THURSDAY, JULY 22, 2010
KLMNO
New rules will help public appeal insurers’ decisions
by Phil Galewitz and Michelle Andrews Kaiser Health News
Patients will find it easier to ap- peal the denials of health insur- ance claims under rules being is- sued Thursday by the Obama ad- ministration, which is trying to boost political support for the new health-care law by highlight- ing advantages for consumers. The regulations guarantee con- sumers the right to appeal denials — directly to their insurers and then, if necessary, to external re- view boards. The external-review require- ment will apply, for the first time, to companies that are self-insured — ones that pay their employees’ claims directly rather than buying insurance to cover their workers. “This is huge,” said Sara Rosen-
baum, head of the department of health policy at the George Wash- ington University School of Public Health and Health Services. Most states already guarantee consumers the right to external appeals, though their rules vary widely. Only Alabama, Missis- sippi, Nebraska, and North and South Dakota do not have ex- ternal review laws. “The rules issued today will end
the patchwork of protections that apply to only some plans in some states, and simplify the system for consumers,” according to a White House fact sheet. However, the rules don’t apply
to “grandfathered” plans — those that existed on March 23, when the health law was enacted. Plans can lose their “grandfathered” status if they make significant changes to their plans regarding costs or benefits. Still, by next year, an estimated 31 million people in employer- sponsored plans and 10 million more in individual plans will ben- efit from the new appeals rights, according to the White House. Advocates hope the changes will give consumers a fairer shot at fighting back when their claims are denied. Insurers deny claims for many reasons: They may de- termine that a treatment is not medically necessary, for example, or that it’s experimental. Some- times denials relate to coverage of pre-existing health conditions. America’s Health Insurance Plans, the main health insurance
lobby, supports efforts to create uniformity in the appeals process, said spokesman Robert Zirkel- bach, who has not yet seen the fi- nal rules. “We have encouraged every state to have a third-party review system,” he said.
But appealing insurers’ denials is easier in some states than oth- ers. Many consumers don’t know that they can appeal. “Not enough consumers know this is an option that they have,” said Angel Rob- inson, a consumer advocate in the Iowa Insurance Division. To change that, the administra- tion is providing $30 million in grants to states to strengthen con- sumer assistance offices. Administration officials said
they hope states that do not have an external review system will set up one using the new rules. If they don’t, a federal review system will be set up for them. Under the regulations, states
are “encouraged” to adopt the new standards by July 2011. The new regulations take effect for plan years starting Sept. 23. But they won’t automatically ap- ply to residents in states that have existing external review laws until next July. That’s to give states time to adjust to the new standards. If states fail to change their rules by next July, their residents will then be able to rely on the fed- eral standards. But federal offi- cials are still working out the de- tails of how that would be done. The system can be hard for pa- tients to navigate. When Craig Washington suf- fered a stroke in June 2009, his health plan denied more than $28,000 in claims for the two weeks he was hospitalized in Chi- cago. The insurer said his stroke was due to a preexisting condi- tion, and because he had been un- insured before starting a job that April as executive director of Ro- seland Community Hospital Foundation, the plan denied his claims. Washington lost two ap- peals with his health plan. Now he’s appealing to an inde- pendent state review panel. “It’s exhausting,” he says.
Galewitz and Andrews are reporters for KHN (
www.kaiserhealthnews.org), an editorially independent news service and a program of the Kaiser Family Foundation, a nonpartisan health-care policy organization that is not affiliated with Kaiser Permanente.
INFLUENCE INDUSTRY T.W. Farnam
BP’s changing lobbying sum? It figures. W
hat good is being a multi- national corporation if you don’t know how to
make the most of loopholes in the law? BP filed a lobbying report shortly before the second quarter deadline on Tuesday night, say- ing it spent $1.7 million influenc- ing the government last quarter, an increase of 8 percent from the previous quarter. That’s hardly surprising — but
what’s more notable is the fact that it also reported its first- quarter lobbying decreased by 55 percent. Back in April, when the first-quarter report was due, BP said it had spent $3.5million. On Tuesday, it filed an amendment saying it really only spent $1.6 million. A company spokesman said the reason the figures changed is that one trade association, the Amer- ican Petroleum Institute, revised how it calculated the amount of dues that BP would need to re- port. Corporations and trade as- sociations have always had the option of using an IRS definition of lobbying or one created under the Lobbying Disclosure Act, which requires the filings. “BP has always included in its lobbying disclosure the dollar amounts it pays to trade associa- tions that are attributable to lob- bying,” the company said in a statement. “Beginning in 2010, API provided this figure to BP us- ing a different definition of lob- bying contained in the LDA.” That’s not what the API says.
“We’ve always offered both fig- ures,” a spokesman said. The IRS definition, which is of- ten used by trade associations, in- cludes state-level lobbying and grass-roots lobbying, including expensive television ads and local campaigns. The LDA definition excludes state and grass-roots lobbying but includes a more ex- haustive definition of executive- branch lobbying. The API files its congressional
reports using the LDA definition of lobbying. When API files to the
IRS, it uses the tax-code defini- tion. Member companies can then choose which way they want to report their dues. The IRS defi- nition is almost always more. The disclosure system relies on
good-faith estimates of lobbying expenses, and both definitions are legally correct for BP to use. “It’s possible that they changed it due to the public sensitivity to all their activities at this junc- ture,” said Kenneth Gross, a law- yer with Skadden, Arps, Slate, Meagher & Flom who represents corporations and trade associa- tions on lobbying and political is- sues.
Such a large amendment is far from unusual. A review of a lob- bying disclosure database shows that companies have made amendments of at least $500,000 to a report 50 times since the House and Senate adopted quar- terly reporting in 2008. Sometimes the amendments are clearly meant to fix mistakes, such as when Teach for America amended its third-quarter 2008 filing from $183,624,496 to $183,624.
But other times the amend- ments are less transparent. In April, Royal Dutch Shell amend- ed three separate 2009 quarterly reports. Each was $800,000 and was amended to more than $2 million. A Shell lobbyist for- warded questions to a company spokesman, who did not return the call. Lockheed Martin has made four changes to one report cover- ing the first quarter of 2009. Three days before the April 20, 2009, deadline, it reported $6,350,000 and amended the fig- ure to $6,380,000 a month later, before dropping it to $3,286,000 a month after that. In November it changed it to $3,530,000, and in April of this year, it changed it again to $3,570,000. “In any instance where we needed to make a correction, we filed an amendment to make sure we were as accurate as possible in
our reporting,” said Lockheed spokesman Jeff Adams. The com- pany also decided to change the way it calculated its disclosures.
The U.S. Chamber of Com- merce reported $9.5million in lobbying expenses for the second quarter, down from $25.1million in the previous quarter and $71.2 million in the fourth quar- ter of last year. The decline re- flects the fact that its aggressive campaign on health care was over. In the second quarter, the chamber focused on the financial regulations signed into law Wednesday and a bill regulating campaign finance. In case you were wondering, the chamber uses the IRS method of disclosure that includes the television ads it ran on health care. Several oil companies reported increased activity: Shell Oil in- creased lobbying 76 percent to $4 million and Chevron was up 27 percent to $3.9million. The American Petroleum Institute in- creased lobbying 83 percent to $2.3million. But several electric utilities de- clined, including Southern Co., down 36 percent to $2.3 million, and the industry’s trade associa- tion, Edison Electric Institute, down 30 percent to $2.9million.
The Air Transport Association, which represents U.S. airlines, is getting a new chief executive, ac- cording to a former industry offi- cial. The association’s board has decided not to renew the contract with the current head, former congressman James May, and has formed a search committee. “That is not a subject they have
discussed with Mr. May,” said Da- vid Castelveter, a spokesman for the association.
farnamt@washpost.com
Staff writer Al Kamen contributed to this report.
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FOREIGN POLICY’S JOSH ROGIN 6Highlights from
thecable.foreignpolicy.com
U.S. envoy to Sudan criticizes ICC indictment
As Sudan speeds toward a
January referendum that could lead to the splitting of the country, President Obama’s special envoy is complaining that his job has been made more difficult by new charges leveled against the Sudanese president. Last week, the International Criminal Court issued a second arrest warrant for Sudan’s president, Omar Hassan al-Bashir, this time on three counts of genocide. In March 2009, the ICC had indicted Bashir on five counts of crimes against humanity. The Obama administration has
always said that war criminals should be brought to justice, but at the same time it is pursuing a policy of engagement with Bashir’s government while avoiding direct contact with the Sudanese leader himself. After the ICC’s most recent decision, Obama said he was “fully supportive” of the court. But the president’s point man on Sudan, retired Maj. Gen. J. Scott Gration, said last week that the new charges will have a damaging effect on his ability to work with Bashir’s government. Speaking at the U.S. Commission on International Religious Freedom, he expressed dissatisfaction with the ICC’s latest move. The decision “will make my mission more difficult and challenging, especially if we realize that resolving the crisis in Darfur and [the] south, issues of oil, and combating terrorism at 100 percent, we need Bashir,” Gration was quoted as saying by Radio Sawa, an Arabic-language radio station run by the U.S. government. “Also [regarding] the issues of citizenship and referendum, the north holds a lot of influence, so this is really tough. How will I carry out my duties in this environment?” he reportedly asked. It’s not the first time Gration
has gone off message since he became special envoy. He once likened the administration’s engagement policy toward Khartoum to giving out cookies
and gold stars to children. Last June, ABC News reported that U.S.
J. Scott Gration
Ambassador to the United Nations Susan Rice was “furious” when Gration said that Darfur was experiencing only the
“remnants of
genocide.” The State Department quickly confirmed that its official position is that genocide is ongoing. White House officials have
been trying to make it clear that they support the ICC’s action, regardless of Gration’s complaints.
Senator joins call to oust IG for Afghan rebuilding Sen. Tom Coburn (R-Okla.) on
Wednesday became the second senator to call for the ouster of Arnold Fields, the special inspector general for Afghanistan reconstruction, whose office received a failing grade in a new report on its investigations into the use of billions of dollars of U.S. taxpayer funds. “The recent findings of the independent review of the Special Inspector General for Afghanistan Reconstruction (SIGAR) are appalling and confirm that there is clearly a lack of competent senior leadership in this agency,” Coburn said in a statement. “Fraud, corruption and wasted resources are placing our soldiers and the mission in Afghanistan
New leader for CIA unit
CIA Director Leon E. Panetta names John D. Bennett, a CIA veteran who served as station chief in Pakistan, to head the agency’s National Clandestine Service. Federal Worker, B3
ASHRAF SHAZLY/AFP/GETTY IMAGES
The White House has been trying to work with Sudan’s government without directly engaging President Omar al-Bashir, above.
in danger.” Earlier this week, the Council
of Inspectors General on Integrity and Efficiency, which serves as an oversight board of all inspectors general in the U.S. government, issued a scathing report on the work of SIGAR, which came after months of congressional angst over what certain lawmakers see as the organization’s shoddy work. Coburn had requested the
review, along with Sens. Claire McCaskill (D-Mo.) and Susan Collins (R-Maine). McCaskill called for Fields to be fired on the day the report was issued.
Her first tour was pretty tough, too Maura Connelly, the president’s nominee for ambassador to Lebanon, has taken a long journey in her career as a Foreign Service officer. Her
tours have included Algeria, Damascus, Jerusalem, Jordan, London, South Africa, and Washington, where she now serves as deputy assistant secretary in the bureau of Near Eastern affairs. At her confirmation hearing
Tuesday, we learned that her career in government service began when she was a Senate page during high school; she then worked as an elevator operator in the Capitol building while an undergrad at Georgetown. But Sen. Robert Menendez
(D-N.J.) highlighted her childhood experience in the rough-and-tumble suburbs of northern New Jersey as another asset she can bring to bear when she gets to Beirut. “Anyone who was born in
Jersey City, New Jersey, could probably do very well in Lebanon,” Menendez said.
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