LMO: I came to the Attorney General’s office in late 1999 to help create the Health Care Unit, which was launched in Feb. 2000. The purpose of the unit is to assist Pennsylvanians who were having problems with health care issues. The original thrust was to help consumers, and I was going to explore other areas where there was a need for bringing the power and prestige of the Attorney General’s office into a debate on certain health care issues – including private citizens, health care providers and insurance companies. We were able to expedite matters involving people who were having problems getting approval for treatment. We brought the ability to be a "quick strike" to any problem, particularly those in which time was precious. A typical example would be someone who was denied a health care service that was clearly covered under their policy, or in some cases mandated by state law. Once we had been doing this for a while we could start to see an overall picture of problem areas that weren’t isolated to one insurance company or health care provider – they were problems that clearly were statewide issues. During the first year, we had over 1,000 complaints, and by the second year had increased that by 50 percent. I understand now that it’s up to about 3,000 cases a year. About 10 percent of the complaints were shifted to other agencies because they involved problems that clearly were within the regulatory authority of the Health, Insurance or Public Welfare Departments.

LMO: Yes, the unit has full authority under the Consumer Protection Law to look at anything in the health care arena that would have an adverse effect on a consumer. We had gotten into a number of billing issues with some providers – for example, one week we started getting a large number of telephone calls from the Philadelphia area about collection practices. We invited the collection agency to a meeting in Harrisburg to explain what they were doing, because they seemed to be going over the line and running afoul of the hold harmless provisions under Insurance and Health Department regulations, and also the Consumer Protection regulations. We brought some egregious practices to a screeching halt pretty quickly.

LMO: That was something that I was looking at – that we would eventually expand our horizons to help health care providers, including physicians and hospitals, deal with patterns and practices of systemwide abuses, whatever they may have been. The most pressing one that came to our attention was the denial of detox and rehab treatment for people with alcohol and other addiction problems.

LMO: We’d get a complaint, a signed form, and we’d start making calls and speaking with people in authority – primarily in various insurance companies or their contractors. We would attempt to mediate the dispute and, if we determined there was a practice in violation of any of the laws of the commonwealth, we would have meetings in Harrisburg with their attorneys to discuss the way they were doing business. We would sometimes bring in independent experts to advise us on certain issues. On an individual basis, I think we were pretty successful in resolving the difficulties – probably close to 90 percent of cases in favor of the consumer. The unit had the authority to bring a civil action against an entity doing business in the commonwealth, if we established a pattern of practice of some bad behavior. If we couldn’t work out a problem, we would be prepared to have a court order them to do the right thing.

LMO: No, we never went to court, and I am unaware that the unit has taken any legal action since I left at the end of 2001. I was recommending to the Attorney General some time in late 2001 that I believed I had enough evidence to suggest that there were some serious issues with the non-delivery of behavioral health services and the denial of payment for those services by all the major health insurance companies in the commonwealth, and that legal action was necessary. The highest number of complaints the unit received, on a percentage basis, involved behavioral health issues – perhaps a full 10 percent of our caseload – and that got our attention. This type of issue was coming up every month – every week, practically.

LMO: The problems that I saw were flat-out denials of treatment to people who clearly had an alcohol or drug addiction problem. My reading of Pennsylvania’s Act 106 – passed in the late 1980s and reauthorized in the early 1990s – led me to believe that this was unlawful. Act 106 is the only law like it in the U.S. It mandates that, in any group health insurance policy issued by a health insurer in the commonwealth, coverage be provided for detoxification, or inpatient or outpatient rehabilitation. The only requirement needed for the coverage to be triggered is the certification of the treating physician that the person needs alcohol or drug rehab, inpatient or outpatient. The problem is that insurance companies, through their behavioral health subcontractor, apply a precertification requirement, which in my view is absolutely illegal. Under Act 106, once the "medical necessity" determination is made by the treating physician, that automatically triggers the coverage. The prescription is the certification. But insurance companies are requiring precertification for these cases and it appears that it is being denied – probably 90 percent of the time, based on what I’ve seen and on anecdotal information. It’s almost never 100 percent approval of what the treating physician recommends – there’s always a cutback of some fashion. I view that as a denial. I view that denial as illegal.

LMO: We had to gather evidence through a series of complaints, an investigation of those complaints and the processes that were involved. We were able to resolve individual cases but I then suggested to the Attorney General that we needed to take legal action against the various insurance companies in the commonwealth because of repeated violations of Act 106 by the one behavioral health subcontractor that a number of the health insurers used. In my view, we had to bring this to a halt because Act 106 was clearly being violated with impunity by this company. My recommendation to bring a legal action was rebuffed, and I think there was a lack of political will to do the right thing. I left the Health Care Unit at the end of 2001 because there was a serious policy disagreement as to the direction of the unit and the need to pursue legal action regarding the noncompliance with Act 106 by various parties throughout the commonwealth.

LMO: On Nov. 10, 2005, I attended a hearing in Harrisburg under the Health and Human Services Committee of the State House of Representatives chaired by Rep. George Kenney, of Philadelphia. I sat there all afternoon and listened to the kind of complaints that I heard in the latter part of the year 2000, so I believe that the Attorney General’s Office has not taken any action. Whether they are contemplating it, I don’t know. One of the citizens who testified at the hearing told about what his family went through when his ex-wife was denied alcohol treatment. Even after they offered to pay for it out of their own pocket, they couldn’t get any treatment facility to accept their funds because the lady’s health insurer had made the determination that she wasn’t entitled to inpatient treatment. They gave her a few days of outpatient treatment and, 18 months later, she was dead as a result of her alcoholism. Two drug and alcohol rehab centers testified that they’re still getting horsed around by insurance companies and their subcontractors when they get somebody sent to their facility for treatment.

LMO: It’s still a major problem, in my view. I think what needs to be done is to file the appropriate lawsuit to bring these abuses to a halt. The Pa. Insurance Department in 2003 issued a statement of policy in the Pennsylvania Bulletin with their interpretation of Act 106, and it coincided with mine – that the only prerequisite to the treatment is the certification by the treating physician. I started the process because I had talks with people the Insurance Department, but it still took a year and a half after I left the Health Care Unit for the Insurance Department to come out with this policy statement. Theoretically, it should begin to solve the problem, but the insurance companies and the Insurance Federation filed a lawsuit in Commonwealth Court to prevent the implementation of that policy. The matter was argued before a three-judge panel in Sept. 2004, and a few months later the entire court asked to hear the case. At the end of April 2005, the court issued a ruling in which they said they don’t have jurisdiction to hear it. The Insurance Federation took an appeal to Pennsylvania Supreme Court, both sides have filed their briefs and they’re waiting to see whether the Supreme Court will hear argument on it.

Since I left the Office of Attorney General I have pursued Act 106 care, treatment and denial issues in both state and federal court on behalf of private clients. Some of these actions include the Secretary of Health and Insurance Commissioner as defendants. My investigation has led to the discovery of a larger problem in our health care payment and treatment system that, in my view, unconstitutionality interferes with a physician’s contract with his or her patients. The etiology is the so-called "hold harmless" provisions of state regulations regarding health insurance. These regulations mandate specific language in every health care provider contract in the Commonwealth. This entangles the insurance companies as state actors by enforcing a regulatory scheme which ultimately interferes with a physician’s decision-making as a licensed professional. The result has far-reaching consequences and raises substantial constitutional questions about state impairment of the right of contract and due process of law for physicians and their patients. A number of advocacy groups – local, state and national – are following these cases and expressed a willingness to write friend of the court briefs supporting my position as these matters proceed.