California Launches Investigation Into Stunning Admission by Insurance Company Medical Director

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Insurance companies are often pressed to defend their decision making processes about who does and who doesn’t get approved for coverage. They rarely answer the questions. Now, one doctor has been compelled to answer questions under oath, and what he’s admitted has shaken up the industry.

The doctor, who worked for Aetna, admitted that he didn’t look at patients’ medical records when deciding if the company would provide specific medical coverage for surgeries and treatments.

Dr. Jay Ken Iinuma, who served as medical director for Aetna for Southern California from March 2012 to February 2015, admitted under oath that he never looked at patient records when approving or denying care.

The admission has California’s insurance commissioner’s attention. He’s launching an investigation into Aetna.

“California Insurance Commissioner Dave Jones expressed outrage after CNN showed him a transcript of the testimony and said his office is looking into how widespread the practice is within Aetna,” CNN writes.

“If the health insurer is making decisions to deny coverage without a physician actually ever reviewing medical records, that’s of significant concern to me as insurance commissioner in California — and potentially a violation of law,” Jones said.

Aetna is the nation’s third-largest insurance provider. The company provides coverage for  23.1 million people. A spokesman told CNN the company welcomes “explaining our clinical review process” to Commissioner Jones.

Dr. Iinuma, defending his statements, claimed he was following Aetna’s company policy. Doctors don’t handle the records. Those are read by nurses. The nurses make recommendations to the doctors.

This doesn’t sit well with many, including the California Commissioner. Jones thought “that physicians would be reviewing treatment authorization requests.” He was shocked that Dr. Iinuma, “during the entire course of time he was employed at Aetna, he never once looked at patients’ medical records himself.”

“It’s hard to imagine that in that entire course in time, there weren’t any cases in which a decision about the denial of coverage ought to have been made by someone trained as a physician, as opposed to some other licensed professional,” Jones told CNN.

“That’s why we’ve contacted Aetna and asked that they provide us information about how they are making these claims decisions and why we’ve opened this investigation.”

Others are expressing similar shock. CNN spoke with Dr. Anne-Marie Irani when told of the medical director’s testimony. Irani is a professor of pediatrics and internal medicine at the Children’s Hospital of Richmond at VCU. “Oh my God. Are you serious?” She asked. “That is incredible.”

“This is potentially a huge, huge story and quite frankly may reshape how insurance functions,” said Dr. Andrew Murphy. a fellow of the American Academy of Allergy, Asthma and Immunology.

The news of Aetna’s methodology came in a court case brought by a college student, Gillen Washington, who has a rare immune disorder.

“Washington, 23, is suing Aetna for breach of contract and bad faith,” CNN writes, “saying he was denied coverage for an infusion of intravenous immunoglobulin (IVIG) when he was 19. His suit alleges Aetna’s ‘reckless withholding of benefits almost killed him’.”

Intravenous immunoglobulin, which Washington required, is expensive. The treatment can cost $20,000.

“Questioned about Washington’s condition,” CNNC writes, “[Dr.] Iinuma said he wasn’t sure what the drug of choice would be for people who suffer from his condition. Iinuma further says he’s not sure what the symptoms are for the disorder or what might happen if treatment is suddenly stopped for a patient.”

“Did you ever look at medical records?” Scott Glovsky, Washington’s attorney, asked during the deposition.

“No, I did not,” Iinuma replies.

“So as part of your custom and practice in making decisions, you would rely on what the nurse had prepared for you?” Glovsky asks.


“Dr. Iinuma’s decision was correct,” Aetna told the court. “Plaintiff has asserted throughout this litigation that Dr. Iinuma had no medical basis for his decision that 2011 lab tests were outdated and that Dr. Iinuma’s decision was incorrect. Plaintiff is wrong on both counts.”

Aetna gave this written statement to CNN:

“We have yet to hear from Commissioner Jones but look forward to explaining our clinical review process. 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.”

“Medical directors — and all of our clinicians — take their duties and responsibilities as medical professionals incredibly seriously. Similar to most other clinical environments, our medical directors work collaboratively with our nurses who are involved in these cases and factor in their input as part of the decision-making process.”