New Company Cuts HMO Red Tape

abbie leibowitz, co-owner Health Advocate CBS

Millions of Americans who use HMOs will find the new year brings more out-of-pocket expenses, and more trouble getting HMOs to cover medical services.

Jean McLenigan's son Jimmy, who uses a medical implant to assist his hearing—needed a new one because his kept breaking.

McLenigan told CBS News Correspondent Wyatt Andrews her son's hearing aid broke more than ten times, prompting trips to the doctor each time.

"If he doesn't have that implant he can't hear anything," she said.

When McLenigan asked her insurance company Aetna for a new device, it said no, ruling the implant could still be repaired, despite its ten breakdowns.

McLenigan called the system typical and bureaucratic, saying Aetna's position was "here's our policy and we are sticking to it."

She decided to seek outside help for her son and contacted a company called Health Advocate, one of handful of cutting edge businesses trying to solve health care hassles.

Employers pay Health Advocate a fee to cut through the red tape of managed care and appeal denials.

Health Advocate employee Ed Hampson convinced Aetna a new device for Jimmy was in fact covered by the policy.

"He met enough of the criteria to definitely get a new one," Hampson said.

One of the reasons Health Advocate is able to jump the hurdles of health care is that its founders not only came from the managed care business -- they helped invent managed care.

Remember when managed care meant gag orders on what doctors could tell you— and endless second-guessing of doctors?

CBS' Andrews interviewed former Aetna medical director Dr. Abbie Liebowitz, who is now the co-owner of Health Advocate for some inside perspective on the health care system:

Andrews: Were you one of the guys enforcing the gag rule? That existed on your watch didnt it?

Leibowitz: It absolutely did.

Andrews: Are you on any level navigating a mess you helped build?

Leibowitz: Yes -- and part of our experience makes us the best qualified group to do that. For better or worse we helped build it.

So now his new company works the other side, on the side of dozens of companies and tens of thousands of workers, sorting through rules he used to make.

Andrews: Now that you sit here what would you do differently?

Leibowitz: I would have trusted physicians more -- to do the right thing for patients.

The right thing for the McLenigans came with mixed feelings -- gratitude that Health Advocate won Jimmy his new equipment -- but frustration at a system so muddled they needed Health Advocate at all.
  • Lauren Johnston

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