For Governor Cuomo: A lesson about the nature of the insurance industry

I have used this space as well as our Facebook page to chronicle the ongoing problems with municipal takeover of health care.  The problems with billing and payments to health care providers has gotten a lot of press lately and Governor Cuomo and his administration are taking some very well deserved lumps for their inept management of the Bureau of Early Intervention.

There is an apparent inability to understand the nexus of their legislative and regulatory fiats with the corresponding impact on service delivery.  All we get from our government is statements that the problem lies with private insurers that have failed to pay their share of the program's cost.

Albany intended to share costs, but they do not intend to share responsibility for their actions that contribute to the problem.

What they fail to understand is that when the government burdens a private entity you can count on the fact that there will be push-back from the private entities.  Failing to take this into consideration has been a recipe for disaster.

As a stunning example of the push-back from insurance companies, I received a letter from United Healthcare today that announces a new policy for their Medicaid Managed Care lines.  Under the new policy effective September 1st 2013, physical/occupational/speech therapy for children under 21 will now require authorization after the 12th visit.  Previously, there was no authorization policy for children.

What is interesting is that there can be no benefit limit for children under 21 according to NYS Medicaid rules.  Pragmatically, this will serve to further 'gum up' the process of providing ongoing therapy for children who have developmental disabilities and it can cause short term delays and interruptions in service provision.

Maybe United Health Care is hoping no one will notice that their policy contradicts NYS Medicaid regulations?  I called their Provider Relations department and they had no knowledge of the new policy that was mailed out to providers.  It is possible that they found some new wrinkle in the regulations that they could exploit - I would not be surprised.

Here we have a situation where government created a very liberal benefit that it could not afford, and then mandated cost sharing with private commercial insurance that they did not want to pay for.  Rather than create a context of reasonable discussion about what we could or could not afford as a society, now we are stuck with mandates that contribute to a disastrous failure of our health care systems.

Both government and businesses are complex entities, and studying municipal and market forces that impact service delivery is also complex.  Despite the complexity, we should still expect to have governmental administrators who understand how these forces interact.  When that doesn't happen (as is the norm), we have the problems that we see with the early intervention program.

Government is making up rules and new mandates; the insurance companies are responding in kind.  Families who require these services are caught in the middle.

Failure to understand how these forces interact is entirely the fault of government.  These are basic issues - so here is a  basic lesson for Governor Cuomo and his administration to think about the next time they come up with new rules for the insurance industry:


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