Washington Post Examines Services Providing Insurers With Applicant Risk Evaluations Based On Prescription Information

Main Category: Health Insurance / Medical Insurance
Article Date: 05 Aug 2008 - 12:00 PDT

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Health insurers have access to a "powerful new tool for evaluating whether to cover individual consumers: a health 'credit report' drawn from databases containing prescription drug records on more than 200 million Americans," the Washington Post reports. Companies create the patient profiles by mining claims databases kept by pharmacy benefit managers, including drugs and dosages prescribed, dates of refills and information on the prescribing physician. The companies then use this information to create a risk rating, or a number that represents an "expected risk" for a particular group of people. According to the Post, the information is available only for patients who are clients in PBM databases and excludes those who pay for drugs in cash.

Ingenix, a Minnesota-based health information company that offers consumer risk ratings through its MedPoint tool, says the drug profiles are more accurate and less costly than the traditional method of seeking physician records. The company also noted that patients must authorize the release of data. Mark Franzen -- managing director of Milliman IntelliScripts, which provides a similar service -- said, "Some insurers can make a decision in the same day, or right on the spot. That's the real 'value-add.'"

However, privacy and consumer advocates have raised concerns that the trend is "taking place largely outside the scrutiny of federal health regulators and law makers," the Post reports. Joy Pritts, research professor at Georgetown University's Health Policy Institute, said, "As health care moves into the digital age, there are more and more companies holding vast amounts of patients' health information." Pritts added, "Most people don't even know these organizations exist. Unfortunately, the federal health privacy rule does not cover many of them. ... The lack of transparency with how all if this works is disturbing."

Although Ingenix and Milliman say they only work with information released by consumers, the Health Insurance Portability and Accountability Act does not grant HHS power to directly investigate and hold the companies or groups accountable. Legislation being considered in Congress would expand federal officials' ability to oversee such "downstream" organizations and also includes a prohibition on the sale of electronic health records. The Federal Trade Commission in February issued an order saying MedPoint and IntelliScript are consumer reports under the Fair Credit Reporting Act, so the companies must notify insurers that applicants denied on the grounds of the risk reports have the right to review and correct inaccuracies in the reports (Nakashima, Washington Post, 8/4).

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