HMO Umpires


Irwin Maltz is determined to help his son get taller. Until about six months ago, 16-year-old Ross— whose development is stunted by Crohn’s disease and the drugs used to treat it— had grown only one inch in five years. Ross’s doctor prescribed human growth hormone. But the Maltzes’ insurer, Aetna/US Healthcare, refused to pay for the drug, explaining in a denial letter that the treatment was experimental.

Not long ago, such a dispute would have ended there, leaving an irate Maltz pondering a stack of futile correspondence and his son relying, at least for the moment, on donations from the manufacturer of the drug. But, thanks to a recent state law, many New Yorkers— including the Maltzes, who live in Bellmore— now have a new weapon in the battle over medical bills.

As of July 1, patients whose HMOs have refused to pay for services on the grounds that treatment is either experimental or not medically necessary can apply to the State Department of Insurance ( The DOI may then refer the case to one of two private companies, who consider the medical evidence and come up with a decision in 30 days, or less if it’s an emergency situation.

Ideally, this outside route serves as the even-handed arbiter frustrated patients have longed for. Already, the panels of independent experts have overturned 15 of 34 decisions that were appealed since the law went into effect. (The rest were decided in the HMOs’ favor, and 105 cases are pending.)

Just the threat of external review may be enough to convince some companies to reverse denials. Suzanne Frederick, a 50-year-old woman from Saugerties, thinks her HMO, Empire Blue Cross and Blue Shield, may have changed its position on paying for her to be evaluated by a lung specialist in part because she told the company she planned to file an external appeal.

Frederick— who has emphysema that leaves her breathless, weak, and unable to work— had already appealed the plan’s denial once, in September. But after she mentioned external review to plan administrators, “All of a sudden, my HMO got very nervous,” says Frederick. “The director called my doctor.” Shortly after, Frederick had a referral to see a lung specialist at New York Presbyterian Hospital. “They were afraid they’d look bad,” is how Frederick explains the about-face.

Empire spokesperson Deborah Bohren says the dispute was over whether Frederick’s specialist could be out of network, and had nothing to do with external review, which she calls “an excellent process.”

But managed-care companies do have reason to fear the powerful new oversight tool— and not just because the company must abide by whatever decision the panel reaches. External review may also prove to be an important gauge of the patient-friendliness of a plan. The DOI is tracking the number of appeals filed against each company and which way they go, so, in the future, people shopping for health plans may be able to compare which have the most external appeals filed against them.

But the new system offers only partial protection. Almost half of New Yorkers in HMOs don’t have access to the service because of a technicality: the law doesn’t apply to “self-insured” plans, in which big companies cover some of their own costs. Patients also need to have appealed once within the company before going outside it.

For Maltz, that process was delayed for weeks when Aetna failed to respond to his initial inquiry. When the company finally gave him the information he needed and Maltz filed an appeal, Aetna rejected it, saying he had missed the deadline for filing. The “mix-up” would have prohibited Maltz from getting an external appeal if the Attorney General’s office hadn’t intervened.

The biggest potential hitch is that doctors— who are paid by HMOs— need to participate in external review. “Health-care providers are put in a tenuous situation by any kind of appeal,” says Laura Kaplan, director of the managed-care project for Citizen Action for New York. Though state law says providers can’t be fired for advocating for their patients, Kaplan notes, “If the managed-care company wanted to, they can just wait until [the contract] expires and then not renew it.”

Nevertheless, the Maltzes are hopeful about external review. Irwin— who has been meeting with his son’s doctor in preparation for filing his external review application next week— knows the hormone helps his son grow. In six months of taking the drug, Ross has shot up two and a half inches. If the external review is decided in his favor, he can have the security of knowing his son will continue to get the drug if the company stops donating it. And, he adds, “I’m not giving them the satisfaction of just rolling over.”

Frederick is putting away her external review forms for now. Her newly approved trip to the specialist this week will determine if she is a candidate for an experimental lung surgery. “It may be the only chance I have to live a normal life,” says Frederick, who has been unable to work since March. She feels sure her HMO will decline the surgery, which costs at least $50,000. If that happens, she plans to dig out her papers.