4 MR. GOTTFRIED: And we think we now

5 have the connection with the Attorney General. We're

6 connected to his office. They're getting him to the

7 phone, I think.

8 Okay. Is this Mr. Blumenthal?

9 HONORABLE RICHARD BLUMENTHAL, ATTORNEY

10 GENERAL, STATE OF CONNECTICUT: Yes. My name is

11 Richard Blumenthal; I'm the Attorney General of

12 Connecticut. And I'm here with Tom Ryan, who is an

13 Assistant Attorney General in my office.

14 MR. GOTTFRIED: Okay.

15 MR. BLUMENTHAL: And I'm very pleased

16 to be with you today. I'm sorry I can't join you in

17 person.

18 MR. GOTTFRIED: Okay. I'm Richard

19 Gottfried. I chair the Health Committee in the New

20 York State Assembly. And we have the practice of

21 swearing in all of our witnesses before they testify.

22 I don't know what the protocol is on doing that by

23 phone, but we'll try it anyway.

24 RICHARD BLUMENTHAL; Sworn

25 MR. GOTTFRIED: Okay. Very good.

63

1 Thank you very much.

2 MR. BLUMENTHAL: And, once again, I

3 thank you for having me in this way and being so

4 flexible. I have some experience in the area that

5 you're covering in your hearing. And I know that you

6 are probably running a bit late, so I'm going to be

7 brief in describing what we've done here in

8 Connecticut regarding Lyme disease, and particularly

9 the legislative mandates that we've adopted regarding

10 insurance coverage.

11 I should say that in October of 1998, I

12 created a health care advocacy unit in my office to

13 address a burgeoning number of consumer complaints

14 about health insurance and particularly managed care.

15 At the time we created that unit, Lyme disease

16 complaints accounted for about 20 percent of all the

17 complaints that we were receiving, and I was really

18 quite alarmed by that percentage. I directed the

19 unit to investigate the potential reasons for those

20 high levels of Lyme disease complaints, and what we

21 found is -- very bluntly, is that there were a series

22 of disturbing practices and trends within the

23 insurance and medical community regarding this

24 disease. Most alarming, what we found was a pattern

25 of insurer denials of coverage following the single

64

1 day -- the single 30-day course of antibiotic

2 treatment, even in the cases where positive blood

3 tests indicated continuing infection. And I must

4 say, all of Connecticut's health insurers seem to

5 share this restrictive standard of coverage which, as

6 you might imagine, was financially beneficial to

7 them.

8 So, as we received more and more of the

9 Lyme-related complaints, the underlying medical

10 dispute over diagnosis and treatment emerged as well.

11 And I was at first struck by the polarizing nature of

12 this dispute - you may have encountered it in your

13 own experience - and came to understand that it

14 really had a chilling effect on the normal discourse

15 and debate that is so important, in fact, fundamental

16 to medical progress.

17 I had a hearing in February of 1999, a

18 formal hearing such as you are now having, a day-long

19 hearing, invited all of the medical and insurance

20 experts in the state, along with patients, activists.

21 It was really quite an educational experience for me.

22 Did it with our Insurance Commissioner, and I think

23 it was instructive for him as well. And that

24 transcript, although it's now somewhat out of date,

25 is available in case you're interested.

65

1 And I would just briefly say that I was

2 struck by three basic points of agreement among the

3 participants. Even though they differed, there was

4 agreement on three basic points.

5 The first was that Lyme disease is an

6 illness that is treatable with antibiotics in its

7 initial phase - in fact, easily treatable in the

8 initial phase - but may require more extensive

9 antibiotic treatment if it is allowed to reach a

10 later stage of infection.

11 The second point, that Lyme disease in

12 its advanced stages can affect a wide variety of the

13 body's essential systems, its essential organ

14 systems, including the circulatory and the central

15 nervous system.

16 And the third point on which there

17 seemed to be consensus was that Lyme disease required

18 a clinical diagnosis, because there's no absolute

19 test that can be used for diagnostic purposes. And I

20 might say on the third point there was also agreement

21 that Lyme disease is capable of defying basic

22 neurological testing and that, as a consequence, the

23 CDC, the Center for Disease Control, doesn't consider

24 the application of its own conservative reporting

25 standards to be authoritative, because they rely on

66

1 blood testing and so they don't regard it as a proper

2 basis necessarily for clinical diagnosis.

3 Now, one of the participating medical

4 directors indicated at the hearing that his company

5 did, in fact, apply these conservative CDC standards

6 in its review of request for coverage of IV

7 antibiotic therapies. I was alarmed by the fact that

8 this insurer was applying standards that the CDC

9 itself said were not appropriate for that purpose.

10 And I was also alarmed that the testimony made it

11 clear that the insurance companies were consistently

12 overriding the diagnoses and prescriptions of

13 treating physicians, despite the fact that a

14 third-party medical necessity determination required

15 deference be given to the opinion of the treating

16 physician. And I might say, as a matter of personal

17 philosophy, the basic approach I've taken to all of

18 these potential mandates, all of the issues involved

19 in managed care, really is that these decisions

20 should be made by the treating physician and the

21 patient without the intrusion or interference of

22 third-parties, so to speak.

23 So, at any rate, to come to the

24 conclusion, this hearing really crystallized for me

25 the need for action in the form of legislation to

67

1 reverse the insurance company behavior, the denial of

2 coverage where it seemed to be appropriate as judged

3 by the treating physician. And we drew up the

4 legislation to require coverage for treatment of Lyme

5 disease and to make the opinion of the treating

6 physician controlling in questions involving medical

7 necessity of recommended treatment.

8 Our original language was modified in

9 the legislative process, but I really think that the

10 final enactment has made enormous progress and meant

11 enormous benefits for consumers and patients. It's

12 codified, as you may know, at 38-A 429(h) and Section

13 38-A 15(h) of our Connecticut general statute.

14 Basically, it requires coverage for not less than 30

15 days of intravenous antibiotic therapy, 60 days of

16 oral antibiotic therapy, or both; and requires

17 coverage for additional care, if recommended by a

18 physician board certified in neurology, infectious

19 disease or rheumatology. So, it's a pretty simple

20 provision, but it has made an enormous difference in

21 coverage here in Connecticut.

22 Just to give you one sort of anecdotal

23 piece of evidence, I mentioned earlier that the

24 caseload of our Health Advocacy Unit was about 20

25 percent Lyme disease related when we started; it's

68

1 now down to about one percent. We're doing more

2 cases, but now only a fraction of them concern Lyme

3 because the coverage has improved so enormously. And

4 I might say that of that one percent, a majority of

5 complaints have involved self-funded health care

6 plans which, as you know, are subject to federal law,

7 ERISA, and that's beyond the reach of our state

8 insurance law; and the remaining recent complaints

9 involve state-regulated insurance policies, which

10 have in our experience been resolved fairly quickly

11 and easily without the need to resort to protracted

12 and futile health plan appeals.

13 So, I think that Connecticut has

14 effectively reduced insurance coverage issues

15 relating to Lyme. I understand that it cannot

16 eliminate the medical controversy underlying

17 divisions over diagnosis and treatment of Lyme

18 disease. I think there are future developments that

19 may address the medical controversy. The first is

20 the development of resolve within the medical

21 community, encouraged and supported by state and

22 federal organizations, to open the channels of

23 communication among and between physicians who are

24 experienced in treating Lyme, along with research

25 scientists; and the other is the development of an

69

1 accurate and dispositive test for Lyme disease. If

2 we had such a test, it would eliminate a lot of the

3 controversy about whether infections have occurred

4 and whether it persists beyond the course of

5 treatment.

6 But in the meantime, I think

7 Connecticut's legislative approach to addressing the

8 imposition of health insurers' arbitrary and

9 restrictive coverage caps in the treatment of Lyme

10 disease has been effective. And I have great respect

11 for members of the medical community who have stood

12 up and spoken out in favor of their patients to help

13 us in extending this kind of coverage. They've added

14 to the debate and they've improved the process. And

15 I think that we need to be careful in the way that we

16 resolve complaints about doctors who may favor a more

17 aggressive treatment protocol for Lyme disease,

18 especially in the absence of a scientific consensus.

19 Because I certainly remain very, very justifiably

20 humbled about my own ability to say what's right or

21 wrong in the field of medical treatment, which comes

22 back to the point that I made earlier: That these

23 are decisions that should be made by the physician

24 and patient, not by some third-party who intrudes in

25 that decision.

70

1 So, that's pretty much our experience,

2 and I hope it's helpful.

3 MR. GOTTFRIED: Okay. Thank you very

4 much. I have a couple of questions, and I think some

5 of my colleagues may have some questions.

6 MR. BLUMENTHAL: Sure.

7 MR. GOTTFRIED: First, just a couple of

8 paper things. It would be very helpful if your

9 office could send us copies of the Connecticut

10 legislation that you talked about --

11 MR. BLUMENTHAL: I'll do that. Sure.

12 MR. GOTTFRIED: -- as well as -- you

13 mentioned a transcript of your 1999 hearing. And I

14 don't know if there was a report on the hearing, or

15 just a transcript, but if you can send us --.

16 MR. BLUMENTHAL: We would be happy to

17 provide comments -- we would be happy to provide

18 copies to you.

19 MR. GOTTFRIED: Okay. Thank you.

20 My other question is: What is the

21 situation in Connecticut with physician discipline

22 cases relating to Lyme treatment? Is that going on?

23 Do you have an opinion on what is happening there?

24 MR. BLUMENTHAL: I would say, at the

25 risk of being over simplistic, we have virtually no

71

1 cases of physician discipline involving Lyme

2 treatment.

3 MR. GOTTFRIED: Okay. Has that

4 changed? Was there a period when there was some of

5 that going on?

6 MR. BLUMENTHAL: There was a time when

7 this issue within the medical, I think, prompted

8 threats. That may be too strong a word. But there

9 were claims on the part of some doctors and they were

10 claims made informally. For example, they would say

11 off the record to me, in conversation, or to others,

12 and I would hear it secondhand, that this doctor or

13 that doctor was overly aggressive, that he or she was

14 providing improper treatment. In fact, one doctor

15 was investigated, as I recall, and was ultimately

16 cleared.

17 And I think, by the way, the

18 legislation that we past really reduced the level of

19 contentiousness on this issue. It sort of removed

20 the fire point or the point of friction, and I don't

21 think we've had serious claims -- any serious claims

22 since the legislation has been passed.

23 MR. GOTTFRIED: That's very

24 interesting. When did this legislation become law?

25 MR. BLUMENTHAL: Let me see if I can

72

1 remember exactly.

2 MR. GOTTFRIED: Roughly?

3 MR. BLUMENTHAL: We had the hearing in

4 '98, and it was passed in January of 2000. January

5 2000.

6 MR. GOTTFRIED: Okay. Thank you.

7 Do any of my colleagues have questions?

8 MS. O'CONNELL: Just one question.

9 This is Assemblywoman Maureen O'Connell. I have a

10 question with regard to the legislation limiting the

11 treatment to that of a neurologist, infectious

12 disease specialist or rheumatologist. Would there be

13 any reason to limit -- would there be any prohibition

14 on expanding that to include practitioners who may be

15 now the experts in treatment of Lyme disease but not

16 necessarily engage in the active practice of, you

17 know, epidemiology or neurology? Do you have any

18 opinion on that?

19 MR. BLUMENTHAL: I can give you an

20 opinion. My opinion is that -- and I say this with

21 all due respect to a legislature of a fellow -- a

22 sister state, so to speak: You can do whatever you

23 want so long as the physician or the practitioner is

24 certified in a particular area. We happened to

25 choose these areas because they seem to related to

73

1 the particular disease. But I think if science has

2 advanced beyond the point that it was then and there

3 are now specialties that would be appropriate, you

4 certainly could write them into the legislation.

5 MR. GOTTFRIED: This is Mr. Gottfried.

6 Let me interject. As I understood your description

7 of the law, the board certification question comes in

8 only at the point where the physician's recommended

9 treatment is being given sort of an automatic

10 override of the insurance company's judgment --

11 MR. BLUMENTHAL: Well, I --.

12 MR. GOTTFRIED: -- is that correct?

13 MR. BLUMENTHAL: I went through it

14 pretty quickly, so let me go back through it again.

15 I think you have it basically right.

16 The law requires coverage for not less

17 than 30 days, IV therapy, or 60 days of oral

18 antibiotic therapy, or both. It required coverage

19 for additional care if it's recommended by a board

20 certified neurologist, infectious disease specialist

21 or rheumatologist. So, in other words, if you're a

22 patient, you go to your doctor, he or she says you

23 need more than the 30 days or the 60 days, if the

24 insurance company says, fine, we'll cover it, then

25 there is no need to go to one of these specialists.

74

1 If there is some disagreement - which, by the way,

2 there has been in diminishing numbers in our

3 experience - then you can go to a board certified

4 neurologist, infectious disease specialist or

5 rheumatologist. And if that doctor recommends it,

6 then the insurance company has to go along with it.

7 Is that clear? I'm sorry if I'm

8 confusing you.

9 MR. GOTTFRIED: No, I think that's

10 clear. Yeah. Thank you.

11 Other questions?

12 MS. MAYERSOHN: Yes, I have a question.

13 Assemblywoman Mayersohn.

14 I'm just curious, because there seems

15 to have been some concern expressed that the

16 insurance companies are fearful that they're going to

17 go bankrupt. Did that happen, in fact, in

18 Connecticut? Have insurance companies moved out of

19 the state or gone bankrupt or whatever?

20 MR. BLUMENTHAL: Well, the insurance

21 companies and HMOs, as you well know, have their

22 financial problems, but they -- certainly none have

23 gone bankrupt. In fact, some of them are doing quite

24 a bit better than they were -- you know, this area is

25 a very complex and challenging one. But some of

75

1 those that were most enlightened in their reaction

2 are doing better. Anthem decided, in fact -- I'm

3 glad you raised this point. Anthem decided recently

4 that it would no longer require any prior

5 authorization for IV therapy. In other words, it

6 took its experience with Lyme disease where it

7 extended the coverage and made that a general

8 practice regarding IV therapy, so that we no longer

9 have as part of utilization review the requirements

10 for prior authorization in Anthem's dealings with

11 patients.

12 Or to put it a different way, a lot of

13 what the critics of managed care have been saying,

14 namely, that it costs more to do the bureaucratic

15 second-guessing and oversight, actually has proved

16 true, I think, for some of the -- some of their --

17 some of the managed care organizations. And as a

18 matter of its own economic decisions, Anthem decided

19 that it would no longer do prior authorization review

20 for any IV therapy, including Lyme.

21 So, in a way, I think we have -- we've

22 done something. We've persuaded Anthem and some of

23 the other insurers to do something good for

24 themselves. That's kind of a long-winded and awkward

25 answer, but I think --

76

1 MS. MAYERSOHN: It's a great answer.

2 MR. BLUMENTHAL: -- that the basic

3 point is that eliminating some of the bureaucratic

4 second-guessing, some of the structure - that has its

5 own expense - may be good for the insurers and the

6 managed care organizations in the long run.

7 MS. MAYERSOHN: Thank you. I have just

8 one other question.

9 When you first had your hearing and

10 sort of presented what you were trying to do, was

11 there any interference by any -- what were your

12 obstacles? Because this is what we're looking ahead

13 to. Were the insurance companies a factor? Did they

14 try to oppose what you were trying to accomplish?

15 Was the medical -- the OPMC involved? I wonder if

16 you could sort of give us some help in that

17 direction?

18 MR. BLUMENTHAL: Well, the obstacles

19 were really, number one, for us, understanding the

20 science when the scientists themselves were mystified

21 and baffled by many of the cases they saw. I mean,

22 as you well know, Lyme is -- can be exceedingly

23 difficult to diagnose. There is no absolutely

24 fool-proof diagnosis, and so simply understanding the

25 disease was an obstacle for a layman like myself.

77

1 And then, I think, gathering all the

2 information -- because at that point there was much

3 more anecdotal information than there was actual

4 statistical information. Back in 1998, the

5 consciousness of Lyme disease and the credibility of

6 people who were concerned about it was less than it

7 is now. So, there were people who were dismissed as

8 sort of crackpots or extremists because they saw --

9 because they referred to Lyme as an epidemic, which

10 we came to see it as really being, at least in

11 Connecticut -- certain parts of Connecticut, it is a

12 very, very common disease and desperately

13 underdiagnosed.

14 So, I think that there were those

15 obstacles, and then there were some opponents. The

16 medical -- some of the medical community opposed more

17 extended coverage, but mostly it was the insurers and

18 the HMOs who felt economically threatened by a

19 potential mandate on this disease and, as a matter of

20 general principle, felt that there should be no

21 mandates that required coverage of certain kinds of

22 treatments or procedures. And they have adopted that

23 stance generally, whether it's -- regarding the

24 drive-through deliveries or mammographies or -- I

25 mean, you're -- as members of this committee, I'm

78

1 sure you're familiar with the arguments that are made

2 by the insurers.

3 MS. MAYERSOHN: Thank you.

4 DR. MILLER: Hi. This is Assemblyman

5 Joel Miller. Let me just congratulate you. At this

6 point, we can give you an honorary M.D. degree. You

7 seem to understand this disease more than most of the

8 physicians in New York state.

9 MR. GOTTFRIED: You should understand,

10 Dr. Miller is a dentist, so giving out M.D. degrees

11 doesn't mean that much to him.

12 DR. MILLER: Getting back to the points

13 that Maureen O'Connell was making about the

14 difference specialists. You see that in spite of the

15 fact that we share a common border, we don't share

16 the same view of Lyme disease. The one

17 rheumatologist that I knew well sent me a letter

18 saying he could never support me again because I was

19 supporting the - quote, unquote - Lyme doctors. The

20 infectious disease specialist in our area, who is

21 also a friend of mine, told me I would rue the day

22 that I supported the Lyme disease doctors. And so

23 that's two of the specialists that we have to knock

24 off the list.

25 But it's certainly -- and the other

79

1 point, of course, is that, you know, sometimes you

2 have people fighting their own best interests. It

3 has to be a lot less expensive to treat a disease as

4 early as possible to prevent it from getting as bad

5 as it can. And so, in spite of themselves, the

6 insurance companies and HMOs would probably be better

7 off if they agreed to treat this disease when it was

8 most easily treated, rather than wait for the end

9 line of this disease, which is incredibly expensive,

10 not to mention the costs that you incur if you have

11 to put people who could be productive into nursing

12 homes because you failed to provide any treatment for

13 them at all.

14 So, I applaud you in Connecticut. You

15 can get a job here any time you want.

16 MR. BLUMENTHAL: I appreciate those

17 remarks, and I think you said it much better than I

18 did, which is -- you made the point much more

19 eloquently, certainly, than I did, which is that, you

20 know, in a sense, good medicine and humane treatment

21 of patients and consumers often can be good business

22 for these HMOs and insurers. And I've often joked,

23 although we -- as you may know, we have actually sued

24 four of our HMOs in federal court -- that I would

25 drag them kicking and screaming into greater

80

1 profitability. Because I do think that - you put it

2 quite well - often, by treating early or adopting

3 preventative medical care, in the long run there's

4 less expense.

5 So, I think that our law is

6 well-balanced. It provides for some checks against

7 some of the potential abuses that the insurers are so

8 fearful of having, but at the same it provides

9 fairness and really, again, preserves the essential

10 relationship of the physician and patient.

11 MR. GOTTFRIED: Okay. Thank you very

12 much. I think that's all the questions we have. On

13 behalf of the Committee, I want to thank you very

14 much for your superb testimony and for being with us

15 today, even if just electronically.

16 MR. BLUMENTHAL: Well, I hope you'll

17 give me a rain check on appearing before you. I'd

18 love to have the opportunity to meet you, and we hope

19 to cooperate and help you in any way that we can.

20 MR. GOTTFRIED: Very good. Thank you

21 very much. Bye.

22 Okay. Our next witness is Dr. Alan

23 Muney, who is the Chief Medical Officer of Oxford

24 Health Plans.