QUESTION: MY insurer refused to pay for the cost of a cervical collar. For the past five years I have had a severe neck pain. An orthopaedic physician diagnosed a degenerative disc. He said I was suffering from cervical spondylosis [which is a type of osteo arthritis]. Physiotherapy and the wearing of a soft cervical collar were recommended. He also prescribed medication. I bought the collar. The company refused to repay me. They said the collar was excluded. Were they correct?
-- D. W., Kingston 10.
Answer: A soft cervical collar costs about $700. Most of the claims reviewed in this column involve thousands of dollars. Your question is very important. It is not about dollars and cents. It is about principles, contract and insurance law. Much as the recent fracas at the RGD was about expectations, service and contract. Did the insurers properly interpret the policy? Should they have paid the claim? The decision seems suspect. But, let's examine the facts.
I sent a copy of your e-mail to the insurer. Here is what they told me: "The Government Employees Administrative Services Only Scheme [GEASO] (sic) -- is an ASO -- which is administered by [us]. Under this scheme the provision of a cervical collar is excluded. As mentioned, this is an ASO Scheme and a monitoring committee is in place. This committee makes decisions regarding the policy." The jargon conceals far more than it reveals.
ASO is short for Administrative Services Only. It means that your employers are your insurers. The insurance company settles the claims and provides administrative services. Your employers fund the claims and pay a fee to the insurer. In short, your health insurance plan is self-insured. Insured and self-insured plans are similar in one respect. What is covered is spelled out in the policies. I have not seen your policy. I will therefore have to speculate.
"ASO" health plans tend to follow "insured" health plans. A policy from the latter group may give clues to what is covered [or excluded] by the former. There is nothing in the policy I examined about cervical collars. It refers to "Covered Medical Expenses" (CMEs). CMEs are defined in Article 25. It lists 19 groups of items that are excluded from CMEs. Since the collar is not among the exclusions it means it is included. Item (d) of Article 25 gives an important criterion about CMEs. "Charges for any care, treatment, services or supplies--" should be "-- certified by the physician attending -- as being required for treatment." I would argue that the cervical collar is a CME. I am quite sure that it is the intention of the "insured" health plan to include a cervical collar prescribed by a doctor as a CME. My final argument is based on insurance law. The causa proxima [active cause] of your loss was cervical spondylosis. Your medical bill, X-ray charges, prescription charges and expenses for physiotherapy were, I suspect, all paid by the health plan. Why should the expenses for the cervical collar be refused, when it arose directly out of the same cause as the other expenses? If the collar is excluded, someone should be able to quote the "chapter and verse" of the policy. Thus far, both you and I are still in the dark.
May I suggest that you speak with someone on the Monitoring Committee and also Mrs. Rupertia Smith of the insurer's Public Sector Business Unit. Send them a copy of this article for what it is worth. I believe that you should get your money back.
Cedric E. Stephens, ACII, chartered insurance practitioner, is the president of Aegis Resources Ltd., an insurance consultancy and the co-host of a radio programme on risk and insurance, Risky Business. If you need free, professional advice to solve an insurance problem write to The Financial Editor or contact Mr. Stephens directly at:
aegis@cwjamaica.com.
