Idaho insurer changes rules on who can pay your premiums

Colin Smith had so much pain in his hip that he stopped working as a residential contractor two years ago, soon after he moved to Idaho from California. Smith eventually learned the pain was due to a large tumor in his pelvis. He had multiple myeloma, a type of cancer that forms in plasma cells. The cancer, at one point, progressed into his neck and broke it.

Smith, who is 60 and lives in Kuna, first tried two rounds of radiation treatments. When the cancer showed up again, he underwent a stem-cell transplant last August at St. Luke’s Boise Medical Center.

The transplant went well. What followed the transplant, though, was a confounding problem with insurance coverage that has delayed by two weeks the medication Smith’s doctor says he needs to prolong his life and make the transplant worthwhile.

Smith is insured by Blue Cross of Idaho, with a plan he bought on the Idaho health exchange. The plan costs him about $30 a month — after an Affordable Care Act tax subsidy of about $500 a month, because Smith’s only income is Social Security disability payments.

Smith turned to two nonprofits to help cover the cost of Revlimid, a drug that helps bone marrow produce healthy blood cells and kills abnormal cells. The Patient Access Network, based in Washington, D.C., and Good Days from CDF, based in Texas, help patients pay for medications for certain diseases. They provided $10,000 each for Smith’s medication, enough to cover the January and February doses, according to Smith’s records.

January’s costs alone should have pushed Smith’s 2016 expenses well beyond the $6,550 maximum his plan required him to pay for the year. The insurance company should have picked up his costs, at that point, for the rest of 2016.

But in the second week of March, the pharmacy that fills Smith’s prescription said it would not be sending him March’s supply.

Smith’s friend and caretaker, Lavona Husted, called Blue Cross of Idaho. She was told that the nonprofits’ assistance did not count toward meeting his out-of-pocket requirements because the money came from someone else.

A patient financial advocate who works for St. Luke’s Mountain States Tumor Institute in Meridian reached out to Blue Cross on Smith’s behalf. She heard the same thing.

“We both called, we both got the same information,” said the advocate, Angie Williams, whose job often entails finding charities to cover patients’ cancer treatment bills. “They said the policy specifically spells out” that money a patient receives from a foundation does not count toward out-of-pocket responsibility.

Blue Cross said at the time that Smith must pay $6,500 if he wants to continue receiving the medication. He said he did not have that.

“In the five years I’ve been here, this is the first time this has occurred,” said Smith’s doctor, Silvana Bucur, a medical oncologist at MSTI in Meridian. “We have had patients who go to these organizations to pay their copay because they’re very expensive, these drugs, and the copays are in the thousands of dollars. ... Once it’s paid, no matter what the source is, [the insurance companies] take it as paid, and that’s it.”

NO THIRD PARTIES ALLOWED

Nonprofits have existed for many years to help patients with expensive-to-treat diseases. Some give patients a hand with travel and lodging. Some help pay insurance premiums. Some help with out-of-pocket costs such as copays and deductibles.

About a year ago, Blue Cross joined other insurers in the U.S. to say that patients could no longer rely on organizations for help with their insurance premiums, but the policy does not specifically exclude payments from foundations or other nonprofits.

The policy change, according to Blue Cross, mimics recent federal guidance. The U.S. Department of Health and Human Services said in 2013 and 2014 that when it comes to health plans sold on exchanges, hospitals and health care companies should not be allowed to cover premiums for patients.

The department said in 2013 that it “has significant concerns with this practice, because it could skew the insurance risk pool and create an unlevel field in the marketplaces.” Nonprofit foundations were not a concern, it said in 2014.

Blue Cross of Idaho spokesman Josh Jordan said the company has taken it a step further, including even nonprofits in that ban. Some nonprofits, he said, are funded by health care businesses that have a financial interest in bringing in patients — a relationship Blue Cross sees as problematic.

“Obviously, if it’s a benevolent foundation or something like that, we want to provide those avenues,” Jordan said.

But the company is still trying to define what counts as a “benevolent” organization, he said.

For example, Blue Cross would not allow premium assistance from a foundation that gets almost all of its funding from a single health care provider.

“If I’m going to donate $500 million over the course of five to six years to a [nonprofit] corporation, that is then directing business to me that I’m going to make a billion dollars off of, that’s a pretty slippery slope,” Jordan said. “We’re looking for ... shell games going on whereby there are organizations that exist to steer services to certain providers.”

Jordan said the nonprofits that paid for Smith’s medication are not what Blue Cross considers “shell games.”

The majority of funding for the Patient Access Network comes from pharmaceutical companies, according to its website. Good Days receives funding from “a number of sources in and outside of the health care industry, including corporate and individual contributors,” its website says. Charities are not required to disclose their donors.

BLUE CROSS DENIAL A MISTAKE

Shortly after learning of the Blue Cross decision in early March, Husted filed a complaint on Smith’s behalf with the Idaho Department of Insurance. She called the Idaho Statesman on March 18.

Williams, the patient advocate at St. Luke’s MSTI, said she checked March 21 and saw that Blue Cross had recorded Smith paying only $13 toward his $6,500 out-of-pocket responsibility.

The Statesman contacted Blue Cross on March 23 and March 24, asking about Smith’s case. The morning of March 24, Williams checked on Smith’s Blue Cross file and determined that the insurer now said Smith had met his out-of-pocket responsibility.

Jordan, the Blue Cross spokesman, said the Department of Insurance complaint triggered a review of Smith’s case.

“We looked at it and said, ‘Oh, no, this needs to be applied,’” Jordan said. “What I don’t know is exactly why it wasn’t applied at the beginning.”

Husted wonders whether Blue Cross will now reimburse the foundation that paid for Smith’s drugs in February, since his January costs alone surpassed the threshold for insurance to start paying all his bills.

Jordan said Blue Cross is fully behind Smith getting his medication — which cost $10,641 for a month’s treatment, as of January — and that it will pay for it.

Smith continued to wait for his medication on Monday. Why? Blue Cross had green-lighted the prescription coverage. But his pharmacy said the insurance company’s approval for drug coverage had expired in mid-March. Blue Cross said the pharmacy was wrong.

The medication arrived at Smith’s doorstep on Tuesday.

This story was originally published March 29, 2016 at 11:09 PM with the headline "Idaho insurer changes rules on who can pay your premiums."