Coalition bashes insurance chief’s take on cost-sharing limits

AUGUSTA – The state’s largest consumer health coalition has called on the state’s chief insurance regulator to reverse a decision it claims allows health insurance companies to charge more for health care services.

Consumers for Affordable Health Care, in a press release sent to area news agencies Thursday night, criticized Alessandro Iuppa, superintendent of the Maine Bureau of Insurance, for his recent interpretation of a law concerning cost-sharing limitations.

The consumer group alleges that the law, originally intended to prohibit higher charges, allows insurance companies to force a consumer to make co-payments of more than 50 percent of a provider’s charge in some cases.

For example, under the new interpretation, a consumer would be required to pay a $25 co-payment for a $34 office procedure. The payment would have been limited to 50 percent of the charge, or $17, under the previous interpretation.

Similarly, a consumer would be required to pay a $250 co-payment for a $300 outpatient hospital procedure, while the previous interpretation would have limited the payment to 50 percent of the charge, or $150.

Debate has arisen among the consumer group, health insurance companies and the bureau itself over the rule’s wording, specifically, whether co-insurance and co-payments should be considered together in the 50 percent payment limitation.

The rule says that outpatient procedures are “subject to co-insurance not greater than 50 percent of eligible charges, or a combination of coinsurance and co-payments that results in cost sharing not greater than 50 percent. Co-payments may not exceed $250 per day for all of the combined services related to the surgery.”

In a letter mailed to Iuppa Thursday, the consumer group further criticizes the superintendent for changing the interpretation of the rule without providing the public notice or an opportunity to comment. A copy of the letter was faxed to area media outlets Thursday night and the superintendent’s office was not available for comment.

“These back-room deals must stop. When such decisions affect important health insurance policy, they should take place in public,” the letter stated.

The new interpretation of the law was determined after a private meeting between Iuppa and the Maine Association of Health Plans in May, Iuppa said in a Sept. 5 letter to Richmond attorney Alice Knapp. Knapp wrote to Iuppa in July requesting to be informed of any complaints or enforcement action taken by the Maine Bureau of Insurance regarding the new interpretation of the law.

On behalf of the state’s HMOs, the health care organization contacted Iuppa’s office in March after discrepancies arose between their interpretation of the law and the bureau’s. The association considered coinsurance and co-payments separately when figuring the 50 percent limitation, while the bureau considered them jointly.

The bureau’s current interpretation separates the coinsurance and co-payment guidelines when determining the limitation.

“This interpretation is consistent with the intent of the rule,” Iuppa stated in a July 1 letter to Katherine Pelletreau, executive director of the Maine Association of Health Plans. “Further, this interpretation is reasonable and fair to consumers. The premiums consumers have paid for their policies were based on this interpretation of the rule, the co-payments were set at levels consumers agreed to, and consumers have received fair value for their premium dollar.”