Each year U.K. faculty and staff invest both directly and indirectly a substantial amount of money for health insurance. U.K. employees typically make annual direct payments, with after tax dollars, of two to three thousand dollars, and sometimes more, for the health insurance coverage of family members. In addition, as part of our compensation package, U.K. employees annually pay approximately $1,700 a year with pre-tax dollars for our own health insurance coverage.(1)

The cost to the faculty of health care insurance pales in comparison to the need for assurance that the best possible care will be available in times of serious illness or injury and that the stress for the patient and family will not be compounded by access to that care being hampered by administrative roadblocks or unreasonable coverage or payment restrictions.

In November 1997 the U.K. Chapter of the American Association of University Professors surveyed the Lexington and Medical Center campus faculties to obtain a more precise understanding of experience with, problems encountered, and assessment of the University’s current health insurance program. The survey relied on a single mailing to faculty, by campus mail, using a one page questionnaire. Completed questionnaires were promptly returned by 270 faculty members (3). Limited resources precluded starting with a pilot survey or making follow-up mailings or calls. While in hind sight it is apparent that some of the questions could have been asked in a manner that would have produced more precise data, the results of the survey reveal a number of significant strengths and weaknesses of the current program and provide a concrete basis for recommending changes so that the faculty and staff will be better served by our health insurance investment.

In addition to the survey, the AAUP Executive Committee examined some questions that have been raised respecting the impact of the University’s status as employer and as a sovereign entity and how this affects its financial responsibility, and that of its professional staff, toward employees who receive health care at U.K. facilities including situations in which mishaps occur during the course of care giving. The Committee also looked at the lack of coverage for long term part-time employees. This report addresses those issues as well.

1. Choice of Insurance Program

By far the health insurance program most often selected by U.K. faculty who responded is the UK HMO. While no effort was made to ascertain reasons for this choice, its favorable cost and generally more comprehensive coverage would appear to largely account for that decision. Also, as detailed in another section, below, a large portion of the users of U.K. health facilities stated that they are satisfied or very satisfied with the services received.

The percentage of respondents selecting the available health plans was:

2. Receipt of Information Describing the Specific Coverages, Exemptions and Claims Procedures

The majority of faculty report receiving a booklet describing coverages, exemptions and claims procedures since July 1, 1997. The breakdown for the two principal groups was an affirmative answer by 92 % of the HMO subscribers who provided a specific answer to this question and 57% of the Option 2000 subscribers who provided a specific answer to this question. This result is particularly revealing because, as explained below, it reflects the extent to which faculty are unaware of the limitations of the information they actually have received respecting their health benefits coverage.

In May of 1997 U.K. employees were informed that the University was becoming a self-insurer of health care benefits and were sent summary descriptions of the various health insurance plans offered by the University. The employees were then required to elect their health plan coverage from among the described plans, not all of which are available to faculty residing in the Greater Lexington area. The new University operated system went into effect at the beginning of June but detailed information describing the specific coverages, exemptions and claims procedures has not been distributed in any form to those who elected coverage under the Option 2000 plan. Although a summary booklet called the Certificate of Coverage, which in some detail describes the specific coverages and exemptions for the UK HMO plan, has been distributed, the details of that plan’s appeals procedure apparently is separately set forth (see p.49 of the Certificate). That critical document was not available when requested at the U.K. Employee Benefits office and no response has yet been received to a written request, sent to the UK HMO office on December 12, 1997, asking for a copy of the procedure.

Comments and anecdotes appended to the AAUP questionnaire reveal that many faculty are unaware of the drastic reductions and even total denials of reimbursement imposed under the plans available to those residing in the Greater Lexington area when treatment is needed from sources outside the designated managed care provider group. Similarly, many faculty are not made aware of the possibility of shifting to regular Blue Cross/Blue Shield coverage for periods of extended absence from Great Lexington area nor are the rules clear as to the conditions under which that option can be elected. Lack of familiarity with this option is not surprising in light of the fact that recent summaries of plans distributed to the faculty make no reference to it.

3. Information Respecting Approved Pharmacies and Laboratories

The "managed care" strategy that now governs most health insurance plans rejects claims for prescriptions and laboratory expense reimbursement when provided by establishments that are not under contract with the insurer. Therefore, it is critical that patients and their health care providers have up-to-the-minute information respecting the approved laboratories and pharmacies. Because UK HMO laboratory work is handled in-house, the questionnaire would have been more artfully worded if it had separately asked about information pertaining to pharmacies and to laboratories. Thus, there is an ambiguity in the responses from UK HMO users respecting whether they have received a list of acceptable providers. (Some respondents gave the separate answers on their own initiative.) The percentage breakdown of answers by plan category was:

Several respondents with Option 2000 and other plans reported having pharmacy or laboratory charges rejected because the facility was no longer in the managed care group even though the respondent had never been informed of the change. As one respondent writing about an Option 2000 rejection of a laboratory charge wrote: "Stated that lab ... was not approved lab. Odd that it was a U.K.M.C. lab and doctor referral."

4. Faculty and Family Expecting to be Residing Outside the Commonwealth for Two or More Consecutive Weeks

With the exception of the traditional, unpublicized Blue Cross-Blue Shield plan, the health insurance options offered to U.K. employees residing in the Greater Lexington area do not cover non-emergency treatment received outside the respective geographically confined managed care areas. For UK HMO generally this means treatment is only available at the campus facilities. This raises a number of problems and questions. One is who decides and under what criteria and with what opportunities for review, whether a treatment situation constitutes an emergency. Secondly, it poses the problem of how to obtain insurance coverage for situations in which the faculty member or beneficiary will be away from the campus area for an extended period (e.g., on sabbatical leave, on a long vacation, summer field research, a dependent child in college out of state, a dependent child who resides out of state with a divorced ex-spouse). Overall, 58% of faculty members responding to the question reported that they anticipate residing outside of Kentucky for two or more consecutive weeks in the coming year and 33% reported they anticipate similar out of state residence for a family member covered by their U.K. health insurance.

A related problem is encountered when an insured is in need of a treatment modality requiring equipment or expertise not available at U.K. or within the managed care contract group. Several respondents described difficulties encountered in such situations and the considerable stress attached to efforts--some successful, some not--to obtain consent for the deviation so that they would not suffer a substantial financial penalty.

While it appears to be possible to have coverage changed to traditional Blue Cross/Blue Shield insurance in some of the above situations, or to obtain coverage consent from UK HMO, respondents reported receiving conflicting information from the U.K. Employee Benefits office respecting such possibilities and the accounts of different experiences reveal inconsistent handling of these situations under the UK HMO as well as Option 2000. Similar barriers to receiving information about such matters were reported by respondents who made inquiries to the UK HMO office. Response were variously characterized by some respondents as "uncooperative," "surely" and "seemingly incompetent". Reports of difficulties encountered also reveal that appropriate coverage is not available to fit the needs of many faculty and their dependents.

5. Experience with Rejection of Claims

Because the questionnaire failed to ask respondents whether they had made any claims within the period under review (since July 1, 1997--a little less than a five month period), it is not possible to estimate the percentage of claimants who experienced a rejection. The total number of UK HMO respondents reporting having a claim rejected since July 1, 1997 was 16, the number for Option 2000 covered respondents was 9, for Humana covered respondents 9, and for HealthWise covered respondents 2.

A number of Option 2000 respondents reported that although they had reached their $500 deductible during the first half of 1997, claims were rejected each month thereafter on the basis that the deductible had not been reached. Option 2000 appears to have corrected this error only when the insured has gone through the time consuming, stressful steps of protesting on each billing occasion. Such rejections continued throughout 1997. It appears that some, perhaps many, claimants have thrown in the towel and, thus, have not received the reimbursement or coverage for which they have paid.

Another complaint is that U.K. has been slow in submitting charges and Option 2000 has been very slow in processing them. As one respondent put it: "It takes so long to get a bill, I don’t know if anything has been rejected." Another Option 2000 plan user reported having to wait up to a year before some claims were resolved. Respondents with Humana and with Option 2000 coverage also reported that when payments are made often it is only after the claimant is given "a hard time" and that it takes months to resolve appeals of routine items. Option 2000 respondents report that the same type of claim has been accepted when submitted on one occasion and rejected until appealed when submitted on another occasion. A respondent with UK HMO stated: "I have had several charges to my account that when challenged by me were immediately dropped. This doesn’t generate much trust in the billing system." Another UK HMO respondent stated "some of my claims have been lost--some I have had to submit three times." A similar experience was reported by a respondent with Option 2000 coverage.

Inappropriate claims rejections has created considerable stress as well as great cost for some respondents. Below are examples of experiences reported by respondents:

*** Despite treating physician’s request, UK HMO refused to approve MRI in a large patient scanner at a non U.K. Lexington facility even though patient’s claustrophobia required stopping the procedure when using U.K. equipment.

*** UK HMO rejected coverage for emergency treatment received while in Florida.

*** UK HMO rejected coverage where, in an emergency, a friend took a respondent’s child to a non U.K. local E.R.

*** A respondent with Option 2000 reported that some 20 providers were incorrectly told the coverage did not exist.

*** A respondent using Humana reported that after authorizing a new primary care physician because of complaints of difficulty getting an appointment with the one previously assigned, Humana rejected all claims submitted through the new physician.

*** A respondent with HealthWise coverage was refused reimbursement for testing of a dependent child where it was done in Louisville at the recommendation of several doctors in Lexington because no one in Lexington was qualified to do the required diagnosis. Reassurances that payment would be made were later given in 16 phone calls but reimbursement was not received.

*** Following hospitalization, a UK HMO covered respondent was refused an intensive level of rehabilitation treatment even though the patient’s physician wrote a letter stating it was essential.

6. Difficulty Contacting U.K. Benefits Office by Telephone or Getting a Response from the Insurer

Generally, respondents reported that the staff at the U.K. Employee Benefits office is polite and tries to be helpful when reached. However, 50% of those who attempted to reach the office by telephone during the roughly five month period covered by the questionnaire stated that they had difficulty making that contact.

In addition, many of those making such an attempt reported difficulty contacting or receiving responses from the benefits insurer or provider. By plan coverage the portion of responders who made an attempt and reported such difficulties was 44% for those with UK HMO; 62% for those with Option 2000 coverage; 31% for those with Humana coverage; and 11% for those with HealthWise coverage.

7. Assessment of Quality and Availability of Care at U.K. Operated Medical Facilities

Faculty with Option 2000 coverage as well as those with UK HMO often receive care at U.K. facilities. Therefore, the questionnaire asked about quality and availability of care at those facilities. In retrospect, the questionnaire should have asked separately for assessment of quality of care as compared with availability of care. The overall assessment for those with recent use experience, by percentage, as reported by each category of insurance coverage was:

The above summary data does not include those respondents who offered mixed reviews expressing satisfaction with the quality or accessibility of treatment in some departments but not in others.

Some faculty reported great difficulty in getting timely appointments in some departments even though very ill. One respondent reported having to wait three weeks for approval of and an appointment for an MRI examination after it was ordered by a neurosurgeon for a herniated disk. Another reported a similar three week delay in getting an MRI "when I was in a great deal of pain". Others reported unevenness in the quality of care from specialty to specialty, and some reported being denied access to outside specialists even when recommended by their attending physician. Complaints were also received about having to wait for excessive periods in examination rooms, failure to return or long delays in returning phone calls and e-mail messages, and the 800 number ringing and ringing and ringing without being answered. A claimant needing emergency treatment for a broken foot while out of town stated that getting approval took 30 minutes.

Addressing another aspect of the facilities, one respondent commented "clinics dirty, bathrooms dirty *** surely clericals". Another reported "unpleasant service". Another characterized it as "unfriendly".

8. Interest in Medigap Insurance Group

Medigap is an insurance policy that supplements Medicare health insurance. As is generally true with health insurance, group programs typically are less expensive for participants than are individual policies. Retired faculty, spouses of older faculty and parents of faculty are among those who might benefit if the University was to establish a coverage group for this type of insurance. The questionnaire did not inquire into the age of the respondents, a factor that can be expected to affect awareness of and interest in such a program. In total, 16% of the respondents answering the question recorded that they have a parent or a spouse who would be interested in a Medigap insurance program.

For a variety of reasons, U.K. employees and their families in large measure receive medical care for illness and injuries at U.K. operated facilities. Even the best run medical facilities can be hazardous to one’s health because of such factors as the need for constant cleaning of floors, sanitizing of linens and equipment, the quantity and nature of stationary and transportable equipment, and the hazardous nature of many procedures used at such places. Generally, the law provides substantial remedies for those who fall victim to the misfortunes of negligence or malpractice when receiving medical care. However, most U.K. employees probably are unaware of the fact that both because of our status as university employees and the University’s status as an arm of the Commonwealth, recovery for injuries or illness resulting from negligence or malpractice at U.K. medical facilities can be greatly restricted. There is no justification for providing less generous legal remedies for employees receiving medical care at the University’s facilities than those to which they would be entitled if treated elsewhere.

The Kentucky Supreme Court has ruled that because the U.K. Medical Center is an instrumentality of the state government, it is entitled to assert sovereign immunity from tort liability. Withers v. University of Kentucky, 939 S.W. 340 (1997). State law provides a special procedure for claims resulting from negligence caused by state instrumentalities. Such claims must be brought quite promptly and recovery is limited to $100,000 and cannot include damages for mental anguish or pain and suffering. (See. KRS § 44.070 et seq.) The University is expressly permitted to establish a "basic coverage compensation fund" administered by it with limited funding which can be used to satisfy malpractice claims against it. (KRS § 164.939) The effort of the plaintiff in the Withers case to try to avoid the sovereign immunity defense indicates that the recovery provided by the University under § 164.939 is quite limited.

The sovereign immunity defense does not prevent someone injured at U.K. medical facilities from suing the individuals responsible for the negligence or malpractice. A communication from the Medical Center’s counsel indicates that medical malpractice coverage has been obtained to indemnify the professional medical staff from such suits. To that extent, someone who suffered negligence or malpractice caused injury or illness at these facilities should have the same remedies as someone caused the same suffering by a privately operated health care provider. However, the Medical Center counsel’s communication does not indicate that the insurance coverage also includes negligence caused by the Center’s non professional staff (e.g., those responsible for a wet floor, a collapsing table, a maladjusted pressure valve, a mislabeled vial, etc.). Normally, few but the highest paid professional staff have sufficient assets and income to pay for a significant recovery in the event of such mishaps, but the this is overcome because the employer can be held liable for staff negligence. However, in the case of U.K. employed staff, the sovereign immunity defense and limited substitute forms of recovery largely remove that avenue for relief.

There is another potential limitation on the remedies available for U.K. employees who are the victims of negligence or malpractice at a University health care facility. That limitation arises in the situation in which the negligence or malpractice occurs during the course of treating an employee for a work related illness or injury. In order to fully appreciate this limitation of available remedies, it is necessary to review the basic rules of workers’ compensation law. In Kentucky if an injury or illness is work related, an action for recovery is not available against the worker’s employer or fellow employees unless the injury was willful and deliberate. Rather, the injured or ill worker’s only available recovery is through a workers’ compensation claim. That recovery is limited to the cost of medical care and a cash benefit for lost earning capacity. (For a very limited list of extreme injuries, such as loss of a leg, the cash benefit is provided even if lost earning capacity is not shown.) The cash benefit for loss of earning capacity only partially covers the loss--there are time limits for the period for which recovery is received, a cap is placed on recovery based on average earnings in the state, and another cap limits the maximum individual benefit to two-thirds of the employee’s regular pre disability earnings. Under workers’ compensation, no recovery is available for pain and suffering, and punitive damages cannot be recovered. In addition, the formulas for assessing the extent of partial disability under the current KY Act have been criticized as being grossly inadequate.

Because the biggest part of the workers’ compensation protection extends to the medical care, it has been suggested that employees who have medical insurance may be better off electing out of workers’ compensation coverage by notifying the employer in writing of that election, pursuant to KRS § 342.395, especially if the nature of the job confronts the employee with a reasonable prospect of serious injury from work related negligence or malpractice. However, in the case of University employees the benefit of electing that option may prove largely illusory due to the University’s ability to invoke the sovereign immunity defense respecting its liability and the individual’s need to look to the previously described substitute remedies provided by statute. In addition, electing out of workers’ compensation coverage subjects the injured employee to what are called the common law defenses. There is little case law guidance as to how these traditional defenses will be applied by the Kentucky courts under modern tort law notions. Nevertheless, there is cause for employee concern because in the early part of the century those defenses proved a substantial barrier to most employee injury suits inasmuch as they required dismissal if: a) the injury was caused by a fellow employee, b) the injury resulted from a risk inherent in the work situation (deemed an assumed risk), or c) the conduct of the injured worker contributed in any way to the suffered injury or illness.

The very restricted financial protection provided employees under workers compensation law compounds the problems for a U.K. employee who suffers a job related illness or injury because the University, pursuant to KRS § 342.020, has designated its medical treatment facilities as the managed care provider for treating such ailments. Because the medical facilities’ staff, professional as well as non professional, are fellow employees of the University, it can be argued that the Workers’ Compensation statute bars any negligence or malpractice suit against such employees. Moreover, Paragraph (7) of KRS § 342.020 in pertinent part states: "No action shall be brought against any employer subject to this chapter [the Workers’ Compensation Act] by any person to recover damages for malpractice or improper treatment received by any employee from any physician, hospital, or attendant thereof." While that language does not of itself bar a negligence or malpractice suit against a University physician or other employee arising out of treatment for a work related injury, it arguably reinforces a line of authority, having some support in Kentucky, extending the Workers’ Compensation bar to actions against fellow employees who provided medical treatment of work related injuries (4).

Thus, even those employees who have opted for health insurance plans other than UK HMO can find themselves subject to the reduced protection from negligence or malpractice imposed by the doctrine of sovereign immunity as a result of being treated in a U.K. facility. And, in addition, due to the exclusivity doctrine of workers’ compensation law, all U.K. employees who suffer work related injuries or illness can be subject to the further reduction of their available remedies for malpractice or negligence if their work related ailments are treated at U.K. as a result of the University designating that treatment facility.

In work related injury situations there are two possible avenues for preserving an employee’s normal legal remedies if a mishap occurs in the course of receiving medical treatment. First, if beforehand an employee elects in writing to not be covered by the Workers’ Compensation Act, the University is not in a position to designate the treatment facility. The previously noted disadvantage of making that election, however, would greatly reduce the potential benefits of taking that approach and this would be especially true if the employee’s health insurance plan necessitates treatment at a U.K. facility (UK HMO). Second, if the injury or illness requires initial treatment of an emergency nature, the Workers’ Compensation Act can be interpreted to allow the employee to elect to receive that emergency treatment outside of U.K.’s managed health care system and to thereafter remain in the care of that treating physician. However, the statutory language could be interpreted differently and does not clearly prevent the employer from insisting that the follow-up care be at a facility designated by its managed health care provider--i.e., a U.K. facility.

Some departments have programs that rely heavily on part-time instructors or researchers, and aides, many of whom have been employed by the University for an extended number of years. Despite their roles as an integral, vital part of the institution’s missions, they have been excluded from the basic benefits provided other University employees.

1. Health insurance coverage should be made available that is more suitably tailored to the needs of faculty, retirees and their dependents so that they can obtain treatment at distant provider facilities. University faculty and their families are more mobile than most people. With frequency they are away from Central Kentucky for extended periods to conduct research, attend conferences, and visit at other campuses, as well as to stretch their horizons through travel and exploration. Also, many U.K. faculty must cope with the complexities of modern family responsibilities with dependent children sometimes living with former spouses at distant places. In addition, dependent children of U.K. faculty are often attend college or engage in summer activities outside the Commonwealth. Under the circumstances, the present package of health insurance plans, which are designed to principally provide services almost exclusively within the Central Kentucky geographic area, do not meet the health insurance needs of a significant portion of the faculty and their families.

2. The U.K. Benefits Office should take immediate steps to ensure that employees and retirees are provided with complete, accurate, consistent, up-to-date information regarding health insurance benefits options, coverages, exemptions, and claims procedures for all plans.

Footnotes:

1. Although this payment is not a direct deduction from the employee’s pay check, in fact it is part of the cost of compensation that must be taken into account in determining faculty and staff salaries. Hence, it is a substitute for pay and, therefore, as with all "employee benefits" including workers’ compensation coverage, life insurance, and the like, ultimately the cost is paid by the employees.
2. Reflecting the extent of faculty interest in this issue, an additional 29 responses were received after the data was counted. From all appearances, the added data would not significantly alter the reported results.
3. This plan is not listed in the plan summaries distributed to the faculty. We are informed that normally this plan is available only to faculty who will be out of state for an extended period. The lack of consistent, well distributed information respecting this option is covered later in this report.
4. A minority of states interpret their workers’ compensation laws as allowing negligence or malpractice suits to be brought against the plaintiff’s employer or fellow employees where the injury in question resulted from the employer’s activities in a capacity other than as the injured person’s employer. Allowing such suits is know as the "dual capacity" doctrine. A Kentucky appellate court has expressly held that the dual capacity doctrine is not recognized under the Commonwealth’s Workers’ Compensation Act. Borman v. Interlake, Inc., 623 S.W.2d 912 (Ky. App. 1981). There is no reported Kentucky case examining whether the exclusivity of the workers’ compensation remedy applies to negligence or malpractice caused by employees of the same employer when a worker’s job related ailment is treated at the employer’s medical facility. However, the leading treatise authority supports the proposition that such suit should be barred by the workers’ compensation act. Larson, Workers’ Compensation Law § 72.61(b). Recent court decisions in other jurisdiction indicate that judges are closely divided over this issue. E.g., Snyder v. Pocono Medical Center, 690 A.2d 1152 (Pa. 1997). One recent decision can even be read to bar an employee from suing for malpractice caused when the employee receives treatment at the employer’s facility for a non work related ailment. Scott v. Wolf Creek Nuclear Operating Corp., 928 P.2d 109 (Kan. App. 1996). On the other hand, another recent decision allowed a malpractice suit where the physician chosen by the employee selected the employer hospital as the site at which surgery would be performed on the employee for a work related injury. The court indicated, however, that had the employer designated the treatment facility the suit would have been barred. Dalton v. Community General Hospital, 655 N.E.2d 462 (Ill. App. 1995).