Insurance obstacle preventing necessary treatment

| 03/10/2017

I need an expensive procedure which is over the limits of my health insurance. I have negotiated a reduced price with the hospital if I pay them cash. However, my insurance company refuses to authorise me to proceed with the treatment, saying they will only reimburse the hospital directly, not to me. This means that I cannot get the treatment I need because the amount I would pay over and above the insurance reimbursement is more than I can afford if it is charged at full rate.

It makes no sense. If I agree to a reduced price, then everyone benefits. I pay less, the insurance pays less, and I can get treatment. But no, the insurance will only pay out if the hospital charges me the full rate price, which I cannot afford. This is just a scam surely. I thought insurance was to reimburse medical expenses, not to subsidise hospitals overcharging for procedures.

Auntie’s answer: I am sorry for what you are going through. It is bad enough you have a health issue, but compounding that you have to deal with rules that seem to have no basis in logic or simple math. I sympathise even more because I have faced (and know of others who have as well) unyielding and unsympathetic insurance companies whose mission seems at times to align closer with providing no help rather than to expedite getting the person the medical assistance they need.

As for your question, I was able to contact the Health Insurance Commission (HIC) about your case, and have received a response, which seems to be fairly positive.

The process of pre-certification is used by the insurance companies to verify whether a request from a healthcare provider (registered healthcare facility and/or registered medical practitioner) for a proposed medical procedure or service is medically necessary. Once it’s approved, the patient shows their insurance card to the provider to confirm that they are covered and the payment is then sent to the provider.

The problem in your case is that while the procedure is medically necessary (and, I’m assuming, covered by your insurance plan), the insurance company is saying they will only accept a pre-certification directly from the hospital, which will have to put in the full price it would normally charge and not your negotiated reduction.

However, the HIC official said that “some” approved insurers will reimburse the insured person for the claim if they have a receipt that proves they paid for the procedure.

But then he pointed to section 21 of the Health Insurance Law (2016 Revision), “Approved insurer shall pay benefit directly to health provider”, which would seem to indicate that all insurers are obliged to do that under the law.

Specifically, here is what section 21(2) says: “Where a compulsorily insured person provides a receipt or other evidence that he has paid the cost of a benefit received by him, an approved insurer shall reimburse such person the cost of or such part of the cost of a benefit as the insurer is liable to pay under the contract.”

In other words, they should reimburse you directly what they owe under your particular health insurance plan if you paid directly and can prove it.

Sadly, that is not the end of the story. As the official pointed out, “The approved insurer is only required to pay the fee (or part of the fee) for the procedure as outlined in the Standard Health Insurance Fees (SHIF).” So if the SHIF is less than your negotiated price, you’ll still end up paying the difference.

“Based on the information provided in the query, we would suggest that the person obtain a statement from the registered healthcare provider confirming that the procedure is medically necessary and include the fee related to the procedure,” the official said. “Once that information is presented to the approved insurer from the healthcare provider, it is anticipated that consideration will be given to the matter by the approved insurer.”

For more details on the claims process, you can read through Section 8 of the Health Insurance Regulations (2017 Revision).

But the upshot is that it does appear that the law provides for a way for you to claim back the cost of the procedure, at least up to the amount the insurance company is required to reimburse you, if you provide a receipt and the procedure was deemed medically necessary.

I would start by sending your insurance company that section of the law and see what they say. If the insurers still refuse to be reasonable, you can file a formal complaint with the HIC. And if you need help with any part of this process, please write again and I will see if I can be of assistance.

And please, do let me know how this works out.

The laws mentioned in this column can be found on the CNS Library


Category: Ask Auntie, Health Insurance Questions

Comments (7)

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  1. Anonymous says:

    I empathise with all those who have been trampled on by the private insurance industry in Cayman. I was diagnosed with cancer and could only be treated off Island, no big surprise. My insurance company refused to cover my costs. Not exactly the news you want to also get on top of a diagnosis that changes your life forever. These thieves and yes I said it, thieves, in the private insurance industry in Cayman can only do what they are allowed to do. Our government was given ample notice of the absolute deplorable state of health care including the insurance aspect of it more than 5 years ago when an agreed plan of action between stakeholders was put into play with a provision to reassess 5 years later. Guess what? Government dropped the ball,it was never implemented despite all the heavy lifting having been done. On the approach of the 5 year assessment period, the Auditor General raised the alarm, a call to action. Guess what? The government ignored it and it is still not a priority item for our ingenious, all knowing, all pompous premier and his bobble head government so people like us who face death from illness that could be prevented are forced to live every day with that reality. Thanks Alden, I hope you never have to face what we face but then again, you won’t because you are insured for life.

  2. Darveson Porter says:

    I was faced with a similar issue. Procedure was 40K. Could not be done locally. Insurance no help. Fortunately my issue was cancer and the CI Cancer Society came to the rescue. They are phenomenal! In the end the hospital and the insurance negotiated and paid 16K. I paid less than 1000.

  3. Anonymous says:

    Dear writer, my situation is similar to yours. Here’s my understanding: Health City charges the government fees schedule for the procedure if one has health insurance. If a patient has no health insurance (eg part of the medical tourism market) there’s a lower cash price for them. Until March, if you had insurance, Health city didn’t bill you for your co-pay, they were content with the fee the insurance company paid. In March Britcay got all agitated about this and insisted that Health City collect the copay from patients. Why? Because other providers were angry that Health City was diverting patients (customers!) Becuase of their lower price. But other insurance companies like Generali don’t make clients pay the copay. All to say this is illogical and unfair. My surgery is next week and my copay is due then. 🙁 I send good wishes and I hope you get this resolved.

  4. Anonymous says:

    And that is exactly why health insurrance should NOT be a privatized business.
    Thanks to politicians like McLean an Eden we have this law. Allowing insurance companies to make huge profits.

    • Anonymous says:

      Which McLean you are referring to? If it is Gilbert McLean you are incorrect, he was the Minister who created Cinico with the intention of it becoming a complete national insurance.hence the name – Cayman Islands national insurance company. Off course the private insurance companies have had a problem with that concept from the get go.

      • Anonymous says:

        It’s about time the Cayman Islands moved to a Nationalised health plan that all residents were obliged to join via deductions from salary for the costs, based on rate of earnings – a health care tax if you like. Then free healthcare would be available to all, paid for from these premiums, at the government health facilities.
        Those who are not earning would be required to take out a private insurance or pay voluntary contributions to the national plan, or for the unemployed etc, their fees would be covered by government benefits. Want to go to a private hospital? Then buy a private insurance or cover those charges over the costs of the government hospital yourself.
        it’s the only way to make healthcare available to everyone, not just the rich.

  5. Anonymous says:

    I was in Jackson Memorial hospital for 3 days. They billed my insurance for $40,000, but ….settled for $16,000. That means that the hospital and my insurance have agreed on $16,000. I didn’t pay anything. GO FIGURE!
    I suggest you read the laws yourself and very carefully. There are always hidden(from you) messages. Have a lawyer friend to give you an advice. Or just google yourself.
    Google has helped me with getting a settlement from a hospital (another story) without involving a lawyer. Lots of time spent researching, yes, lots of writing back and forth, yes, but in the end, I had to sign “not to sue” agreement and collect the money. Doctors must exercise due care, and if they don’t, they must pay for that.