Miami Herald: Tackling contentious insurance issues

In the 2010 legislative session, resolving claims faster and simplifying medical billing will be the big issues for Sean Shaw, the state’s insurance consumer advocate.

BY BEATRICE E. GARCIA

Miami Herald–December 29, 2009

As the state insurance consumer advocate, Sean Shaw has a full plate as the 2010 legislative session looms just two months away.

He will present regulators and legislators recommendations to improve the claims process for homeowners and possibly increase supervision for public adjusters. The recommendations are the product of several meetings of the Claims Resolution Roundtable, which Shaw hosted this summer and fall with insurers, contractors, adjusters and consumers.

The group has one more meeting the first week in January and recommendations to legislators have to be ready by the end of January.

He also plans to tackle a contentious healthcare insurance issue that pits doctors against consumers: the practice of out-of-network doctors billing patients for services their medical plans won’t cover. Many consumers, having carefully chosen doctors and hospitals for tests and medical procedures covered by their insurers, are shocked when they receive additional bills for hundreds — sometimes thousands — of dollars.

”This is my No. 1 issue for the upcoming legislative session. This is something that unconscionable. When this happens, it’s just devastating. As you know, these aren’t small bills.”

The practice was banned for doctors and providers in health maintenance organizations. Now Shaw would to bring the same prohibition to physician provider networks. Such a move will require legislation. Shaw says he doesn’t have a sponsor for a bill yet.

Shaw was appointed to his job by Alex Sink, the state’s chief financial officer, in October 2008. It’s his first job in the public sector, but he’s not new to public service.

Shaw draws his inspiration from his father, retired Florida Supreme Court Chief Justice Leander J. Shaw. The elder Shaw was the first African-American to be appointed to the state’s highest court. He also served as an assistant public defender during his career as a public servant.

Before this job, Shaw, who was raised in Tallahassee, worked as an attorney in the Tallahassee firm Messer, Caparello & Self, P.A., where he specialized in employment discrimination defense. He is a graduate of the University of Florida’s law school.

Earlier in December, Shaw talked with the Miami Herald about his agenda for legislators next year.

Q: You headed the claims resolution roundtable. Did the group finalize its recommendations for the legislature?

A: That’s what we’re doing right now. We got a lot of suggestions. We’re trying to separate the doable from the not-doable, the good from the bad.

Some of them don’t require much legislation. Some might require some continuing education for adjusters or contractors. Some may require letting contractors know what is covered by an insurance policy. Others may require letting insurers know how contractors operate in the real world.

But what can benefit from legislation or rulemaking is a uniform [claims] estimation system. I don’t know what it would look like yet, but I believe that is one of the recommendations coming from the roundtable.

We have another meeting coming Jan. 6.

Q: Why was the claims resolution roundtable set up and what is its mission?

A: People were complaining about Wilma claims and how long the process took to get those claims paid. We’re trying to figure out what was going on and how to fix it.

But more often than not, it was a problem of not having the insurance company, the contractor and the homeowner talking together so that the process would go easily. Sometimes the insurance company and the contractor weren’t talking to each other. Sometimes the homeowner and the insurer weren’t talking. It leads to lengthy claims issues and contentious relationships.

Making sure that people know what the process is is a very good, initial first step. We don’t want any unnecessary declines.

A lot of this can be solved through communication — making sure that everyone is on the same page.

Q: Many insurers are calling for increased regulation of public adjusters, saying these adjusters are responsible for most of the re-opened Wilma claims. What’s your take on public adjusters?

A: It’s a very complicated transaction when you have a claim. The public adjuster serve a vital role in helping homeowners navigate through this process.

Insurance companies will argue — and I don’t want to make their argument for them — that public adjusters are responsible for re-opening claims that are invalid or they’re are soliciting in a way that invites fraud.

There are a few bad actors giving the entire public adjusting community a bad name. But you don’t throw the baby out with the bath. We enforce regulations or come up with new ones to take care of the problem. You just don’t say that public adjusters are a bad thing.

Q: What can Florida do to help homeowners with Chinese drywall problems?

A: In Florida, we have to get creative. There’s no one to sue but the Chinese drywall manufacturers. People are being put out of their homes because it’s unhealthy to continue living there. At the same time, they’re being told by their insurers that if they don’t rip out all the affected drywall from their homes, they could be dropped.

This problem has the potential to become even larger.

Q: In October, you sent letters to the state’s largest property insurers, asking them how they’re dealing with drywall damage in the homes they cover. What kind of response did you get?

A: I got generic responses from the insurers. Most said that they are not nonrenewing people because of Chinese drywall. However, the issue is that they will nonrenew people because of a ”material change in risk” due to Chinese drywall. So, while their responses are correct, they might not nonrenew people because of drywall directly, but indirectly, it will happen.

Q: It’s a safe bet the Florida Medical Association isn’t in favor of any curbs on their billing practices. Do you want to just limit balance billing or eliminate the practice entirely?

A: I would like to eliminate balance billing in the PPO context. If I go to a hospital that’s in my network, I would expect everything that happens in that hospital is going to be covered in some way by my insurance company.

Interestingly, statistics show that most of the people who go bankrupt because of medical bills had health insurance. It’s because of this issue. You have insurance, yet you can still get massive insurance bills.

It’s a nationwide controversy. Every state is trying to fix this in some way. But as is always the case here in Tallahassee, there are some people that don’t think it’s a bad thing.

Q: Would you pattern the ban on current regulations that already prohibit balance billing for health maintenance organizations in Florida?

A: In my opinion, the HMO prohibition is not effective.

I have been trying to run down whether any providers have been punished under the law for balance billing and I have been unable to get that information. However, I still receive enough complaints about balance billing in the HMO context to show that something more needs to be done.

Q: Where do the hospitals stand on this issue?

A: I’ve talked to them. They’re part of a group that’s studying possible solutions. Any solution is going to adversely impact doctors.