Transparency and Insurance Companies

Maybe you have heard the word transparency or maybe not, but our public officials have begun calling for more transparency, that is openness and less secrecy in decision-making of government agencies, nonprofits, private corporations, and even Congress itself. In a sense this is just a retooled idea for the sunshine acts, open meetings and freedom of information applied beyond government agencies. Recent IRS changes require more transparency from nonprofits concerning executive compensation, fund raising, organizational structure, and governance. This is in part due to public outcry over what were deemed excessive salaries for nonprofit executives without any accountability to the public. (see GuideStar, www2.guidestar.org). Scandals relating to the financial meltdown have increased the pressure for greater accountability and transparency by banks, loan institutions and government corporations (the SEC, Fannie Mae, Freddie Mac) and the regulators (Federal Reserve, FTC, and the Attorney General’s office). And oddly enough, calls for transparency are an outgrowth of a movement to put pressure on non-democratic countries to stem corruption, open up their decision-making, and be more accountable for the way they spend money given to them. Transparency International (www.transparency.org) regularly publishes report cards on government corruption and bribery. Befitting its goal, Transparency International places its audit, annual report, its governance process, a code of conduct, and an ethics policy on its website (www.transparency.org).


In the age of the web, this transparency ought to apply to other companies beyond banking, nonprofits and whole countries. My particular focus is on health insurance. My recent personal experience has been with a long term care insurance company. I have been assisting my parents with obtaining reimbursement. The first step was to call claims when we began to receive letters indicating that the company needed more information. This meant punching in information before you could speak to a claims rep who, in turn, asked the same information and more. This, of course, is to prevent fraud to insure you have the right to the information, but it had an unintended effect. My father grew weary of trying to get information he was entitled and he turned it over to me so he could take care of my mother.

Transparency means balancing a company’s privacy or, in this case, the policy holder’s privacy, with easily accessibility and a quick turnaround. What I encountered was a lack of accessibility and obfuscation once you got past the automated system, the reverse of transparency. I repeatedly asked for clarification, forms, or examples of the information required. The company claims reps, in turn, repeatedly told me that the providers would know what to send. When I pestered, begged, or yelled, the company hid behind privacy rules. Healthcare privacy regulations have given insurance companies an excuse not to be forthcoming. We have sent the permission form for me to make enquiries three times (known as a Hipaa form for the Health Insurance Portability and Accountability Act). In the latest round, I called to obtain the Hipaa form for a new provider. The insurance company would not fax the form or email to our chosen provider, but would fax it to me. I, in turn, faxed it to the provider. This is a form, not private healthcare information!

Transparency means accountability. When we did receive a letter from the insurance company, it was often sent namelessly making it difficult to inquire. When we did receive a letter with a name and tried to speak to that person, the claims representative could not transfer me, was not familiar with the person, had never heard of the department. Most recently I asked to transfer to a supervisor. That failed. On the web, the insurance company does have a place to email, but I have never had a response in the 3 times I have tried that.

Transparency requires a clear process. When I tried an alternative tactic of asking the company to identify providers that would meet its requirements, it did not pre-approve providers. Writing is usually the answer when talking does not help. But transparency has to be in place for this to work. The company, in fact, has two mailing addresses making for confusion, one location scans in information and the other takes calls. I wrote letters asking for explicit information on what the insurance company wanted and for providers’ names only to discover that my requests were scanned but no one replied. It’s difficult to ask for information when you have no names.
When claims were finally denied, a “nameless” letter simply stated that we were entitled to a management review. Because the company did not provide directions, I wrote an appeal winging it documenting all that we had done to seek reimbursement. I finally did receive a call from a very nice employee who was going to assist with getting an approved provider and forwarding our appeal. For the first time, I had a direct phone line. When I called back a few weeks later and got voice mail I presumed the person was on vacation. People do have the right to take time off. But when no one answered for over a month and voicemail became full, I had no recourse except to call claims. The claims rep had never heard of the liaison’s (she had no title) office or her name and again repeated that the claim had been denied. A transparent process should be seamless without a customer needing to understand the behind the scenes details.

If ever there is a case for transparency, it is with insurance companies. A requirement of public traded companies is that they have an annual report. It lists the executives, the board, and its financial status. From what I gather from the web and the annual report, the company is run by four executives and the claims representatives! The local field office representative does not handle claims (in essence refusing to assist me) and is just as much in the dark about departments and phone numbers as the claims reps.

Transparency resides along with accountability, integrity, honesty of actions, and caring about employees and the public. I feel sorry for those claims representative who are the public side of the company and who are considered so low that they do not have a company directory, a web interface to look up information, or e-mail capability. I do understand that the company cannot have policy holders calling all sorts of different people. The reality is that the web has made it possible for greater transparency to be immediate and we now demand it. Transparency is procedural transparency, greater openness in decision-making as well as the availability of information. This huge company presents itself as having an outdated claims process with little to no information on the web. It does not email anything slowing down the process. Even my 88 year old father emails! At the very least, I should be able to trace what information they have and obtain the necessary forms to submit a claim. Countless hours have been wasted by claims reps, by me, and my father when greater transparency should be the norm. Transparency makes for good customer service!