Health Insurers Told To Be More Informative

Health insurance companies are being encouraged by New York State Attorney General Eliot Spitzer to reveal to their policyholders which medical procedures are considered to be medically necessary.

In anonymously surveying some of the nation's largest insurance companies, Attorney General Spitzer discovered that they had been withholding such information from patients. Spitzer said he has notified the insurance companies to begin living up to statutory mandates. If not, the attorney general said prosecutors would "do what we need to do."

The attorney general's office, which has been in the forefront of investigating abusive mutual fund trading practices, surveyed the insurance companies by sending them letters from hypothetical customers seeking information about coverage. Each insurer received five letters inquiring about coverage for five different medical treatments: insulin pumps for diabetics, surgery for Crohn's disease, arthroscopic knee surgery, enteral formulas for people unable to swallow, and breast reduction surgery. Those medical conditions were selected because they involved procedures that typically can be performed only after they are declared medically necessary using objective criteria.

In gathering survey results, Spitzer found that several letters went unanswered by the health plans, while others provided inadequate or incomplete responses. In grading responses on a scale of A–F, the attorney general's office gave 18 of 22 health plans surveyed either a D or an F.