Anorexic Denied Coverage Under Health Plan's "Three-Day Rule"

From the *Hartford Courant*:

Anorexic Denied Coverage Under Health Plan's "Three-Day Rule"
By Diane Levick
Courant Staff Writer

Young Kathryn Laudadio, already battling anorexia and various mental
disorders, now has another demon crushing her -- guilt that her parents
had to pay thousands for a treatment program last summer because
insurance wouldn't cover it.

Kathryn, 17, entered the residential program after losing 10 pounds in
three weeks and then running 80 minutes on a very hot day until she
collapsed. She ended up in Bridgeport Hospital's emergency room with an
abnormal heart rhythm. Doctors wanted her in the program for eating
disorders, and her insurance covers such treatment under certain conditions.

The denial -- which is still being challenged -- is especially aggravating
to Kathryn and her mother, Lisa Gfeller, of Fairfield, because they won
an independent appeal against Anthem Blue Cross and Blue Shield that was
supposed to be binding but hasn't been enforced.

Insurance fights over the "not medically necessary" refrain are common,
but Kathryn's case centers on a different rule. It exposes a troublesome
crack in the health care system, involving a state law that can be hard
to comply with because of Connecticut's shortage of hospital beds for
young mental health patients.

The rule in Gfeller's health plan is patterned on state law. The law
says insurance doesn't have to pay for residential treatment of mental
illness for children and adolescents unless the treatment starts
immediately after a hospitalization of at least three days for the illness.

Doctors wanted to hospitalize Kathryn the day she was taken by ambulance
to Bridgeport Hospital, but a psychiatric bed couldn't be found.

That insurance Catch-22 has happened to other patients around the state
too, consumer advocates say. The three-day rule prevents some young
patients from getting residential treatment, a live-in program that's
less intensive than hospitalization. Parents who take on the financial
burden themselves may not be able to afford enough treatment, raising
the chances of patient relapse.

The three-day rule cost Kathryn's parents $13,420 that they had expected
insurance to pay toward her stay in the Renfrew Center of Philadelphia,
a live-in treatment center that specializes in eating disorders.

Gfeller had to take out a second mortgage because the 24-day stay cost
more than $16,000, and Kathryn's anguish about the expense isn't making
her recovery any easier.

"That has followed me to this day," said Kathryn, a 5-foot-2, 98-pound
high school senior with a coif of dark ringlets. "I feel like I have
cost way too much, and it's this horrible guilt."

Her mother has told her not to worry about family finances, knowing
Kathryn has enough to deal with. The teen has been diagnosed with
borderline personality disorder, obsessive-compulsive disorder, and
bipolar illness, which involves cycling between depressed and manic
periods. Two of Kathryn's aunts were bipolar and committed suicide,
Gfeller said.

Kathryn, in her fifth year of anorexia, has threatened suicide from time
to time. She said that last June "my goal was to die by Christmas. I had
it all mapped out. I realized the only thing I could do was starve."

Kathryn has also mutilated herself, using manicure scissors, a razor,
and broken glass on various occasions, once even carving the word "vain"
into an arm, Gfeller says.

Three Appeals

Gfeller says she didn't know about the three-day rule until the Renfrew
center heard from Anthem the day before Kathryn was to enter the
facility. Gfeller checked her in anyway because she believed her
daughter's life was at risk and figured she would appeal the denial later.

The mother and daughter have been through three levels of insurance
appeals over the Renfrew stay in Philadelphia, and over a subsequent
"partial hospitalization" at Renfrew's center in Wilton. That was day
treatment, with Kathryn returning home for the evening.

Gfeller is a clerk in the assessor's office in the town of Fairfield,
and her insurance is the town's self-funded plan. The plan takes on the
financial risk of claims itself and hires Anthem to administer the plan,
which includes processing claims and handling appeals.

Anthem claimed the Renfrew day treatment in Wilton wasn't medically
necessary, but denied the Renfrew Philadelphia program solely on the
basis of the three-day rule.

Gfeller lost two appeals to Anthem, despite help at a hearing from the
attorney general's office and the Office of the Healthcare Advocate.
Then she appealed to an independent firm in an "external review"
available to many consumers through the Connecticut Insurance
Department. She won.

The independent reviewer, the Maximus Center for Health Dispute
Resolution, said the residential and day treatment were both medically
necessary, and in a Feb. 1 letter reversed Anthem's denials. Anthem has
paid what it owed for the day treatment in Wilton, but nothing for the
Philadelphia stay.

Gfeller says Anthem has been "cowardly" by "hanging their hat on an
obsolete and ridiculous rule."

Anthem believes the matter of the Philadelphia treatment should never
have been accepted for external review, which by law is supposed to
handle only questions of medical necessity, said Beth Cook, counsel at
the Connecticut Insurance Department.

The department agrees with Anthem because the denial wasn't based on
medical necessity. Even if it had been, a finding of medical necessity
can't override rules and limitations written into an insurance contract,
such as the three-day rule, Cook says.

A Rule Under Fire

Complying with the rule isn't always possible.

"There is a terrible shortage of inpatient hospital beds for children
and adolescents in the state of Connecticut" that creates back-ups in
emergency rooms, says Dr. Harold I. Schwartz, psychiatrist-in-chief at
Hartford Hospital's Institute of Living. Cook says she's aware of the
shortage, but the statute grants no exemption for that in the three-day
rule. And the Insurance Department has no jurisdiction over self-funded
health plans. However, Fairfield, which can specify what its self-funded
plan can or can't cover, has the power to make an exception to its plan.

So the Insurance Department has asked Anthem to see whether Fairfield
might do so in the Laudadio matter.

Anthem issued a statement last week to The Courant explaining how the
three-day rule had not been met, and which said the company "is
currently working with the Town of Fairfield to review this matter."

Attorney General Richard Blumenthal's office has been in talks with
Richard Saxl, town attorney of Fairfield.

As of Friday, Fairfield hadn't made a decision. Saxl says he's been
doing some fact-finding.

"In the town of Fairfield, we do things the right way," Saxl said. If we
owe [Gfeller] the money, she's absolutely going to get paid."

The attorney general's office, interpreting the law on external reviews
differently from the Insurance Department, believes the reviewer's
decision on the Philadelphia treatment must be enforced and Fairfield
must pay up.

Anthem operates the network of health care providers for Fairfield's
plan and had a responsibility to make sure that network would have
psychiatric beds available, said Attorney General Richard Blumenthal.

Meanwhile, he's supporting repeal of the three-day rule, which he calls
"short-sighted and unwise and unfair." He and state Healthcare Advocate
Kevin Lembo testified at a public hearing in February in favor of Senate
Bill 278, which would ax the rule and revise the pre-conditions for
getting residential treatment.

The bill was never brought to a vote in the insurance and real estate
committee. Sen. Joseph J. Crisco, D- Woodbridge, a co-chairman of the
panel, says there was testimony that the three-day rule ensured that a
patient's condition could be thoroughly and professionally evaluated in
a hospital setting.

The committee has approved many bills augmenting insurance coverage, and
should not be held responsible for the public health issue of hospital
bed shortages, Crisco said.

"It's unfair to burden the insurance committee with the blame," he said.

Blumenthal and Lembo's office are still hoping the General Assembly will
address the residential treatment issue in its current session.

Meanwhile, Kathryn, a drama enthusiast who has written a play about
pressures on people, feels she has been relapsing since mid-December. At
98 pounds, which is below the minimum 100 that doctors set for her, she
said she feels "like a whale." She thinks she may need residential
treatment again and calls the Renfrew experience "amazing" but is
anxious about insurance rules and cost.

After what Kathryn has been through, she offers the insurance industry a
piece of her mind.

"If someone needs help, give it to them," she says. "Because people
don't ask for help if they don't need it. Trust me."