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Post date: August 9 2004

Billing Errors And Denial Of Care Or Coverage Top List Of Consumer Health Care Complaints

Attorney General Spitzer today released a report outlining the top consumer complaints about health care in New York State.

The 2003 Health Care Helpline Report was compiled from nearly 7,800 complaints received by the Attorney General's Health Care Bureau through its toll-free helpline during a twelve-month period between July 2002 and June 2003. It analyzes those health care-related complaints investigated by the office and issues proposed reforms to address systemic problems.

"The report indicates that too many consumers need assistance when navigating the complex world of health care and in protecting their rights," Spitzer said. "This report also demonstrates that consumers from across the state would be well served with full financial support for the Managed Consumer Assistance Program enacted in 1996 to help individuals gain information about and access to health care."

At least one-forth of all consumer complaints to Spitzer's Health Care Bureau arose from health plan or provider mistakes in claims preparation, processing and payment, and almost two-thirds of those mistakes are attributable to health plans. These types of complaints have remained the most common health care complaint since at least 2001.

Access to specialty care and out-of-network providers accounted for nearly 22 percent of all consumer complaints, making it the second most-common complaint.

The report highlights two noteworthy trends in 2003 Helpline complaints as compared to complaints analyzed in the 2002 report:

  • Denials of care or coverage by health plans decreased from 23.2% to 17.4% of complaints; and
  • Denials of emergency care by health plans declined from 1.2% to 0.6% of complaints.

While observing these trends, the report notes that its sample size is limited and that the 2003 Helpline report covers a 12-month period compared to the 18-month period covered by the 2002 report.

In assisting individuals in addressing their health care complaints, Spitzer's office was able to recover $3.9 million in additional care or coverage for consumers in 2003. Through enforcement actions, the Health Care Bureau generated an additional $862,000 in restitution for New Yorkers and $344,500 in costs and penalties to the state.

The report also contains recommendations to improve consumer access and satisfaction with the state's health care system by:

  • Mandating use of a model claim denial notice by all health plans to address inadequate and confusing denial notices;
  • Fully funding New York's Managed Care Consumer Assistance Program to ameliorate widespread consumer confusion and consumers' frequent inability to protect their rights and access benefits;
  • Providing statutory penalties for violations to better address non-compliance by health care plans and providers with the Managed Care Consumer Bill of Rights, which provides managed care consumers with rights to certain coverage information, appeal and grievance processes and other protections.

Consumers who want to file a complaint about their health coverage or who are looking for assistance with regard to their health care plans or in obtaining health care coverage are encouraged to contact the Attorney General's helpline at (800) 771-7755, option 3.

To obtain a copy of the Health Care Bureau's 2003 Health Care Helpline Report, individuals are directed to visit the Attorney General's website at

Significant Health Care Cases in 2003

The Health Care Bureau protects - and advocates - for the rights of all health care consumers statewide. The Bureau operates a toll-free Health Care Helpline that assists New Yorkers with individual problems; investigates and takes law enforcement actions to address systemic problems in the operation of the health care system; and proposes legislation to enhance health care quality and availability in New York State. In addition to the Health Care Bureau's efforts, the Attorney General's Antitrust Bureau and Consumer Frauds and Protection Bureau also investigate and commence law enforcement actions to protect the interests of New Yorkers in this area.

Taxol case: A settlement was reached in April 2003 with Bristol-Myers Squibb in a federal antitrust lawsuit involving Taxol, a cancer-fighting drug. The lawsuit, filed by all 50 states in 2002, alleged that the drub manufacturer unlawfully blocked less expensive generic drugs from entering the marketplace. New York consumers, state hospitals and other state purchasers of Taxol shared in a $55 million settlement. The settlement agreement contains strong injunctive relief which prevents Bristol Myers-Squibb from engaging in future anti-competitive conduct. Bristol-Myers Squibb has further agreed to provide free quantities of Taxol to DEA-approved health care facilities, which will make the drug available to individuals who meet certain eligibility requirements.

BuSpar case A final settlement was reached in March 2003 with Bristol-Myers Squibb Co., Watson Pharma, Inc. and Danbury Parmacal, Inc. to provide users of the anti-anxiety medication BuSpar hundreds of dollars in compensation. New York State led xx states in 2001 lawsuit against Bristol alleging that it illegally maintained its monopoly over BuSpar by misleadingly claiming that a newly obtained patent covered the drug, and by agreeing with certain drug manufacturers to delay the entry of lower-cost substitutes.

The final settlement provided a $41 million consumer fund and barred Bristol from: engaging in anti-competitive conduct in the future; attempting to re-list the patent; listing certain other types of patents in the Orange Book, if the patents would unreasonably delay generic entry; and entering into agreements with generic manufacturers to settle patent infringement suits if the result could adversely affect competition.

GlaxoSmithKline, Pharmacia and Aventis: A lawsuit filed in February 2003 charging three of the nation's leading pharmaceutical companies with consumer fraud in conducting an elaborate illegal scheme to inflate the price of prescription drugs for consumers and government health plans.

The companies are alleged to have reported an inflated average wholesale price in relation to the price charged to doctors, pharmacists and other health care providers. According to the lawsuit, the companies exploited this "spread" to market their drugs, improperly inducing doctors to prescribe drugs and thereby increase companies' market share. As a result of the inflated prices, government health plans and consumers nationwide have overpaid for drugs.

Aventis and Andrx (Cardizem): A landmark agreement of antitrust charges was obtained in January 2003 that settled accusations that the two drug companies conspired to keep a generic version of a widely used blood pressure medication off the market. Aventis and Andrx agreed to pay $80 million to compensate consumers, state agencies, and insurance companies who overpaid for Cardizem CD and its generic equivalents.

The case, co-led by New York and Michigan, along with the attorneys general of 27 other states and commonwealths, charged that for a year beginning in July 1998, Hoechst, a pharmaceutical company acquired by Aventis in 2000, paid Andrx just under $100 million not to market a generic version of Cardizem CD. The delay in the availability of the generic form of Cardizem CD meant that consumers, medical insurance companies and the government were forced to purchase the higher priced brand name version of the drug for at least an extra year.

Pfizer, Inc. (Zithromax): A settlement was reached in January 2003 resolving allegations of misleading advertising of a best-selling antibiotic. Pfizer, Inc., headquartered in New York City, entered into an agreement with Spitzer and the attorneys general of 18 other states, and promised to reform its advertising and promotional materials for one of its key pharmaceutical products, Zithromax.

It was alleged that the advertisements misrepresented the efficacy of Zithromax in comparison to other antibiotics used to treat ear infections among young children. Specifically, the attorneys general alleged that by focusing its advertising for Zithromax on dosing convenience - fewer doses per day and fewer days on the medication - Pfizer falsely implied that the medication was superior to other antibiotics. Pfizer also failed to disclose that physicians take into account other factors, such as antibiotic resistance when prescribing a treatment for ear infections.

Health Insurance Plan of Greater New York (HIP) and Health Net of the Northeast In resolving consumer complaints, it was determined that the Health Insurance Plan of Greater New York (HIP) had improperly terminated and Health Net of the Northeast had threatened to improperly terminate the individual health insurance policies of members when they reached age 65 and allegedly became eligible for Medicare even though federal and state law allowed members to renew these policies at their option. Settlement agreements signed with both plans provide for reinstatement and other restitution to affected members.

Quest Diagnostics, Inc. The nation's largest diagnostic laboratory settled an investigation into the improper "balance billing" of consumers. After receiving complaints from consumers, Spitzer's office found that Quest was improperly balance billing consumers by billing them for the entire balance of the bill when it had submitted a claim to the consumer's health plan but received no response from the plan. Quest agreed to cease billing consumers in this situation and to provide restitution to consumers who were improperly billed in the past.