection legislation would hurt
consumers by allowing health care providers to prescribe unnecessary care
virtually unchallenged, according to a new report released today by the
Health Insurance Association of America (HIAA).
According to the HIAA report, these bills would allow providers to
determine what services are covered, including treatments that may no
longer be considered effective, and where and how those services are
delivered. The report also states that the "medical necessity" provisions
would make it next to impossible for health insurers to stop provider
fraud and abuse.
"These so-called patients’ bill of rights proposals would give virtual
carte blanche to treatments that are unnecessary, and sometimes
even dangerous," observes HIAA President Chip Kahn. "The result: consumers
pay higher premiums and receive lower quality health care."
Taxpayers pay for fraud and abuse through higher taxes, and consumers
pay for it through higher health insurance premiums, notes Mr. Kahn.
"On the one hand, the Clinton Administration has just announced a major
initiative to fight health care fraud and abuse, and would never want to
retreat on fighting fraud in the Medicare program. On the other hand,
so-called patient protection legislation supported by the Administration
would tie health insurers’ hands when fighting fraud and abuse. This is
worse than hypocrisy – this is public policy malpractice."
HIAA’s report – based upon a legal opinion by Washington, DC-based
attorney William G. Schiffbauer – notes that under the major so-called
patient protection bills, providers can defend decisions to prescribe
marginal or unnecessary care as being consistent with vague "generally
acceptable principles of professional medical practice."
"This is a standard that you can drive a Mack truck through," opines
As a consequence, health insurers would be unable to fight medical
fraud and abuse, which account for approximately one-tenth of the nation’s
trillion-dollar annual health bill, according to government estimates.
Each year, up to 120,000 Americans die and an additional one million are
injured due to medical mishaps, some of which are attributable to
unorthodox or unnecessary treatment, according to the HIAA report.
The Health Insurance Association of America is the nation’s most
prominent trade association representing the nation’s private health care
system. Its 269 members provide health, long-term care, disability, and
supplemental coverage to more than 115 million Americans.
PLEASE NOTE: A copy of this study is available at http://www.hiaa.org/newsroom/mednecwhitepaper.html
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