No guarantee with guarantee of payments
Vanessa Rombaut looks into the issue of securing a GOP for overseas hospital treatment
With international travel growing in popularity, a fluid medical emergency insurance system has never been more vital. The frequent delays in issuing a Guarantee of Payment (GOP) are a well-known sticking point in an otherwise fluid and well-organised global travel insurance/assistance system. Delays in issuing GOPs are caused primarily by the background medical check to rule out pre-existing medical conditions, with communication problems between provider and payer running at a close second. Travel insurers in the UK help over 3,800 UK travellers per week, with a report from the Association of British Insurers (ABI) stating that £4 million per week was paid to cover the cost of medical emergency treatment last year. With the development of new technologies, such as Electronic Medical Records (EMRs), the potential to streamline background medical checks, cutting through days of back and forth, has never been closer. However, there’s the question of: is it worth the money to check the medical background of every hospitalised patient? Industry experts agree that the exclusion of pre-existing medical conditions from cover on some policies is the number one source of strife in the international travel insurance system. With independent dispute resolution services, such as the Financial Ombudsman Service in the UK, not uncommonly overturning underwriters’ decisions relating to policy exclusions regarding pre-existing conditions, how much financial sense do such exclusions make?
What causes the delays?
Let’s look at a real-life example that illustrates the complexities involved in the issuing of a GOP. Cheryl (name changed), a 67-year-old Australian woman, was on a cruise in Europe when she started to feel severe chest pains. The cruise ship offloaded her, and she was transferred to Vienna so she could receive medical attention, but the hospital was reluctant to admit her without first receiving a GOP from her insurance company. The assistance company was contacted; however, the policy she’d purchased had exclusions on pre-existing conditions. That’s when the trouble began.
For underwriters, making a difficult call in the face of lengthy delays might just be the most pragmatic approach
Cheryl’s underwriter wanted to contact her GP for a medical background check before sending a GOP, but because of the urgent nature of the case, they agreed to pay for medical expenses on a disclaimer basis, which Cheryl was asked to sign. However, Cheryl refused to sign the disclaimer, because she was worried she’d be stuck with a huge bill when she returned home. The hospital was unhappy because they had a sick patient they couldn’t treat, and the Australian underwriter couldn’t issue a GOP because their conditions hadn’t been fulfilled and they had an unhappy client in a serious situation.
Cheryl was then asked to sign a release of information form so that a background medical check could be carried out to rule out any exclusions – she refused.
It took almost 24 hours to convince Cheryl to sign the form, and another 12 hours to obtain the necessary medical background information. The information showed no relevant pre-existing conditions so the GOP was issued and treatment given. Upon discharge from the hospital, the patient was, however, unable to rejoin the cruise ship as it had departed for its next destination. The underwriter then had to foot the bill for cancellation of the trip and flights from Vienna to the patient’s home country. Delaying the GOP resulted in a much bigger bill for the insurer, a very unhappy patient and an unhappy hospital.
You may think that this situation is extraordinary, but unfortunately it’s a common occurrence. Issuing a GOP should be straightforward, but industry experts agree, it is often a twisted paper trail, marked by frustration.
Communication and expectations
Stuck in the middle, fielding communications between patient, hospital, and the underwriter, are the assistance companies. They are often outsourced, and work on behalf of several different insurance providers, so they may not have in-depth knowledge of the particular patient’s policy wording and, hence, the insurer’s coverage. Obtaining hospitalisation approval is, in any case, often not straightforward, says Natalya Butakova, business development manager at AP Assistance in Russia. “Hospitalisation has to be approved by the insurance company and this can really delay the procedure,” she told ITIJ: “The longer it takes, the more dissatisfied the patient is.”
Waiting for paperwork is not the only problem. As not all insurers, or indeed assistance companies, are available 24 hours, patients can be left waiting until business is open the next working day to reach these providers.
With the development of new technologies, such as Electronic Medical Records, the potential to streamline background medical checks, cutting through days of back and forth, has never been closer
Assistance companies also operate under the guidance of their medical team, and while everything is done to reach a speedy consensus, it doesn’t always happen in a matter of hours. However, hospitals are pressed for time – often with a patient who is sitting literally in front of them in need of medical care – and they need to know who’s going to be picking up the bill at the end of the treatment, says Sveta Yankovskaya from Beijing United Family Hospital in China. “We have to wait because it’s a financial risk,” said Yankovskaya. “If we do the procedure without a GOP or a credit card from the patient we may never get paid. The patient could be a tourist travelling, so we won’t see them again.”
Cultural differences – in the form of differing national laws and regulations – are also a source of tension between medical providers, tourists and international insurance companies. Yankovskaya says this is a problem she sees frequently: “International providers don’t follow Chinese regulations. It is very difficult to explain to them that it’s different here, and that we have to follow the Chinese regulations, not their regulations.”Indeed the laws of each country, such as the strict privacy laws surrounding the disclosure of medical information in countries like the UK and Australia, can hinder efforts to obtain necessary background medical information and further delay a GOP. In the UK, for example, insurers are prohibited from requesting a patient’s full medical records (See ITIJ’s News Analysis, Access denied, on p18); they instead have to send a questionnaire to the patient’s GP or request a specific medical report to determine the information they need. “GPs in the UK don’t have time to do what is needed to be done,” said Julie Remmington, a travel insurance industry expert and consultant for ACE Travel Insurance. “It’s not unusual to wait three to four days for a reply.”
Medical history check and pre-exs
The general practitioner (GP) check is a notorious chink in the system and the cause of many delays. It’s not uncommon for patients to refuse to sign these information release documents, even if it means delaying their treatment. This problem is also compounded if the patient is unconscious or in a critical condition, in which case a signed consent form is difficult or impossible to obtain.
Ole Ærthøj, managing director of safeAway A/S in Denmark, said that in critical situations, common sense should reign: “Underwriters have to use their common sense. I understand GPs have to protect information, but there are two sides to this issue. We’re very much here protecting the patient. He’s had an accident, he might be unconscious, the hospital might not know anything about him, in these circumstances you need practical people (i.e. people who will act in the face of emergency, such as issuing GOPs, or GPs that will divulge medical history even without explicit consent from the patient).”
an extensive network is key to both improving communication and ensuring timely approvals
For underwriters, making a difficult call in the face of lengthy delays might just be the most pragmatic approach. “From an underwriter’s point of view, if you can explain to the underwriter why you need something and can’t get the release forms you need, then it’s best to be pragmatic about it [and just issue the GOP],” continued Ærthøj. “Let it be the Prime Minister’s daughter lying in hospital in India, then we’ll see if all those polices (privacy laws that hinder access to medical history) are what they really want.”
Even if the patient is physically able to consent to the release of their medical history, GPs are overworked and a medical history check is quite low on their to-do list. GPs, particularly in the UK and Australia, can also demand an upfront fee before entertaining the idea of writing up a medical report, which causes further delays. With the days adding up and a patient in hospital, insurance companies face a huge bill, which further calls into question whether or not it makes financial sense to do a background medical check in the first place.The policy exclusion of pre-existing conditions is the area most commonly under scrutiny for complaints, according to Lena Nunkoo from the UK Financial Ombudsman Service, which receives around 50 complaints per week from people about their travel insurer. “The most common type of travel insurance complaint we receive is about pre-existing medical conditions and non-disclosure of these,” confirmed Nunkoo, adding: “The majority of these do come from older people.” Nunkoo warns that complaints of this nature are set to rise as more people purchase their travel insurance from comparison websites, which often ask about pre-existing conditions, but rely solely on consumer answers to an online questionnaire, which can often be fairly simplistic in nature. “Even if we think this is a careless misrepresentation – so not deliberate or fraudulent – the underwriter of the policy would never have offered them that particular policy [had a full and proper declaration been made],” said Nunkoo. However, even in such a situation, the FOS ‘can’t ask the consumer to make any payment towards a claim’, she added.
What are some possible solutions?
So far, the solutions put forward by insurance providers have been makeshift and have yet to become an industry-wide standard. Butakova of AP Companies says that having an extensive network is key to both improving communication and ensuring timely approvals: “We have over 30,000 providers around the world with written agreements in place. Where there are volumes of patients, such as in Western locales, there is a much better working agreement.”
Yankovskaya agrees that familiarity with companies and their policies is key: “We try to work with insurance companies we know, and get to know their products better.”
Many insurers, such as World Nomads Australia and Assistance International in the UK, have begun to create their own in-house assistance companies, says Lisa Fryar of WE Assist Australia. She told ITIJ: “This really helps with delays in GOPs; I have direct access to the insurer to approve urgent issues. We have up-front medical screenings for elderly travellers and if we need to get medical history urgently, we facilitate calls through to GPs to get it. This reduces the time to rule out pre-ex and issue a GOP.”
EMRs have long been held as the Holy Grail that could end all delays related to medical history checks. “It’s a brilliant idea,” said Remmington, “and could work if it gets out of the pilot stage, but will it happen in the next five to 10 years? I don’t think so.”
Launching EMR technology isn’t without its own special set of problems. Unlike its more lucrative counterparts, home and motor insurance, leisure travel insurance doesn’t have the resources or infrastructure to make it worthwhile to upgrade the technology. “It’s a small part of people’s portfolio,” Remmington added. “It’s a low-value product really, if you’re only going to get £20 per policy, you won’t invest money in a sales process.” It also still doesn’t address the strict privacy laws, which hinder access to the medical information.
Stuck in the middle, fielding communications between patient, hospital, and the underwriter, are the assistance companies
Some further ideas include online verification systems that detail the scope of the policy and any exclusions, or dropping GP checks entirely. By analysing the amount of time required to do GP checks and comparing this to the medical costs that add up while they are being carried out, insurers may find that this could amount to more than the claims that could ultimately be declined. Paying two or three unnecessary claims might not add up to anywhere near the cost of having a client in hospital for a few extra days. Underwriters could ask themselves what costs are accruing every day until they’ve got the report? And how many do they ultimately decline?
Innovation key to success
The challenge of guaranteeing payments to medical providers, while protecting an insurer’s bottom line, is a challenge that isn’t going to go anywhere fast. What’s going to change this situation? Most of all, said Remmington, the industry needs a shakeup. “I think our industry needs an innovator,” she explained. “Someone to be brave and step up to the mark and do something different. We’re all a bit like sheep; somebody does something and we all do it. If one insurer was brave enough to say, I’m going to change how I’ll sell travel insurance, the rest will have to step up.”
If the travel insurance industry is to innovate, then it needs an innovator willing to take risks in an industry that is notoriously risk averse.