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Question from A woman from Pennsylvania:

I am a resident of the state of Pennsylvania. I have health insurance through my employer. A state mandate is in place for coverage of Diabetic Supplies. My 9 year old daughter is a type 1 Diabetic. The insurance company will only cover 50% of her pump supplies - classifying them as DURABLE MEDICAL.  The fine line comes in because - they are "covering" them. I have tried many avenues, to no avail. I have even writen to 2 legislators. I have contacted many government agencies, and filed a complaint with the PA insurance department.

How can the covered insulin be administered without a pump or injections. We choose the pump for the over-all life long effects of better amangement hopfully resulting in less complications - per my daughters doctors advice.  HELP!!!  I am a single parent, and this is a real hardship
 

If you can offer any help, advice or direction, I would be grateful.

 Reply

Pennsylvania is one of the states that mandates that insurers cover the cost of diabetes treatment and are.   40 Pennsylvania Statutes, section 764(e) provides, in relevant part:

. . . (a) Except to the extent already covered under another policy, any individual or group health, sickness and accident insurance policy, group health insurance plans/policies, and all other forms of managed/capitated care plans/policies or subscriber contract or certificate issued by any entity . . . shall provide coverage of the equipment, supplies and outpatient self-management training and education, including medical nutrition therapy for the treatment of insulin-dependent diabetes, insulin-using diabetes, gestational diabetes and noninsulin-using diabetes if prescribed by a health care professional legally authorized to prescribe such items under law. The benefits specified in this section may be provided through a combination of policies, contracts, certificates or riders, including major medical contracts.

. . . (c) Equipment and supplies shall include the following: blood glucose monitors, monitor supplies, insulin, injection aids, syringes, insulin infusion devices, pharmacological agents for controlling blood sugar and orthotics.

. . . (e) The coverage required under this section shall be subject to the annual deductibles, copayments or coinsurance requirements imposed by an entity subject to this section for similar coverages under the same health insurance policy or contract.

Subparagraphs (a) and (c) would seem to require an insurer to cover the cost of treating diabetes, including the cost of insulin, syringes, insulin pumps, infusion sets and tubing, etc.    If they were the only provision in the law, then it would be clear that an insurer cannot avoid its obligation to pay for these items by calling them "durable medical equipment" and then paying for them under a different provision in the policy that provides a lower reimbursement rate.

Unfortunately, subparagraph (e) muddies the waters somewhat.  It says that the mandatory coverage shall be subject to the same deductibles, copayments or co-insurance requirements imposed by the insurer for "similar coverages."   It is not clear how much this provision weakens the mandatory benefit.   Clearly, the insurer is permitted to apply the policy's deductible and co-payment requirements.  So, if the policy has a $500 annual deductible before it will provide any reimbursement, that will have to be satisfied.   If the policy provides reimbursement at the rate of 80% of usual and customary charges, then the coverage for diabetic supplies will be reimbursed at the same rate.   The 20% that the insured pays in this example is usually referred to as "coinsurance."  A "copayment" is typically the amount that an insurer is required to pay for care at the point of treatment.   For example, if your policy has a $20 co-payment, then each time you incur a charge, you will have to pay the provider $20 at the time of the service.   Then, the provider will bill the insurer, and the insurer will send an explanation of benefits the details how much of the charge it allowed and how much the insured must pay.

Your insurer seems to take the position that its policy reimburses durable medical equipment, which is "similar" to the diabetes treatment supplies you require, at a given rate of co-insurance.   Is this permissible?  It's difficult to say.  I think a strong argument can be made the insurer is subverting the terms and intent of the statute by not paying for the cost of the supplies at the normal co-insurance rates.   I would argue that an insurer cannot escape its mandatory duty to provide coverage for the cost of diabetes treatment by re-categorizing the supplies as something it does not have to pay for, or that it only has to pay for on a limited basis.  Under this approach, an insurer could avoid having to pay for insulin entirely if its policy did not provide prescription drug coverage , or if its prescription drug benefit provided coverage only for a limited number of refills.

Under Pennsylvania law, if a policyholder is forced to sue her insurer to recover benefits owed under the policy, the court may award interest on the claim, punitive damages, and attorneys fees if the court finds that the insurer acted in bad faith toward the policyholder.   (42 Pa.C.S.A. 8371.)

If you obtain your health insurance through your employer it is likely that your claim would be covered by a federal law called ERISA, 42 U.S.C. 1144.  ERISA does not apply if you purchase your insurance privately, outside of your job.  It also does not apply to public employees, or employees of churches.   If your claim is subject to ERISA, the insurer will be required to follow Pennsylvania law requiring it to cover the cost of diabetes treatment, but any claim you bring against it in court will be subject to federal law, which will not allow the court to award punitive damages.   If you win your claim under ERISA, you can still recover interest and attorney's fees.

I would suggest you file a complaint against your insurer with the Pennsylvania Insurance Department. http://www.ins.state.pa.us.  You should also try to locate an attorney to bring suit on your behalf on a contingency fee.   You can locate lawyers who handle these types of claims by typing "Pennsylvania insurance bad faith attorney" into an internet search engine like Google or Yahoo.

Your situation is difficult, but not impossible, and I wish you every success.   I am sorry that I cannot bring suit on your behalf, but I am not licensed to practice in Pennsylvania.

Jeffrey Isaac Ehrlich

 

Mr. Ehrlich, the parent of a child with diabetes, volunteers his time to help answer questions about health insurance and diabetes discrimination.

   

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Page Updated 01/26/2006