Recently, the American consumer discovered the long-standing insurance industry practice known as rescission. As described in testimony before the Senate Committee on Commerce, Science and Transportation, by Wendell Potter, the former Chief Spokesman of CIGNA,
"To help meet Wall Street's relentless profit expectations, insurers routinely dump policyholders who are less profitable or who get sick...One is policy rescission. They look carefully to see if a sick policyholder may have omitted a minor illness, a pre-existing condition, when applying for coverage, and then they use that as justification to cancel the policy, even if the enrollee has never missed a premium payment...The Committee's investigation into WellPoint Inc., UnitedHealth Group and Assurant Inc., found that they canceled the coverage of roughly 20,000 people in a five-year period, allowing the companies to avoid paying $300 million in claims."
But, to verify the policy coverage and prior medical conditions of millions of health insurance customers requires more than "looking carefully" through billions of pieces of data. Surprisingly, Americans are unaware of the Medical Information Bureau, Inc. technology products.
The personal health and life insurance market depends heavily on technology to collect underwriting information, expedite policy coverage, and reduce fraudulent pay-out costs. Much like the major credit bureaus Experian, Equifax, and TransUnion facilitate the consumer credit market by collecting and exchanging financial information, the personal health and life insurance market also relies on a consumer reporting agency to exchange information. However, for personal health and life insurance, there is only one agency - the Medical Information Bureau, Inc. (a/k/a, MIB Group, Inc., a/k/a, MIB, Inc., a/k/a, MIB Solutions, Inc.).
According to the Federal Trade Commission, the Medical Information Bureau, Inc. (MIB, Inc.), a Delaware Corporation, is the nation's largest insurance reporting agency, with approximately 750 member insurance companies, which account for 99% of the individual life insurance policies and 80% of all health and disability policies issued in the United States and Canada. (FTC Press Release, June 21, 1995 "Nation’s Largest Insurance Reporting Agency Agrees To Expand Consumer Rights – Fair Credit Reporting Act requirements to apply to insurance investigations under new policy accepted by Medical Information Bureau.") Interestingly, the MIB, Inc. organization was founded in 1890!
Here's a brief history of MIB, Inc.- "concerned with the undisclosed risk posed by fraudulent applicants, 15 Medical Directors organized in 1890 to ensure the livelihood of their businesses, the solvency of the insurance industry, and the fair and equitable pricing of policies. That organization would become MIB. These MIB member companies quickly realized that they already possessed the best resources for determining the accuracy of applicants’ health – their current and former applications. Agreeing to share and analyze this information afforded valuable insights into the true risks they were carrying. More than a century later, this integral information exchange is still at work protecting the life, health and disability income insurance industries."
Today, the Medical Information Bureau, Inc. (MIB, Inc.) uses modern technology to collect and furnishes information on consumers to all MIB, Inc. member corporations for use in the insurance underwriting process. Under Federal law, the Medical Information Bureau, Inc. is a "consumer-reporting agency" and is required by law to provide a free medical report to consumers every 12 months. Just as every consumer is entitled to a free annual credit report (www.annualcreditreport.com), every consumer is also entitled to a free annual medical report (www.annualmedicalreport.com). During President Obama’s 'Health Care Speech' to Congress in September, the President admonished policy rescission, without indicating how future legislation will eliminate this insurance industry practice. From the text of President Obama's address to Congress,
"More and more Americans pay their premiums, only to discover that their insurance company has dropped their coverage when they get sick, or won't pay the full cost of care. It happens every day...One man from Illinois lost his coverage in the middle of chemotherapy because his insurer found that he hadn't reported gallstones that he didn't even know about. They delayed his treatment, and he died because of it...That is heart-breaking, it is wrong, and no one should be treated that way in the United States of America."
Why do insurance companies persist in rescinding the policies of paying health insurance consumers? In one word- profit. Again, from testimony before the Senate Committee on Commerce, Science and Transportation, by Wendell Potter, "Dumping a small number of enrollees can have a big effect on the bottom line. Ten percent of the population accounts for two-thirds of all health care spending. The House Energy and Commerce Committee's investigation into three insurers [WellPoint Inc., UnitedHealth Group and Assurant Inc.] found that they canceled the coverage of roughly 20,000 people in a five-year period, allowing the companies to avoid paying $300 million in claims."
Functionally, rescission is carried out by employees of health and insurance companies. The LA Times, in "Blue Cross praised employees who dropped sick policyholders, lawmaker says. Workers received high marks on performance reviews after policies were rescinded, documents show" reported that the House Energy and Commerce Committee's investigation,
"uncovered several rescission practices that one lawmaker called egregious, including targeting every policyholder diagnosed with leukemia, breast cancer and 1,400 other serious illnesses. Such investigations involve scouring the policyholder's original application and years' worth of medical and pharmacy records in search of any discrepancies."
But, "scouring years' worth of records" is an inaccurate description that doesn't do justice to MIB Inc.'s policy rescision technology. Says Douglas M. Mertz, MIB Solutions’ Vice President, "MIB information is the fastest, most cost-effective way to help determine if medical statements on applications are accurate and complete." ALL consumers applying for personal health or life insurance consent to release their information to the Medical Information Bureau, Inc. (Every personal health and life insurance company requires this in the policy application; if you have a policy, look at the terms.)
Importantly, MIB, Inc. collects both medical and non-medical information about consumers. Although the Medical Information Bureau, Inc. (MIB, Inc.) refuses to release exact details about its coding standards, according to the Federal Trade Commission, a consumer medical report file in the Medical Information Bureau, Inc. (MIB, Inc.) database may include, "an individual’s credit history...medical conditions, driving records, criminal activity, and participation in hazardous sports, among other facts." To be sure, the pricing and coverage of your personal health or life insurance policy may depend, in part, on your individual credit history, or even participation in hazardous sports (such as smoking, skydiving, or gun ownership).
The Medical Information Bureau, Inc. provides the technology behind policy rescission to corporate health and life insurance companies. Here is an overview of the main products sold by MIB, Inc.,
"MIB, INC. CHECKING SERVICE – Issue With Confidence."
The MIB Checking Service is the flagship service offered by MIB, Inc. It is the fastest, most effective way to prevent omissions and material misrepresentations on insurance applications. Often when drawing upon information obtained during an applicant’s previous policy applications for insurance, a different picture appears. Forgetfulness. Willful omission. Outright deception. MIB reports are renowned for exposing a lack of candor in applications early in the process. As a result, MIB member companies are equipped with one of the most potent weapons against undue risk exposure–a proficient instrument enabling them quickly and cost effectively to get them to the point where they can issue with confidence.
"INSURANCE ACTIVITY INDEX- Identifying frequent shoppers"
Even though you’d like to know all of your applicants’ application activity, you often have to take their word for it, unless you’re an MIB member benefiting from the Insurance Activity Index. If you suspect an applicant of loading up on insurance by taking out a series of smaller policies or churning insurance from year to year, you can track the number of times an MIB check was made on their applications during the two years prior to yours for your line of business.
"REQUEST FOR DETAILS- When you need to get granular"
Not all risk assessments are cut and dry. When you need to verify and validate the contents of a coded report, MIB promotes the sharing of information with the member company that input a particular code.
"FOLLOW UP SERVICE- Casting a larger net"
As the industry’s only source for post-policy issue information, the MIB Follow-up Service provides a crucial "second chance" to underwrite based on additional, discovered information during the contestable period. For two years following the original MIB inquiry, this Service alerts members to a policyholder’s medical conditions that were undisclosed at the time of the original application.
To apply these data products, underwriters, like those at Blue Cross, use the MIB, Inc. Productivity Suite, a WEB-based software tool. For example, one tool to identify applicants is the MIB Alpha-Index Processing Service (ALPS),
"The MIB Alpha-Index Processing Service (ALPS) technology is capable of searching files containing millions of names at the rate of hundreds of names per second. MIB’s search algorithm selects a large number of candidate last name and first name combinations very quickly and then returns only the most relevant records. Whether the first name is Johan, Ivan, or John, and the last name is Smyth, Smythe, or Smith, you’ll find the correct individual. ALPS is very flexible. Your ALPS file can be adapted to meet your business and processing needs, whether the problem you are attempting to solve is customer service oriented, new business, underwriting, or some other business problem. There are no limits to the number of records that can be stored in your ALPS file. In fact, some of the largest files at MIB are the policyholder files of the largest life insurance companies."
How effective is the MIB, Inc. suite of products in saving money for its corporate clients? The MIB, Inc. marketing materials offer the following description: "Life Insurers Save Over $46 Dollars for Every Dollar They Invest with MIB, Inc." Here's more indication from the MIB, Inc. marketing materials, "the MIB’s fraud detection and deterrence saves its member companies, on an annual basis, an estimated $1 billion by allowing them to avoid fraudulent insurance applications and early claims."
Clearly, with such an exceptional return on value, the insurance companies intend to continue to develop the techology powering rescission. In fact, IBM Corporation (NYSE: IBM) announced on February 13, 2008, that MIB, Inc., the largest provider of fraud detection services to the North American life and health insurance industries, is building a service oriented architecture (SOA) using IBM technology to better serve its clients. Specifically, an IBM press release claims,
MIB, Inc. is moving towards an SOA so its members can more easily integrate the services they need from MIB with their own business systems. At the same time, SOA is allowing MIB to reuse its existing software in new ways that allow the company to better serve its 500 member life and health insurance companies. IBM’s DataPower SOA security appliance gives MIB the functionality it needs to meet its architectural goals. By combining IBM DataPower SOA security appliances with Web 2.0 capabilities and rich Internet applications, customers are assured of secure data exchanges and presentation of information in a familiar interface that takes advantage of the latest Web innovations.
"As a central clearinghouse for information significant to risk selection, one of MIB’s competitive differentiators is our ability to offer accurate, timely information that prevents insurance fraud and is easily integrated with our members’ automated business processes," said Alexander Klevitsky, director of Architecture and Enterprise Software, MIB, Inc.
With a multi-million dollar technological infrastructure supporting the rescission practices of its corporate insurance members, what technology does the Medical Information Bureau, Inc. offer to consumers to request, review, and appeal the information in their medical report files? A telephone number and the U.S. Postal Service. That's right- there is no secure website by which consumers can request their free annual consumer medical report. So, how do you request your medical report? Currently, it requires the completion of FIVE steps and a few weeks time:
- CALL – To obtain a free copy of your consumer medical report file, U.S. residents must call the Medical Information Bureau’s disclosure phone number at 1-866-692-6901 (TTY 866-346-3642 for hearing impaired). (NOTE: Consumers must call the Medical Information Bureau’s phone number at 1-866-692-6901 on Monday through Friday, from 8:00 AM to 5:00 PM (Eastern Time). The Medical Information’s phone number at 1-866-692-6901 is CLOSED ON SATURDAY, SUNDAY, AND FEDERAL HOLIDAYS.)
- IDENTIFY YOURSELF CONSUMER – While on the phone with the Medical Information Bureau’s disclosure line, consumers will be asked for personal identification information to assist the Medical Information Bureau (MIB) in locating your medical report file. Be aware that to validate your identification, the Medical Information Bureau may verify your information with other consumer reporting agencies.
- SIGN PERJURY AGREEMENT – Please be aware that while on the line with the Medical Information Bureau (MIB), you will be asked to certify under penalty of perjury that the information you provide about yourself to request disclosure your Medical Information medical report file is accurate, complete and you represent that you are the person that is requesting disclosure. NOTE – Failure to provide truthful information to the Medical Information Bureau could subject you to legal penalties, including account notation, monetary penalities, and/or imprisonment.
- MAIL SIGNED DOCUMENTS TO MIB, INC. – After properly completing steps (1), (2), and (3), consumers must sign and mail both (a) request for a Record Search and Disclosure, and (b) proper identification.
- WAIT FOR MIB, INC. TO MAIL YOUR MEDICAL REPORT – Upon receipt of your (a) request for a Record Search and Disclosure, and (b) proper identification, the Medical Information Bureau (MIB) will initiate the disclosure process and provide you with your medical report file.
PLEASE BE AWARE THAT THE MEDICAL INFORMATION BUREAU (MIB) DOES NOT OFFER A CENTRALIZED, MODERNIZED WEBSITE TO REQUEST, REVIEW, OR DISPUTE YOUR MEDICAL REPORT FILE. THE MEDICAL INFORMATION BUREAU DOES NOT HAVE A WEBSITE TO COMPLETE THIS PROCESS.
Federal law guarantees that every consumer is entitled to a free annual copy of their medical report file stored by the Medical Information Bureau, Inc. Have you ever checked your free medical report file from the MIB, Inc.? If not, please recommend this diary to help spread the word about the Medical Information Bureau, Inc. and to educate insurance consumers.