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Investigation Launched into Aetna Insurance Review Practices

Dr. Jay Ken Iinuma, a former medical director for healthcare giant Aetna, recently admitted in a deposition that he did not personally review medical records when approving or denying claims, instead relying on the recommendations of nurses.

This bombshell admission caught the attention of California Insurance Commissioner Dave Jones, who has opened up an investigation to see just how widespread this issue is at Aetna, the nation's third-largest insurance provider with over 23 million customers.

The deposition is the result of a lawsuit filed against Aetna in the state of California by Gillen Washington, a 23 year old college student. What has drawn the attention of California's top cop in the insurance industry, though, is not the particulars of Washington's case. Instead, his focus is on "the portion of [Dr. Iinuma's] deposition transcript in which he said as the medical director, he wasn't actually reviewing medical records," Jones told CNN.

From the deposition as quoted in the CNN article:

"Did you ever look at medical records?" Scott Glovsky, Washington's attorney, asked Dr. Iinuma in the deposition.

"No, I did not."

"So as part of your custom and practice in making decisions, you would rely on what the nurse had prepared for you?"

"Correct." 

Dr. Iinuma added that nearly all of his work was conducted online, and that he might call a nurse "zero to one" times over the course of a month for additional information.

The Problem with Dr. Iinuma's Admission

An insurance policy requires the good faith by both parties to the agreement. For the policyholder, this means an accurate and honest submission of claims. For the insurance company, this means, among other things, that they have a duty to thoroughly investigate each claim they receive and make a fair determination.

If this thorough investigation is not performed, that company hypothetically opens itself up to accusations of bad faith and wrongful denial of insurance claims.

Dr. Iinuma's admission that he did not personally examine medical records on claims he reviewed seems to imply that this basic duty of investigation was not met. Thus, he failed to make a fair determination on medical issues for Aetna policyholders. In a quote given to CNN, Dr. Andrew Murphy, a renowned fellow of the American Academy of Allergy, Asthma and Immunology, noted that "if [Dr. Iinuma] has not looked at medical records or engaged the prescribing physician in a conversation - and decisions were made without that input - then yeah, you'd have to question every single case he reviewed."

Dr. Iinuma's curious approach as a medical director will inevitably lead some to question the policies of Aetna as a company. Many of these questions will surface because Aetna is a publicly held Fortune 500 company. Decision makers at the top of the company have a fiduciary duty to make decisions and implement policy that is in the best interests of their shareholders. Plainly speaking, that means they have to maximize the profits of the shareholders. Prioritizing profits would suggest that the company and its shareholders benefit by costly medical treatment being denied.

Did the motivation to maximize profit in any way impact Aetna's approach to evaluating medical claims? Was Aetna aware of or complicit in Dr. Iinuma's practice of not personally reviewing medical records but instead relying on the recommendations of nurses? If so, how far beyond Dr. Iinuma did these practices go? To this end, Californians who believe they may have been wrongfully denied by Aetna are being asked by the Insurance Commissioner to come forward. Is this an issue confined to the state of California? It's not hard to see similar questions being raised in other states.

What stance has Aetna taken after this bombshell testimony was made public? For their part, Aetna announced in a written statement given to CNN that "Aetna medical directors are trained to review all available medical information - including medical records - to make an informed decision. As part of our review process, medical directors are provided all submitted medical records, and also receive a case synopsis and review performed by a nurse."

Wherever this investigation leads, it is clear that the findings will have major importance not just for Dr. Iinuma, but Aetna, the medical insurance industry as a whole, and the many people who may have newfound reason to be skeptical of past denials of their insurance claims.

Stay tuned, there is certainly more to this story.

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