Private medical insurers are refusing claims for treatment, because policyholders can get treatment on the NHS
Private medical insurance (PMI) is taken out by one in ten members of the public, either privately or through a work scheme to help cover private medical bills. In fact, in 78 per cent of cases PMI is funded through an employer, making this type of insurance an important ‘perk’ for employees.
Private medical can be so important to some policyholders that they even forgo certain luxuries to try to keep the policy in place for as long as possible. PMI might be deemed a luxury by the tax man, but for a significant number of policyholders it’s a necessity, not a luxury. Private individuals or small businesses are determined to keep their PMI cover even when they get to an age where the insurer tries to price them out of the market, further showing the importance these policies have on the decisions they take.
Asking policyholders why they take out PMI, the vast majority reply by stating that the ‘level of service and flexibility’ of seeing consultants at times suitable to them, including evenings or weekends is a main priority. Older policyholder’s priority is the ability to have operations without having to suffer in pain or discomfort whilst they slowly move up an NHS waiting list.
Once you take out one of these policies you are reassured that almost all illnesses or medical conditions in the event you need to claim because of an accident or illness are covered. There are the obvious pre-existing condition exemptions, as well as IVF or gender reassignment, but in the main these policies give peace of mind and convenience without the hassle of waiting on NHS waiting lists. Or do they?
Last year, 2015, the Daily Mail highlighted the case of a policyholder, Michelle Booth, 47, a former healthcare assistant from Oakley, Hampshire. Mrs Booth had damaged her left knee after she slipped on a patch of oil at a petrol station in 2014. Knowing she needed medical treatment for the resulting injury she sought the advice of a private surgeon through her private medical insurance policy.
Mrs Booth surgeon originally suggested that treatment for her knee injury should be a fresh frozen autograft. This procedure involves removing the damaged cartilage and bone, replacing them with donor cartilage and bone, which then overtime grow in the space left behind.
This type of procedure has been performed by surgeons for around 20 years, but is only available via private treatment as it’s not yet available on the NHS. The cost is estimated to be around £10,000, but her insurer said it was ‘experimental and unproven’, therefore the approval for them to pay for the treatment was refused.
Having refused her surgeons first-choice of treatment, Mrs Booth’s private medical insurer, AXA PPP, was then asked to fund a HemiCAP procedure. This type of operation consists of a metal disc being inserted into the knee to fill the worn-out surface of the joint, making it smooth again. Operations such as these have been carried out on over 70,000 people around the world – 350 people in the UK alone. Her surgeon believed it was ideal for Mrs Booth, especially given her age and the relatively small area of damage.
With everything in place the operation was planned for June 2015, with the assumption that her insurer would fund the operation and subsequent costs. However, just two days before her operation AXA PPP said they would not fund it because again the procedure was ‘experimental and unproven’.
Speaking at the time, Mrs Booth told the Daily Mail: ‘I couldn’t believe it when they said they wouldn’t pay for the second procedure either, especially as my surgeon told me it was widely available on the NHS.’
‘It was exasperating but the insurance company refused to budge, even though I was and still am in excruciating pain – I take tramadol painkillers three times a day. I feel like a junkie waiting for my next fix – it’s awful. Added to that I have to wear a brace on my leg and even then it keeps locking and giving way.’
Her surgeon, one of 150 in the UK who is trained to do the operation, was unable to proceed because AXA PPP refused because it did not think the treatment would be effective.
This type of operation was not actually endorsed by the National Institute for Health and Care Excellence (NICE) – the body that approves NHS treatment. However, not having NICE approval still enables individual NHS trusts to provide non-approved procedures and drugs to patients, and in Mrs Booth’s case her treatment was freely available on the NHS, with hundreds of NHS patients benefiting each year from this type of operation.
AXA PPP did however agree to pay for a more invasive procedure with a longer recovery time. They approved to cover the £10,000 cost of a partial knee replacement, even though her surgeon considered this operation ‘inappropriate’, especially given the small area of damage the fact the rest of the joint was in good shape
The resulting stalemate between Mrs Booth and AXA PPP resulted in her being forced to wait five months to have her surgeons second choice operation (HemiCAP) on the NHS. But, Mrs Booth is not alone and she is just one of thousands of policyholders who have their claims rejected every year by private medical Insurers because they could have the treatment on the NHS.
The fact these policyholders could be in severe pain or discomfort and are in too much pain to join a long NHS waiting list doesn’t matter. The fact they have paid premiums based on being covered for private medical treatments makes no difference either to insurers.
Not happy at the fact she had to wait in severe pain and discomfort after AXA PPP refused to pay the £6,000 to go private, Mrs Booth then took the case to the Financial Ombudsman Service (FoS). The case raised questions about the restrictions being imposed by some private health insurers and whether or not these decisions were complying with the private medical insurance.
Having now reached a decision in what is being termed a high-profile “precedent”, the FoS has ordered that AXA PPP should pay Mrs Booth £2,000 in compensation for her pain and suffering while on the NHS waiting list. The compensation is a result of the ombudsman also ruling that her insurer should have funded the procedure.
Ombudsman Chantelle Hurn-Ryan said AXA PPP had unfairly refused to pay for £6,000 knee surgery that is carried out on hundreds of NHS patients each year, with Mrs Booth stating ‘The decision has righted a wrong.’
Mrs Hurn-Ryan said in the ruling: ‘Mrs Booth’s specialist said he found AXA’s decision to be very confusing, as over 70,000 of these procedures have been carried out over the last 12 years.’
Commenting on the decision AXA PPP said: ‘The treatment proposed for the member is done by few surgeons in the UK and has not been assessed by the National Institute for Health and Care Excellence as being proven to be safe and effective.’
Brian Walters, of health insurance broker Regency Health in Cheltenham, said: ‘This ruling might make insurers who refuse to fund treatments available on the NHS reconsider.’
A spokesman for the Private Patients’ Forum added: ‘This case and the ruling by the Ombudsman will help many other patients get fair treatment under their insurance.’
However, considering the ruling and the opinions of experts and campaigners, this ruling may be overturned in future cases brought to the Financial Ombudsman Service. A spokesman for the Ombudsman said: ‘Just because a treatment is available on the NHS it doesn’t mean the insurer should automatically meet the claim. We look at all the evidence, including the policy wording, consultant reports and evidence of clinical trials or NICE approval.’
Leaving the last word to Mrs Booth, she told the Daily Mail: ‘It was never about the money, but the principle that patients with private health insurance should be able to receive the treatment their doctor recommends, not the treatment the insurer recommends.
Mrs Booth concluded by saying: ‘It is ridiculous that private health insurers refuse to fund procedures available on the NHS.’