1. Expertise As to HMO, PPO, and POS Health Plans and Plan Providers and Their Agents and Brokers.
In addition to traditional health insurance companies and policies, three prominent categories of other entities and plans are prevalent in the U.S. health care delivery system as set out below. I have significant experience as to each of these organizations.
Health Maintenance Organizations (“HMO”) are a type of managed care organization (“MCO”) that provides a form of health care coverage in the United States that is fulfilled through hospitals, doctors, and other providers with which the HMO has a contract.
Preferred Provider Organizations (“PPO”) are a type of organization that provides health care services for insured members through a network of health care providers (i.e., “preferred providers”).
A Point of Service (“POS”) plan uses a network of contracted participating physicians to provide health care to insured members. These three entities are sometimes collectively referred to here as “health plans” and their providers as “plan providers”.
A. HMOs, PPOs, POSs: Health Plans and Plan Provider Expertise as an Insurance Regulator. I have had extensive and substantive experience relating directly to plan providers and plans (including those offered by traditional insurers and PPOs, HMOs, and POSs) including determining plan providers’ obligations under such plans. As a regulator, I approved the formation and authorization to conduct business and oversaw such entities on a daily basis including HMO, PPO, POS and other similar health related organizations.
As a regulator for eight years in three positions ((i) Assistant Attorney General assigned to the Department of Insurance (Iowa), (ii) First Deputy Commissioner of Insurance and (iii) Commissioner of Insurance), along with my staff, I approved (or disapproved) of the language of health plans used by each of the 500 or so health insurance companies and HMOs, PPOs and POSs doing business in the state. This regulatory action also included the approval of policy application forms as well. In addition, I regularly served as an Administrative Law Judge in matters relating directly to HMOs, PPOs and POSs health insurance policies and plans.
B. HMOs, PPOs, POSs: Health Plan and Plan Provider Expertise: NAIC. While Commissioner, I also served as a member of the National Association of Insurance Commissioners (“NAIC”), (including membership on its Executive Committee), the nationwide organization of all state insurance commissioners. That organization has responsibilities for establishing model insurance administrative regulations and model statutes for consideration by all of the states. While with the NAIC, I served, among other things, as:
- Chair of the Life Insurance Committee. The charge of this Committee was oversight of all issues relating to life and health insurance products as well as life and health insurers, with many of those health insurers providing products through or together with HMOs, PPOs and POSs;
- Chair of the Universal Life Insurance Task Force. The charge of this Committee was oversight over universal life and similar products; and
- Chair of the Life Insurance Product Development Task Force. While Chairman of this Task Force, I led the development of model disclosure statements for universal and indeterminate premium life products designed to assist consumers in their comparison of different types of life insurance products.
C. HMOs, PPOs, POSs: Health Plan and Plan Provider Expertise: American Academy of Actuaries. Along these same lines, I served as General Counsel and chief lobbyist to the American Academy of Actuaries, Washington, D.C. The Academy is the national professional association for actuaries. These professionals establish premium levels for plans and plan providers.
D. HMOs, PPOs, POSs: Health Plan and Plan Provider Expertise: CEO of A Major US Insurance Entity. After serving as a regulator, I served as President and Chief Executive Officer for the National Council on Compensation Insurance (“NCCI”), a nationwide industry owned organization with about 1,500 employees with annual revenues of about $150 million that did (and does) business in about 40 states. NCCI was domiciled in Florida and did business throughout the U.S.
This means that while I was CEO, NCCI was subject to the full authority of the various state Departments of Insurance (“DOIs”) and subject as well to the various state Insurance Codes as well as the jurisdiction of all state and federal courts.
Among my responsibilities at NCCI was (together with my staff) to formulate all workers compensation insurance policy forms as used in our 40 states of operation. This work included drafting all policy language (tailored to the specific state’s insurance code) as well as drafting all endorsements and all other policy forms. In addition, my responsibilities included gaining state insurance department approval of all such policy forms as a condition precedent to their use as submitted by some 600 insurance companies. I know policy forms and obligations of the entities (including HMOs, PPOs and POSs) offering such plans.
HMOs, PPOs, POSs: Health Benefits: NCCI. The health benefits under workers compensation are pivotal coverages and those health benefits are provided by an array of health plans. I am very familiar with the meaning and relevance of specific health plans, policy forms, endorsements and applications and related documents and matters.
E. HMOs, PPOs, POSs : Health Plan and Plan Provider Expertise: Reinsurance Arbitrator. I am also one of about 400+ certified reinsurance arbitrators (by ARIAS-US) and have sat as an arbitrator on health plan issues in disputes between reinsurers and their insurers.
2. HMOs, PPOs, POSs: Expertise as to Duties of Health Plans and Plan Providers.
A. HMOs, PPOs, POSs: Expertise as to Duties of Health Plans and Plan Providers as Commissioner of Insurance. I have also had significant experience and responsibility in connection with determining and passing judgment on health plan and health plan providers’ responsibilities as to applicants, insureds, owners and beneficiaries and brokers. In particular, in my three regulatory positions previously described, I had daily responsibility to assure and to hold accountable all of the state’s 500 health insurers and HMO, PPO and POS plan providers for their related obligations. I did so through a series of action steps and tools. The action steps and tools included the following:
1. HMOs, PPOs, POSs : NAIC Market Regulation Handbook. As Commissioner, I had as an available tool, the NAIC Market Regulation Handbook (“Examiners Handbook” or “Handbook”). Among other things, this Handbook sets forth standards to assess health plan and health plan providers behavior relating to: (i) policy application; (ii) policy issuance; and (iii) responsibilities relating to brokers and their clients/insureds. The Handbook is used by every department of insurance in the United States. The standards have been universally agreed to by all of the nation’s Commissioners of Insurance as adopted formally by them through the NAIC. The standards of the Handbook are universally recognized as appropriate standards against which to judge health plans and health plan provider behavior.
2. HMOs, PPOs, POSs: Market Conduct Examinations. On a regular basis, my regulatory agency conducted Market Conduct Examinations of health plans and health plan providers utilizing the Examiners Handbook to determine whether in fact the target plan provider was meeting all of their obligations to their insureds and others. This action entailed physically going into the plan providers’ application and policy issuance files to determine any errant action or inappropriate policy behavior. As further discussed below, errant plan providers were warned, disciplined and prosecuted as required.
3. HMOs, PPOs, POSs: NAIC Financial Examiners Handbook. As Commissioner, I had available another tool, namely the NAIC Financial Examiners Handbook (“Financial Examiners Handbook”). Among other things, the Financial Examiners Handbook sets forth standards to assess health plan provider solvency on a triennial basis. Among other documents reviewed by examiners in reaching financial conclusions are policyholder matters. As with the Market Conduct Examiners Handbook, the Financial Examiners Handbook is used by every department of insurance in the United States. Similarly, these standards have been universally agreed to by all of the nation’s Commissioners of Insurance as adopted formally by them through the NAIC. The standards of the Financial Examiners Handbook are universally recognized as appropriate standards against which to judge health plan and health plan provider behavior including that of HMOs, PPOs and POSs.
4. HMOs, PPOs, POSs: Financial Examinations. On a regular basis, my Department conducted financial examinations of health plans and plan providers utilizing the Financial Examiners Handbook to determine whether in fact the plan provider was, and would likely remain, solvent. As with market conduct exams, financial examinations entailed physically going into the plan providers’ operations and studying files and other items to: (i) assure compliance with policyholder duties; and (ii) to assure that financial reporting matters were properly carried out. As further discussed below, errant plan providers were warned, disciplined and prosecuted as required.
5. HMOs, PPOs, POSs: Complaints From the Public. On a daily basis, my Department received incoming consumer complaints as to health plan and plan provider practices. This Consumer Protection Division was staffed by Department lawyers who resolved the individual complaint and equally importantly, those lawyers also determined whether a plan provider evidenced unacceptable practices — that is to say, whether the incoming consumer complaints in fact constituted a red flag as to the health plan or health plan provider’s potential behavior across the board.
6. HMOs, PPOs, POSs: Prosecution. To the extent plan provider behavior required formal action (whether a result of complaints from the public or a result of Department investigation through a Market Conduct Examination or the Financial Examination), my Department prosecuted such health plan and health plan providers under the state’s civil Administrative Procedures Act. In connection with such prosecutions, I served in various capacities during my eight years as a regulator, including serving as: (i) prosecutor (as Assistant Attorney General); (ii) as the decision maker as to whether to initiate prosecution in the first instance (while First Deputy and Commissioner of Insurance); and (iii) as the Administrative Law Judge (“ALJ”) who presided over the prosecution and entered findings of fact and conclusions of law as to plan provider coverage determinations and claim settlement practices and broker practices. I have served as an ALJ in scores of such cases where the health plan provider’s broker practices were the primary issues and I entered final decisions and orders in such matters.
B. HMOs, PPOs, POSs: Expertise as to Duties of Health Plan and Health Plan Providers as an Insurance Industry Executive: CEO of a Major US Insurance Organization. I discuss my executive experience at NCCI under this section because in addition to expertise as to policies (discussed above), my experience at NCCI also resulted in expertise as to plan provider responsibilities.
While I was President and CEO, NCCI was subject to the full range of authority of the various state DOIs as discussed above. As such, I am very familiar with the duties of DOIs licensed health plans and plan providers relating to their obligations and responsibilities to their brokers and the regulatory scheme in place by the various DOIs as to such matters.
While President and CEO of NCCI, I visited and physically toured and reviewed in excess of 400 insurance companies and gained direct exposure to the procedures and processes and standard industry practices of the U.S. health insurance community in that any number of those plan providers had health plan and health insurance operations including HMOs, PPOs and POSs.
C. HMOs, PPOs, POSs: Expertise as to Duties of Health Plans and Health Plan Providers: General Counsel to the American Academy of Actuaries. As stated above, I served as General Counsel and Director of Government Relations for the American Academy of Actuaries. I mention it again here in connection with the duties of health plans because Academy members included affiliation with virtually every health plan and health insurance company in America. The Academy’s Board of Directors was likewise made up of leading insurance company executives from such health plans and insurance companies including HMOs, PPOs, and POSs.
D. HMOs, PPOs, POSs: Expertise as to Duties of Health Plans and Plan Providers: Attorney in Private Practice Iowa. As an attorney in private practice, I represented a number of health plans and health plan providers and became familiar with applicable health industry standards of practice, including plan provider responsibilities toward their claimants. Those interests also included intimate involvement with insurance forms, as counsel to the: (i) Professional Insurance Agents of Iowa; and (ii) the Iowa Association of Life Underwriters (life, disability, health HMO, PPO, POS and annuity insurance agents).
3. HMOs, PPOs, POSs: Expertise as to Insurance Agent and Broker Compensation by Plan Providers.
A. As to Insurance Agents and Brokers: Commissions HMOs, PPOs, POSs. I have had extensive and substantive experience relating directly to the duty of care that comes to bear on insurance agents and agencies and brokers in their various relationships inclusive of matters such as commissions (including special commission arrangements and inclusive of the licenses required to sell the products provided by HMOs, PPOs and POSs).
B. Insurance Agents and Brokers: Assistant Attorney General HMOs, PPOs, POSs. As an Assistant Attorney General (see below), I have prosecuted agents for violations relating to their duty of care, including formulation of the charges and full prosecutorial conduct of the related hearing where the license of the agent was placed in regulatory jeopardy.
C. Insurance Agents and Brokers: First Deputy Commissioner of Insurance: Screening for Character and Background HMOs, PPOs, POSs. As First Deputy Commissioner of Insurance (see below), along with my staff, I have screened hundreds of thousands of agents for character and background as a condition precedent to offering HMO, PPO and POS related products (separate and apart from subject matter competence).
D. Insurance Agents and Brokers: First Deputy Commissioner: Issuance of Agent Licenses HMOs, PPOs, POSs. As to subject matter competence, I have formulated agent-licensing exams in the first instance. Upon passage of the exam, I have licensed hundreds of thousands of insurance agents.
E. Insurance Agents and Brokers: First Deputy Commissioner: Continuing Education HMOs, PPOs, POSs. I have had full responsibility for continuing education for licensed agents (approving CE courses in the first instance for acceptable content; overseeing the administration of such courses and granting and denying credit for such courses).
F. Insurance Agents and Brokers: First Deputy Commissioner of Insurance: Prosecution of Agents HMOs, PPOs, POSs. I have initiated agent revocation actions and prosecuted those actions to completion in connection with breach of their duties of care.
G. Insurance Agents and Brokers: First Deputy Commissioner of Insurance: ALJ HMOs, PPOs, POSs. I have sat as the Administrative Law Judge (“ALJ”) in such actions and entered findings of facts and conclusions of law in scores of cases in which agents and brokers were prosecuted for violations relating to standards of care.
H. Insurance Agents and Brokers: First Deputy Commissioner: Appointment of Insurance Agents by Plan providers HMOs, PPOs, POSs. I have had direct responsibility for and oversight of the appointment process by insurance companies (some 500 life health insurance companies) of all of their health agents. I have supervised as well the ongoing relationship of all insurance companies with all of their appointed agents.
I. Insurance Agents and Brokers: First Deputy Commissioner of Insurance: Compensation Between Agents and Plan providers HMOs, PPOs, POSs. In this position, I had responsibility to oversee contracts between insurance agents and brokers and plan providers. I that regard, I was fully knowledgeable of and approved commission provisions in such contracts and all other aspects of such contracts.
J. Commissioner of Insurance: All of These Duties as to Insurance Agents and Plan providers HMOs, PPOs, POSs.As Commissioner of Insurance, I had full authority and responsibility for each of the duties outlined immediately above (in my position of First Deputy Insurance Commissioner) including that of: (i) screening for character and background, (ii) agent continuing education, (iii) prosecution of agents, (iv) serving as the ALJ in contested cases relating directly to agents, (iv) the agent appointment process and (v) overseeing contracts between plan providers and agents, including being fully knowledgeable of and approving of commission provisions in such contracts.
K. Agents and Brokers: National Association of Insurance Commissioners: Commissions HMOs, PPOs, POSs. As discussed elsewhere, I served as an executive to the NAIC, including extensive service relating to the various NAIC tools related to overall duty of care and commissions and broker compensation, including the: (i) NAIC Annual Statement; (ii) the NAIC Annual Statement Instructions; (iii) the NAIC Financial Condition Examiners Handbook; (iv) NAIC Statements of Statutory Accounting Principles (“SSAP”); and (v) NAIC Accounting Practices and Procedures Manual. I served as well at the NAIC in connection with various issues relating to insurance agents.
L. As an Attorney in Private Practice HMOs, PPOs, POSs. As a lawyer, I have defended insurance agents and brokers against allegations (in administrative law forums) of violations of their duty of care. As an attorney in private practice, I represented a number of agent and plan provider interests and became familiar with the applicable standard of care and custom and practice relating to agent and plan provider practices, including that of compensation. Those interests included the position of Iowa Counsel to the Property Casualty Insurers Association of America. Those interests also included intimate involvement with insurance agents and plan providers, as counsel to the:
- Professional Insurance Agents of Iowa (property casualty insurance agents);
- Iowa Association of Life Underwriters (life, health, HMO, PPO, POS and annuity insurance agents); and
- The Property Casualty Insurer Association of America, where I served as Iowa Counsel to this trade group), the trade association of smaller stock property casualty insurers.
- Specific duties as counsel at both the Professional Insurance Agents of Iowa (property casualty insurance agents, who held commission contracts with insurers) and the Iowa Association of Life Underwriters (life, health and annuity insurance agents, who held commission contracts with plan providers, included in-depth familiarity with their plan providers, their agents and their contracts, including commission provisions of such contracts). Specific duties at the American Association of Property Casualty Insurers included daily counsel to member insurers as to their duties in connection with their agent contracts.
- HMO Expert Witness
M. Insurance Agents and Brokers: Property Casualty CEO HMOs, PPOs, POSs. As President and Chief Executive Officer of a major U.S. property casualty insurance entity (NCCI) doing business in some 40 states, I have had substantial working relationships with the U.S. property casualty insurance agent and agency insurance community. I know insurance agents and insurance agencies and the standard of care and custom and practice, including those relating to commission contracts.