Twisted System

Sitting on the couch, Shawndra Lee stretches, bored, as her mom talks about their HMO coverage. Her back cracks with a sound like a rifle shot. The loud snap is one of the only indications that her spine is bent 65 degrees out of shape. To get some idea of how severe that is, think of this: A 90-degree curve would have her torso almost parallel with the floor.

She doesn't whine or complain or regard herself as sick. Like a lot of 14-year-old girls, Shawndra plays basketball, practices her piano lessons, talks on the phone with her friends and plasters her wall with posters of the shaved-chested teen icons the Backstreet Boys. ("But I'm not really into them anymore," she insists.) About the only thing that separates her from most teenagers is the hump under her right shoulder, caused by scoliosis, a progressive disease of the spine that causes her back to grow in an s-shaped curve.

Shawndra and her parents, David and Diane Lee, have recently reached the end of a long journey through the twists and turns of the HMO system--a journey that's ended in defeat and frustration. They have exhausted their appeals against their health insurer, PacifiCare, in an effort to get a new treatment for Shawndra's condition, a surgery that they believe is less intrusive than the operation offered by PacifiCare.

The Lees say the $10 billion-a-year health-care giant has put them off, changed its story, stalled and even lied to them over the last seven months. They thought the operation they wanted might be covered by their HMO, only to find the HMO was busy covering itself. Even though PacifiCare's own doctors agreed the new surgery could work for the Lees, PacifiCare wouldn't buy it.

Now, the Lees have found that, under federal law, even if they took PacifiCare to court, all they might get is money for the operation, without attorneys' fees or punitive damages. As David Lee says, the cost of the lawsuit would be more than the surgery.

PacifiCare says it has always been willing to pay for the most appropriate treatment for Shawndra. It's the Lee family that has wasted time, PacifiCare says.

The Lees' struggle comes at a time when the Arizona Legislature and Congress are trying to hold insurers like PacifiCare accountable when they deny care. David Lee has also brought a complaint with the state medical board against PacifiCare's medical director for his actions in this case, the first citizen to do so.

The Lees now say they will pay as much as $50,000 themselves for Shawndra's surgery. It's something they could have done all along, and many parents may have made that decision long before the Lees did, once it was clear the insurance company was balking. Even though it means tens of thousands of dollars of their own cash, it's the only way they'll get the surgery they want.

But the Lees, like many other families, were newcomers to the complicated and confusing world of modern medicine. They'd never faced a major medical problem before. They weren't helped by the fact that PacifiCare and its doctors were giving them conflicting and incomplete information about Shawndra's condition. No one told them they needed to act soon or their daughter would get worse. And when they needed clear language and answers from PacifiCare, they got form letters and voice mail.

They thought by following the rules that they could convince PacifiCare to change its mind.

They were wrong.

Shawndra was first diagnosed with scoliosis at a school screening in May 1997, when she was 12. Many teens get the condition as they enter puberty; it's estimated to affect 2 percent of all adolescent females, and 1 percent of all males. Many schools, like Shawndra's, offer the free screenings to catch the disease early. While relatively painless for teens, as scoliosis progresses, the pain gets worse. The condition can also cause lung problems if allowed to continue.

Scoliosis causes the spine to twist into an s- or c-shaped curve. No one really knows why--some doctors believe hormones are the most likely cause, but a genetic explanation hasn't been ruled out.

To a teenage girl like Shawndra, however, the cause is less important than how the problem is going to be fixed.

In milder cases, scoliosis can be treated with a back brace, or corrected through surgery when the curve is more severe.

Shawndra's spine was about 45 degrees out of alignment when her school nurse caught it. At that already sharp angle, bracing wouldn't do much good. Shawndra would have to have surgery.

Complicating matters, Shawndra's father, David, doesn't live in Arizona. The family moved here about six years ago so that David could take a job with Honeywell. But he was laid off in 1996, and moved to Portland to work, commuting to see his wife and child. Although he works as an engineer for a flight-systems manufacturer now, he's an independent contractor and isn't covered under the company's health plan.  

But Diane has insurance through her employer. She had a choice of HMOs, and picked PacifiCare, the largest HMO in the West, and the fifth-largest in the nation.

Today, Diane Lee says simply, "I wish I'd picked Aetna."
A lot of PacifiCare customers might echo that. While PacifiCare has impressed Wall Street with its growth and profit margins, it's also enraged patients and taken heat for a callous attitude.

In the last five years, the California-based insurer has been taken to court by regulators and patients, hit with fines in California and Florida for its business practices and criticized for profiling physicians who write costly prescriptions.

"This is definitely a company that is more concerned with its stock price than patients," says Jamie Court, the advocacy director for the Foundation for Taxpayer and Consumer Rights, a nonprofit watchdog group. "Patients have a tendency to fall through the cracks, particularly when they don't go to war to protect their rights."

PacifiCare and other HMOs say they've gotten a bad rap, that denials are the tool with which they control unnecessary and out-of-control care. And they've been fighting back, particularly through political means. PacifiCare gives massive amounts to politicians--about $2 million annually on lobbying and contributions. And late last year, a consortium of HMOs, including PacifiCare, pledged to spend $20 million on an image-buffing ad campaign.

PacifiCare is run locally by Richard Badger, president of PacifiCare of Arizona, and Ace Hodgin Jr., vice president of health services. PacifiCare covers 194,000 people in the state, and more than 55 hospitals and 3,000 physicians belong to its provider network. Over the last three years, the state Department of Insurance has received 214 complaints against the HMO, ranking it third in complaints among health insurers.

After the school nurse pointed out Shawndra's condition, the Lees took their daughter to Dr. Jan Willcox, their primary-care physician approved by PacifiCare.

But Shawndra needed a specialist, and the Lees took their first step into the twilight zone of an HMO-dominated world.

In order to see a specialist, the Lees needed a referral from Willcox. The primary-care physician is often called, in HMO jargon, the "gatekeeper," who, like a bouncer, decides who gets in, and who stays out. The HMO won't pay unless there is a referral. This keeps its costs down because fewer people end up seeing the more expensive specialists.

These are the hoops most people have to jump through for health care today. About 175 million Americans are covered by HMOs, and Arizona is near the front of the pack: 89 percent of those with medical insurance in the state are covered by HMOs.

In September 1997, four months after the Lees first learned of Shawndra's scoliosis, she finally got in to see Dr. Terry McLean, an orthopedic surgeon. The curve had worsened to 55 degrees, he found, and he recommended surgery. But, according to the Lees, his bedside manner left something to be desired.

McLean, who wouldn't talk to New Times, explained to the Lees how scoliosis is treated in most cases: through a method called posterior correction. The surgery requires opening an incision all the way down the patient's back, almost like filleting a fish. Several vertebrae are usually removed from the spine, and metal rods are inserted to fuse the backbone into the correct position.

The procedure, while fairly common, is long and intense. The patient has to have blood drawn and stored to make up for the substantial loss during the operation. The incision stretches down the patient's whole back, leaving a long scar. It's usually a week before the patient can get out of bed, and months before she has a full range of motion.

McLean seemed to emphasize the risks and didn't take much time to explain things, Diane and Shawndra say. "He was very curt, very rude," Diane says. "He acted like we were wasting his time."

But even though McLean talked about the risks of the surgery, the Lees say he never told them it was urgent. He also never informed them about any other options or procedures. He said they should think it over and get back to him, Diane Lee says.

Shawndra was terrified, her mother says. "She was crying in the car on the way home, she was so upset," Diane Lee recalls. "She was saying, 'I don't want that.'"

"We didn't know anything about the operation, what was involved," Shawndra Lee says. "He was the first doctor we talked to who had done the surgery. He made it seem very scary."  

When David Lee heard about this, he went looking for alternatives.
He thought he found the answer when he came across Dr. Ronald Blackman's Web site. Blackman had started correcting scoliosis with a new method, which promised less blood loss, smaller incisions and a quicker recovery time.

In Blackman's method, Lee learned, the surgeon enters the body through the side of the chest, using very small cuts--one inch to one-and-a-half inches. Then the surgeon corrects the bend and places the rods with instruments guided by a small camera. The method is called endoscopic anterior correction.

Anterior correction is nothing new--surgeons have used it to correct spinal deformity since the late '60s. But Blackman has pioneered placing corrective rods and screws through the front with the use of cameras. He's done more than 50 of the surgeries so far, almost all with good results, Lee found.

Blackman, reached at Children's Hospital in Oakland, admits his procedure is new, and only a few other doctors in the country are doing it to correct spinal curves. The biggest risk involved in his procedure is that the surgeon has to work around one lung to get at the spine.

But Blackman argues that's better than leaving a "gruesome scar on a 13- or 14-year-old," and that the surgery is much less taxing for the patient. In the posterior approach, the patient will lose about a liter of blood. Using Blackman's method,the patient may lose less than a third of that, he says.

"We have not had to do [blood] transfusions" in any of the 50 cases so far, Blackman says. "There's much less loss of blood; the patients are usually off narcotics in five to seven days. Many even get out of bed voluntarily the next day."

Blackman says his procedure costs about the same as the posterior approach--about $20,000. (Recovery time in the hospital can up the bill by as much as another $30,000.) Since the recovery time for Blackman's procedure is shorter, he believes his method might even be cheaper for the insurance companies. At least two HMOs, Kaiser and Blue Cross/Blue Shield, have already covered operations.

Blackman, who has examined Shawndra and reviewed her medical history, says she is a "perfect candidate" for the surgery.

Shawndra was excited about the idea, her father recalls. "Her first response was, 'When can we do this?'" he says.

Shawndra says it was a weight off her mind: "I was sort of relieved. I wasn't as scared anymore."

The Lees went back to McLean in December 1997, about three months after Shawndra first saw him. David was home for the holidays, and wanted to discuss what he'd learned about Blackman's procedure and see if McLean would okay it.

McLean refused to refer Shawndra outside the PacifiCare network. According to his medical notes, McLean didn't think the new procedure "was really indicated, and it could all be done from posterior due to the flexibility of the curve."

Without a referral, the Lees couldn't go outside the network to see Blackman, at least not and have it paid for by their insurance. But they still wanted to look into the new surgery option. They say they asked McLean what to do.

David Lee says the doctor never spoke up about the curve increasing in size. "He never told me it was getting worse," Lee insists. "In fact, I thought it had stabilized."

And, Lee says, McLean made it seem like an open question. McLean wouldn't give the referral, but he didn't say the other operation was out of the question, either. He said they should think about their options and get back with him.

McLean's notes conclude, "He [Lee] will think about his options at this point and whether they would like to proceed on with surgery or the type of procedure they would like to have done." He suggested a follow-up appointment in three months.

So Lee began an e-mail correspondence with Blackman in June 1998, six months after meeting with McLean. About the same time, he began trying to find out if PacifiCare would cover Blackman's new method.

The Lees thought they had plenty of time. They didn't realize Shawndra's spine was getting more crooked as she grew. And they also thought there was a chance they could see Dr. Blackman and have it covered by PacifiCare because McLean had told them it was okay to explore their options. They didn't realize that McLean was their only option under the terms of their PacifiCare contract.

They didn't know they were already a long way down the wrong path.  

In July 1998, Lee wrote his first letter to PacifiCare. It wasn't really a formal appeal. Even though McLean wouldn't give him a referral to Blackman, Lee had not been officially denied the preferred treatment by PacifiCare.

Lee asked PacifiCare how his daughter could see Blackman.
"I don't believe I put it in pointing-fingers terms," he says, "but I wanted to know how to do this. I wanted to ask for a referral."

He got back a packet in the mail that didn't answer his questions, but outlined the appeals process.

Meanwhile, Diane Lee says she called her primary care physician repeatedly. Only after badgering Willcox for a referral, the Lees say, did they get sent back to see McLean.

Willcox, through her hospital's public-relations department, declined to talk to New Times.

PacifiCare says it doesn't have any record of contact from the Lees until August--eight months after the initial appointment with McLean--and cannot comment on what Willcox might have done.

And when Shawndra saw McLean again in August 1998, his answer was the same: no referral to Blackman.

But again, he didn't voice any objections to the surgery. He wrote in his medical notes, "With curves this size, this [surgery from the front] is certainly an option for them. In any event, they need to have surgical correction for this curve."

David Lee says McLean still didn't tell him the need for surgery was urgent. And, more to the point, he wanted to get the treatment he and his family preferred.

In September, the Lees called PacifiCare's member-services hot line to ask how to get a referral outside the network. The service rep told them to see their primary care physician, Dr. Willcox.

Willcox, of course, had already referred them to McLean. But, a month later, after more badgering by the Lees, Willcox finally asked PacifiCare to refer the Lees to Blackman because the Lees didn't want to see McLean--again.

Reason? "You must utilize the contracted facilities and physicians within your network. . . . Dr. Terry McLean is contracted in your network," the form letter, signed by Dr. Robert Sorrentino, a PacifiCare medical director, said.

Now PacifiCare--not just one of the doctors--had finally made a decision. David Lee made his first appeal.

Two weeks later, along with Blackman's analysis of Shawndra's most recent x-rays, Lee sent a letter to PacifiCare. "If my auto insurance allows me to take my car (with a projected life of 10 years) to the auto body shop of my choice . . . why can't an HMO allow me to take my only child (with a projected life of 70 years) to the doctor that I believe would provide the best care?" he wrote.

Lee even offered to shoulder some of the costs. "I've told them, 'If it's a matter of cost, tell me how much you're willing to pay, and I'll pay the rest,'" Lee says. "If it's a matter of plane tickets and hotel rooms, I'll pay that. I've made all these offers, and they just keep giving me the run-around."

In November, Lee got a letter from PacifiCare acknowledging his appeal, but warning that the HMO could take up to 30 days to make a decision. Lee called the hot line again to request an expedited appeal. Sorry, he was told. Only a physician, not a patient, can request an expedited appeal.

On the 30th day--December 15--PacifiCare sent back another denial. Reason? This form letter parroted the first: "The basis for this decision is, the member must use contracted facilities and physicians within the network."

What Lee didn't know at the time was that the man who decided his first appeal, Dr. Robert Elk, another medical director at PacifiCare, didn't even have Shawndra's records in front of him when he did it.

Lee sent x-rays and information from Blackman to PacifiCare as part of his first appeal, but Elk knew little about spinal surgery. In fact, none of PacifiCare's medical directors who reviewed the Lees' case have any experience in spinal surgery. McLean, who did, refused to get involved, saying he didn't want to be drawn into the appeal. He did not send Shawndra's records or his opinions to Elk when asked. So Elk, without any further research, denied the appeal. Elk never knew McLean had once suggested the less intrusive surgery "was certainly an option" for Shawndra.

By this time, Lee was getting angry. He still didn't know his daughter's condition was deteriorating. And he had yet to hear a medical reason why the surgery PacifiCare was offering was better than the surgery Blackman offered. Even PacifiCare's specialist had said it was an option.  

The cycle was becoming vicious. Lee wanted a surgery available only outside the network. The HMO said no. Why? Because you have to stay in the network. To get out of the network, you have to appeal. Your appeal is denied. Why? Because you have to stay in the network.

So, after roughly six months of run-around, Lee called the hot line again. This time, he told the service rep he would appeal--again--but he also warned that he would be protesting with a picket sign in front of the HMO's offices, all through Christmas week.

For the first time, Lee got a call back from someone who was making decisions about his daughter's case. Dr. Kenneth Davis, another PacifiCare medical director, promised that he'd arrange for Shawndra to get a second opinion from Dr. Gregory White, another orthopedic surgeon.

"It's like they were playing musical chairs with all these medical directors, so you never know who's responding to you," Lee says.

On December 21, Lee and his daughter showed up at White's office. They were told PacifiCare had made the appointment, but hadn't provided a referral number, and if they wanted to see the doctor, they'd have to pay $270. Up front.

David and Shawndra left. They went home and began making picket signs. Shawndra called friends over, and they helped, even agreeing to picket the offices with the family.

The signs said things like, "The HMO That Stole Christmas" and "My Car Has More Rights Than My Daughter," Shawndra recalls.

Just before 5:00 that evening, Lee got a call from Dr. Elk, the medical director who'd turned down David's first appeal. Elk apologized for the mix-up and said that Dr. White would see them the next day.

Lee says Elk promised that if White recommended the new procedure, PacifiCare would cover it. Elk now says he may have made that agreement.

Lee was skeptical. He says his caller ID showed Elk was calling from White's office. Elk says he made the call from his own office, and White says no one from PacifiCare has been to his office.

Still, Lee agreed to go back to White's office. The Lees saw White the next day, and he suggested that they get a consultation from Blackman at their own expense. Then, if they still wanted the surgery, Lee says, the doctor agreed to refer them.

"He kept saying, 'Well, if it was my daughter, I'd do this and this and this,'" Lee says. "And then he said, 'if you do all that, and you still want to go this way, I won't stand in your way.' He said he'd give me the referral."

David Lee thought the problem had been solved. On January 3, he even wrote a grateful letter to PacifiCare thanking them for finally listening to him. In that letter, he says the doctor and the administrators both promised to cover the surgery. PacifiCare never responded to the contentions in the letter one way or the other.

On January 29, David and Shawndra flew to Oakland, where Blackman pronounced her an excellent candidate for the surgery.

But the Lees still couldn't get a referral, even though Lee thought he'd done just what White had told him.

White confirms the conversation with Lee. He says he believes the more conventional posterior approach would be better for Shawndra, and he says he warned the Lees that Blackman's surgery is new and largely untested.

"I know what he does, and he has had good results, but as I told the father, he hasn't had anything published in a peer-reviewed article," says White. "With her case, I believe most people in Phoenix, and most people in Arizona, would say posterior is the way to go."

Still, White believes, in a major operation like this, the decision should be up to the family.

"I said if they want to pursue that, after reviewing all the information, and they still want to see this guy, they should go ahead," White says. "I think that, given the magnitude of the surgery, it has to be the family's choice, and they have to be confident in the physician and in all the treatment options. If, after all their data-gathering, if that's what they want to do, they're savvy enough people, and they want to make an intelligent decision . . . they should go ahead."

White adds that he spoke to a medical director at PacifiCare --he thinks it was Elk-- and told him the family should see Blackman and get an opinion. "Whether PacifiCare ever paid for it or not, I don't know," he says.

White also confirms that he never said anything about Shawndra's condition being urgent because he didn't think it was. He told Lee that they should do the surgery in the summer because of the long recovery period.  

In January, when Diane Lee came to White's office to pick up Shawndra's x-rays after the trip to Oakland, she learned the doctor didn't go so far as to recommend Blackman's surgery. The Lees felt betrayed again.

The Lees didn't know, however, that it wasn't up to White. It was still up to PacifiCare.

On February 3, David and Shawndra appeared at a formal hearing at PacifiCare's offices. Before a roomful of PacifiCare executives and Dr. Ace Hodgin, a PacifiCare vice president, Shawndra timidly showed the curve of her spine. Then David detailed Blackman's procedure, down to the type of screws used in the surgery.

Only one person present asked Lee a question about how many surgeries Blackman has done. Hodgin--the only doctor in the room--said nothing the entire time. The appeals panel said it would be in touch.

Meanwhile, unknown to Lee, PacifiCare consulted with a doctor at the University of Arizona medical school, who called Blackman's procedure "risky" and "experimental."

But that doctor never spoke to Blackman or reviewed Shawndra Lee's case. In fact, the HMO's administrators say they never sent any medical records to that specialist. And PacifiCare never told the Lees about seeking outside advice.

Six days after the hearing, the HMO denied the appeal, repeating: "[T]he medically appropriate procedure for your daughter's condition is available in network with contracted providers."

PacifiCare then sent the case on to the Center for Health Dispute Resolution, an independent review agency in New York. Under state law, this is the final step in the appeals process.

But Lee had had enough. He requested that the appeal be stopped while he considered his options, but it was too late. Within days of receiving the case, CHDR issued a ruling in favor of PacifiCare; the appeals process was over. For once in the glacial process, a decision had been made quickly.

Only then did the Lees learn that PacifiCare considered Blackman's procedure "experimental," and under the terms of the Lees' insurance policy, the HMO was not obligated to cover experimental procedures.

It was an important designation. Under Arizona law, CHDR is required to decide cases on the basis of "medical necessity." Although neither the Lees nor Blackman had an opportunity to present their views, CHDR agreed with PacifiCare that Blackman's surgery was "experimental," and the HMO was offering the "gold standard for Shawndra's condition."

New Times called other experts on scoliosis, including Dr. William Shaughnessy of the Mayo Clinic in Rochester, Minnesota, and Dr. Peter Newton of San Diego, who pioneered removal of vertebrae through the chest while treating scoliosis (which is a part of Blackman's method).

Both agree Blackman's approach is new, but both say it's viable for some patients. They have reviewed the procedure as presented by Blackman and other surgeons at conferences, and neither call it experimental or unnecessarily risky.

Without reviewing the case, neither physician wants to comment on the possible outcomes. And both caution that Blackman has not gotten the degree of correction desired in some cases. They say they are not endorsing Blackman's method for Shawndra.

But the one thing they are certain about is that delay has only made Shawndra's condition worse.

"Sooner or later, the HMO is going to end up paying for both [an anterior and a posterior approach]," Shaughnessy says. He explains that the worse the curve gets, the more it requires entering through both the front and back. "It runs about $20,000 to $30,000 to do either procedure alone," he says. "To do both, well, the HMO is going to double its own costs."

On March 23--almost seven months after Lee wrote his first appeal letter--PacifiCare sent one final letter to the Lees, telling them their appeals were now exhausted. The Lees estimate they had spent about $5,000 on airfare, long-distance phone bills and missed work to get the same answer they got at the beginning.

In closing, PacifiCare added, "We feel it important to stress that you not delay Shawndra's treatment any further."

PacifiCare stands by its decision. In a conference room at the top of the laser-blue glass tower of its Arizona headquarters, three of the company's officers recently defended their actions.

Dr. Elk, Daniel Geary, the director of health services for PacifiCare, and Geoff Jaroch, director of public affairs, sit behind a mirror-finish conference table. Jaroch apologizes that the other three medical directors who decided the Lees' case are not present. Those physicians declined to comment.

The men dispute the Lees story in only a few places. They say the Lees could have started the appeals process much sooner, which is true. And the men insist that PacifiCare made the best medical decision for Shawndra.  

The insurance company contends that the Lees got an answer in plenty of time; it simply wasn't the one they wanted.

PacifiCare controls costs by maintaining a network of providers who agree to accept fees set by PacifiCare. By signing on to PacifiCare, customers agree to stay within that network when they want to see a doctor. That's easy for colds and minor injuries, which can be treated by the primary care physician. But for anything more serious or complicated, the patient has to get a referral. If the care the patient wants is outside the network of doctors, then PacifiCare will consider paying the doctor even though it doesn't contract with that physician.

Jaroch says PacifiCare gets about five requests for out-of-network care per month. He says it covers about two of those--or about 24 a year.

What Jaroch doesn't mention is that this usually costs HMOs more money, because they don't have an agreement on fees with that physician. Inside the network, an HMO can bargain in large numbers and deal in bulk to keep prices low. The HMO might offer less to fix a broken arm than another insurance company, but it can promise to send enough patients with broken arms to a specialist to make it worth his while. Outside the network, there aren't any deals like that for the HMO.

So in the Lees' case, the real question for the HMO was: Is there a doctor in the network who can fix this girl's back?

"This was never a medical necessity issue," Geary says. "There was no reason for us to even think about another treatment. This was always about in the network or not."

Elk adds that Dr. White, who told the family they should choose the procedure they wanted, never said that to him. But even if he had, it wouldn't have changed the outcome.

"If [White] believes that patients have the right to choose the treatment they're going to have, I think it's fine for him to have that opinion," Elk says. "But health insurance does not always support any choice the patient wants to have."

The concern about the safety of Blackman's procedure was basically an afterthought. Elk and Geary say Blackman's surgery is too risky and unproven, but that concern was still secondary to the fact that doctors in the network could do a procedure that would work--even if it wasn't what the Lees wanted.

Elk concedes that none of the medical directors who decided the Lees' appeal have any experience with spinal surgery. He says they didn't consult a specialist for an opinion on Blackman's approach until the final appeal began because they already had opinions from McLean and White. And that specialist at the University of Arizona's medical school did not review any of Shawndra's records.

"I firmly believe that the best thing for Shawndra is to have the procedure done the way the specialists have recommended it," Elk says, adding that now four specialists--counting the one in New York who reviewed the case--have all said the posterior approach is standard. "It probably should have been done a long time ago."

This was the basis that the Lees' final appeal was decided on. Jaroch says this was sent to outside review before the Lees responded "as a courtesy to the family."

Cost never entered into it, the HMO officials say.
"I don't remember one conversation I had where the cost of the procedure ever came up," Elk says. "I don't even know what they cost, to tell you the truth."

But if cost was never an issue, why didn't the HMO just give the patient what she wanted?

"We could do that, I suppose," Geary says. "But we made a promise to our other policyholders that we would abide by the terms of their policies and keep costs down and cover their illnesses in this way. I suppose we could charge everyone $3,000 or more a year and be a traditional fee-for-service insurance company, but that's not who we are."

So what does it take to talk to the person actually making the decisions about your health care? Where does the buck stop?

Geary ponders that question for a long moment before he answers.
"There is no provision in our process that would call for interaction between the person complaining and a medical director, unless the medical director calls for more information," he says.

There aren't many places left for the Lees to turn. Their appeals are exhausted, and their remedies outside the system are few.  

Lee's struggle comes just as federal and state lawmakers are also grappling with questions over HMOs. Congress will debate a "patient's bill of rights," this session, with Democrats and Republicans offering competing versions. State legislatures are stepping in at the same time, tightening regulation of HMOs and passing laws designed to guarantee a fair appeals process.

Punitive damages against most HMOs are prevented by a federal law, the Employment Retirement Income Security Act (ERISA). Passed in 1974, ERISA was designed to protect employee retirement plans from frivolous lawsuits. But today, even if a jury sided with Lee, he'd get no attorney's fees or damages.

Arizona is supposed to be ahead of the class on this test. Last year, legislation passed that mandates an appeals process for decisions made about patient care--the same process the Lees struggled with.

This year, the Legislature tried again to pass a "Patient Protection Act" that would allow people like Lee to sue HMOs for punitive damages. But the right to sue was stripped out in committee.

Lee thinks the appeals process is a joke if patients can't sue HMOs for damages in court.

"So, what am I supposed to do?" Lee asks. "I could spend $50,000 in court, and get the operation paid for, maybe. I can't win."

National consumer advocates agree.
"If you don't have the threat of a lawsuit, you get treated shabbily," says Jamie Court of the Foundation for Taxpayer and Consumer Rights.

"HMOs are the only industries in the country that are immune from liability because of a quirk in federal law," adds Judy Waxman of Families USA, a national consumer group. "The industry says it would be too hard on them. Well, aren't lawsuits hard on General Motors? There has to be some accountability."

Lawsuits are the HMO industry's worst nightmare. The Arizona Chamber of Commerce, a powerful pro-business group, funded a hit campaign against legislators who supported this year's bill, sending out fliers deriding the proposed legislation.

The industry has good reason to be scared. In a California case last year, an HMO was sued for punitive damages using a loophole in the federal law. A jury awarded a widow $116 million because it denied her husband an experimental cancer treatment.

Even if the Legislature guaranteed the right to sue, it would be too late to do Shawndra Lee any good. David Lee has filed a complaint against the medical directors of PacifiCare with the Arizona Board of Medical Examiners (BOMEX). He says the HMO made medical decisions based on economics, rather than on what's best for the patient. He also accuses PacifiCare of unprofessional conduct for deceiving him and his family during the process. While other doctors have taken HMOs to task for failing to provide appropriate care, he is the first citizen to try to hold medical directors accountable for their actions. Most citizens don't even know they can file a complaint against doctors, let alone against the often faceless medical directors who decide what your insurance will pay.

But BOMEX's track record in this area isn't hopeful, either. While BOMEX was the first medical board in the nation to take action against a medical director of an HMO, in the six years since, it hasn't done anything more than once issue a letter of concern, an action that is nondisciplinary by law.

And in one case, BOMEX dismissed a complaint against PacifiCare, after a board member who works for the HMO recommended it. Last year, Dr. Edward Schwager led the investigation into an accusation that a medical director at PacifiCare ordered an elderly patient out of the hospital while the man was still sick. Schwager recommended dismissal of the complaint, and the board voted with him. But Schwager never disclosed his medical group's multimillion-dollar contract with PacifiCare. (Last month, Schwager's group dropped the contract for financial reasons.)

Schwager denied a conflict of interest. The governor's office promised an inquiry but never followed up. BOMEX officials say that they held an intensive conflict-of-interest training session for board members afterward.

Lee also filed a complaint against PacifiCare with the Department of Insurance. He got a response just a couple of weeks ago. DOI dismissed the complaint, repeating verbatim PacifiCare's reasons for denial.

But the Lees aren't giving up. "We're just going to keep fighting," Diane Lee says. "What else are we going to do?"

The Lees say they still want Blackman to operate on their daughter. "Both procedures are risky," Lee says. "But this is what Shawndra wants, and this is what I want for my daughter. I'm willing to take the chance if the recovery time is shorter, and the operation is better."

And Diane Lee is adamant that no one who works with PacifiCare will do the operation.  

"They will not touch my daughter," she says. "Even if they were to pay for it, I would still never let them touch my daughter."

Lee is now working with Blackman on a payment plan. He makes good money as an engineer, about $60,000 a year, but it's still going to be tight, especially with the expense of two households.

But that's why the Lees got insurance. They thought it would help them afford the best possible care for Shawndra.

"I just want to do what's right for my daughter," David Lee says. "That's all I really want to do."

Read more New Times' coverage of BOMEX

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