In 1989, CIGNA Healthcare of Arizona informed policyholders it would no longer cover long-term speech and physical therapy.
Three-year-old Ryan Ewers, who weighed 17 pounds and couldn't talk, eat or stand to have his skin touched because of complications at birth, needed those therapies for any hope of one day leading a normal life.
Luckily for Ryan, his parents made a commitment to continue his therapy, regardless of financial hardship. Karen and Randy Ewers took out loans, worked extra hard and led a Spartan life. Karen's parents chipped in. They estimate the insurance would have paid for $50,000 worth of therapy.
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Therapists believed Ryan might never talk or ride a bike.
Now 15-year-old Ryan drives his mother nuts asking if he can go out and ride his bike.
There may be dozens if not hundreds of other developmentally disabled children who stopped receiving therapy benefits because of the 1989 CIGNA policy change.
There is now strong evidence that those benefits were removed illegally from the policy covering Ryan Ewers.
Karen Ewers began piecing together that evidence back in late 1995, when she called CIGNA to complain about the family's new $779 monthly insurance premiums.
The CPA and former supervisor with the state Auditor General's Office just figured she was getting gouged.
But CIGNA's strange reaction to her complaint, and its refusal to turn over key documents in her records, left her with the lingering feeling that key facts were being hidden from her.
Now, after a six-year journey through stonewalls, lawyerly obfuscation and the numbingly esoteric world of insurance law and regulation, Ewers says she has rebuilt a clear picture of reality:
That in 1989, CIGNA Healthcare of Arizona removed speech and physical therapy benefits from its individual conversion plans without first obtaining approval from the state Department of Insurance, a violation of state law. (CIGNA officials countered that it is their standard business practice to obtain the approval.)
That on at least two occasions, the insurance company changed the Ewerses' policy significantly prior to filing those changes with the Department of Insurance, another violation of state law.
That by not legally removing speech and physical therapy benefits from its conversion policy, CIGNA still owes the parents of dozens if not hundreds of handicapped children for all unpaid therapy since 1989.
CIGNA countered in a letter to New Times that "it is CIGNA Healthcare's standard business practice to file its plan service agreements for review and approval by the Arizona Department of Insurance prior to use. For this reason, CIGNA Healthcare would have obtained Arizona Department of Insurance approval for form ISAC 92-001 and other individual conversion plan and HMO service agreements before they were implemented."
Ewers believes one document, CIGNA's 1991 master contract for conversion policies, could explain what happened to those missing benefits.
But Ewers says CIGNA never gave her a copy of the contract in 1991 and it refuses to give it to her today.
For the last five years, CIGNA has denied Ewers' requests for a copy of the contract. CIGNA also denied a New Times request for the contract.
And two years ago, a copy of the contract on file at the Arizona Department of Insurance was destroyed just days after Ewers says she made an appointment with department secretaries to review it.
Then department officials told Ewers they had no power to request the contract for her from CIGNA.
Ewers believes she has stumbled on a 12-year-old skeleton in both CIGNA and the Department of Insurance's closet.
New Times' own two-month investigation supports her theory.
"They messed up in 1989," Ewers says. "Then I believe they've done everything they could to not deal with the fact they messed up.
"Because of that, I believe there are other parents who are entitled to benefits. My hope is they can recover something to put away for their children's futures. And then maybe something good can come from CIGNA acting in such bad faith."
After 48 hours of labor, Ryan Ewers was born February 1, 1986, with his umbilical cord cinched around his neck.
He and his family would have to build a life for him around a half-suffocated brain.
He vomited his food. He was fed through tubes until surgery and physical therapy helped him tolerate eating.
His ears were constantly infected, so tubes were inserted to drain fluid. One eye drooped, so doctors built him eyelid slings built from muscle in his leg.
He began walking once his eye was fixed. He walked like a man on stilts, so therapists and family members worked to loosen his taut ligaments and tendons.
It appeared he would spend life as a mute until one week in the summer of 1995 he began speaking little words as clear as bell tones.
"Apparently, his brain rewired and he found a way to speak," Karen says. "Some therapists said it wouldn't happen. Then there he was chatting away."
But caring for kids like Ryan isn't cheap. By the late 1980s, it was increasingly difficult for companies such as CIGNA to turn profits selling policies to families with chronically ill children.
Back in 1983, when the Ewerses first started with CIGNA, insurance companies seemed desperate to give policyholders anything they might ever need. At the time, companies were scrambling to get cash they could invest. While an insurance company in the mid-1980s might break even between premiums and payouts, it could be making 20 percent or more on investments, particularly real estate, while it held that money.
By 1989, investment returns were sagging throughout the United States. In Phoenix, the real estate bubble burst and the Resolution Trust Corporation had come to town.
As an architect, Randy Ewers was doing well in the Valley of the mid-1980s. He left Gosnell Development in 1985 to start his own architectural design business.
By then, Karen had already left the state Auditor General's Office after working there for more than six years. She was taking care of her toddler, Alexis, while she helped out with her parents' business, Naughton Jewelry.
When Randy left Gosnell, the Ewerses decided to continue buying health insurance from CIGNA. At the time, families who moved from a group plan to individual coverage were given "Non-Group" policies, known commonly as "conversion" policies.
Not long after Ryan's birth in early 1986, the real estate economy began to flag. CIGNA's investments began to tank. Buildings stopped getting built, so architects lost work. As people lost work, jewelry sales slowed.
CIGNA and the Ewerses were pretty much in the same sinking boat.
CIGNA began trimming benefits from all of its policies. Workers were laid off, clinics scaled back. Karen Ewers watched the decline as she took Ryan in for therapy at CIGNA clinics in the Valley.
On July 17, 1989, Karen and Randy Ewers received a letter explaining that CIGNA would no longer cover therapy benefits for pediatric patients with developmental disabilities. CIGNA stopped paying for Ryan's therapy in October of that year.
The change was devastating to the Ewerses and other families in their situation.
And there was something strange about the change, too. Policy changes had always been made January 1. They had never had a change come in the fall.
Karen Ewers would remember that tiny detail a decade later as she combed through Department of Insurance records.
By 1990, policyholders were becoming increasingly irate with insurance companies. In particular, people with conversion policies felt they were getting bait-and-switched. They would leave a group with full benefits, continue a conversion policy with those same benefits and then quickly have many of those benefits removed.
In 1991, the Arizona Legislature passed a law saying insurance companies could no longer make any reductions in the benefits given in conversion policies.
Insurance companies responded with an ingenious tactic. Companies would lure families with no health problems out of conversion policies by offering them cheaper rates in medically underwritten individual policies. Then the premiums would be increased on the unhealthy people left in the plan. Families without expensive pre-existing conditions left for the other less-expensive plans.
Over time, the only families left in the original plan were those who couldn't find insurance elsewhere.
Then premiums got jacked up some more. Insurance regulators call such policies "death spirals."
On October 25, 1995, the Ewerses received notice of their new monthly premium for 1996 -- nearly $800 a month.
Karen called CIGNA member services. She asked the premium rates for a family of four. Marjean Gurule in customer service told her it would cost $365.
When Karen asked why her family's rates were so high, she was told that hers was the rate for the "individual conversion policy."
Up until then, Ewers had no idea there was any difference between a normal individual plan and an individual conversion plan.
In the six years that followed, she would become a very reluctant expert on the topic.
A few weeks later, Karen Ewers wrote a complaint letter to CIGNA. She sent a copy of her 1987 schedule of benefits. The schedule was identified as "CIGNA Healthplan of Arizona, Inc. Individual Plan" with the document code IND86-244IP. In her letter she asked how she could have a "conversion plan" when her schedule said "individual plan." She also asked why her documents said she had an individual plan in 1986, when CIGNA didn't introduce individual plans until 1987.
A month later, she received a call from CIGNA's Scott Leyva. She says Leyva told her she needed to call "an employee named Clyde Wright to make an appointment to discuss the letter."
Ewers knew Clyde Wright from her time serving on the board of the Arizona chapter of the March of Dimes. He wasn't any employee. He was the president of CIGNA Healthcare of Arizona.
She asked if she could speak to someone else. She didn't want to mix her charity work with a personal issue. Leyva said no.
Ewers and her husband met Wright on January 12, 1996. Wright, the Ewerses say, spent much of the meeting asking what documents the Ewerses still had. Frustrated, Karen Ewers told Wright: "Look, you know I'm an anal accountant, I've kept everything you've sent me." Then Ewers asked Wright: "Why are you asking me? You mailed the documents!"
Wright declined an interview request from New Times.
Ewers says Wright suggested the family bring all the insurance documents they had to a meeting with Wright and CIGNA attorneys.
In February, Wright wrote back that, after a review of the Ewerses' records, CIGNA believed the Ewerses had been properly placed on an individual conversion policy and that no refunds were due.
The Ewerses asked for copies of those records.
CIGNA didn't respond.
The Ewerses' attorney wrote a letter to CIGNA in March asking for a copy of the Ewerses' application for insurance and, also, "a copy of each and every document referred to in your letter of Feb. 22, 1996, stating: 'Our records reflect that you were covered under . . . an individual conversion plan effective June 1, 1985, and that you and your family have remained on this plan continuously since that time.'"
CIGNA sent only the Ewerses' application for their 1985 policy. No contracts were sent.
So Karen Ewers turned to the Arizona Department of Insurance for more information. Ewers met with Steven Gelbart, an analyst for the department.
Gelbart later called Ewers to set up a meeting. Gelbart told Ewers he couldn't "find anything specific," Ewers says, but that he suspected the Ewers family had been put in "an insurance premium death spiral."
Soon after, the Ewerses, still struggling financially, decided they could no longer keep up with the CIGNA payments. They stopped their CIGNA policy and turned to state-supported Arizona Longterm Care to cover Ryan.
Busy with the jewelry store, building spec homes with her husband and caring for Ryan, Karen dropped her pursuit of the documents.
But as life went on, those strange dealings with CIGNA lingered in the back of her mind. Death spiral or not, why had she been called into the company president's office and grilled about what records she had? Why hadn't CIGNA just turned over her records so she could review them? After all, CIGNA was legally obligated to turn over much of what her attorney asked for. Something seemed amiss.
So, in the spring of 1999, after the spec homes were finished and life had settled a bit, Ewers decided to return to the Department of Insurance to find an answer to her insurance mystery.
On April 28, 1999, Ewers went to the Life and Health section of the Department of Insurance asking to review all CIGNA insurance documents from 1983 to 1996.
Ewers says a secretary named Betty Sickinger helped her. To make the request manageable, Ewers says she told Sickinger that she would like to review the most recent five years of HMO documents filed with the state. And when she was finished with those, she would like to review the next five years back, and so on, until she had seen them all. Ewers filled out a public-records request form and set an appointment for May 12.
On May 12, Ewers and a friend, Maria Palmer, former chief financial officer of Westbridge Children's Mental Health Hospital, went to the department to review CIGNA records. Sickinger brought out two metal carts with 12 large boxes and told Ewers and Palmer to place Post-it notes on any documents they wanted copied.
Ewers and Palmer had several documents copied. The most important page, they felt, was a December 31, 1997, letter from CIGNA requesting a minor language change to all of CIGNA's contracts. The letter then listed all applicable contracts, including one conversion contract, Individual Service Agreement Conversion 92-001, or ISAC 92-001, which was filed in December of 1991.
Sickinger called Ewers on May 14 to tell her the copies were ready. Ewers went to the department around 4 p.m. Sickinger had left for the day, so Ewers was assisted by another secretary, Mary Sosa.
Karen Ewers and Department of Insurance officials describe the ensuing conversation differently.
Ewers says she paid for the copies and then said she wanted to set up an appointment to review contract ISAC 92-001. Ewers says the secretary told her she would have to get permission from a supervisor to set up the appointment. The secretary returned with permission and they set up an appointment for 10 a.m. May 26 to review that particular document. Ewers wrote the time and date at the top of one of her copies.
(The secretary Ewers spoke to denies that she set up an appointment to review the contract.)
Four days after Ewers says she set up the appointment to review the contract, she received a call from Betty Sickinger. Sickinger told Ewers the document she wanted to see was unavailable because all HMO documents prior to December 31, 1992, had been purged.
Sickinger didn't say when the documents had been destroyed.
On May 20, Ewers visited the Department of Insurance again to review the department's "control logs," the department's registry of all documents submitted to it by insurance companies.
In the control logs, she found an entry describing the approval of the benefits schedule she had mailed to CIGNA with her complaint letter in 1995.
The ledger cards identified the form as the plan brochure for the Individual Medically Underwritten Plan that CIGNA said Ewers had never applied for.
There was another problem. Two sets of ledger cards were missing -- the cards for March through August of 1987 and for February 1988 until June of 1989, months that Ewers believed contained entries critical to her case. Steven Gelbart said he would try to find the missing ledger cards.
Two weeks later, in early June, Ewers called the Arizona Department of Library, Archives and Public Records requesting a copy of the document disposal report from the Department of Insurance's division of life and disability. It's standard procedure for departments to send files to the archives department for filing or destruction.
The next day, she received a list from archives that did not include the HMO records she had requested.
Ewers called Sickinger. Sickinger sent Ewers a fax listing cartons of CIGNA records that had been sent to state records and archives.
Ewers and an employee of records and archives reviewed the fax from Sickinger. The employee said that because of the volume of CIGNA's records, it was improbable that all of them were included in those cartons.
Ewers called Sickinger again and confronted her. Sickinger then admitted that none of the HMO archives, including the CIGNA documents, had ever been sent to records and archives.
Sickinger said the 10 years of HMO records had been destroyed by Department of Insurance employees. She said she couldn't remember when it was done.
On June 15, Ewers called the Attorney General's Office trying to find someone "who could help me get a copy of that contract from the Department of Insurance," she says. She explained that she believed the department either wrongfully destroyed the documents, or was just lying about having destroyed them.
She received a call from attorney Shelby Cuevas. Ewers says Cuevas said she had called the Department of Insurance and discovered the records had been destroyed in "late May." Cuevas told Ewers she believed everything had been done "on the up and up."
The next day, Ewers faxed the Attorney General's Office asking for copies of the two sets of missing ledger cards and the destruction report for the HMO records she was seeking.
Six days later, Cuevas called Ewers telling her to get the destruction report from the Department of Insurance. Ewers says she was stunned when she received the report.
According to the report, Betty Sickinger prepared and signed the record's destruction report on May 18, 1999.
That was the day Sickinger called Ewers at work to tell her the contract she had requested, ISAC 92-001, had been destroyed.
That was four days after Ewers says she set up an appointment to review the document.
The Department of Insurance on June 18 processed the destruction report, two days after Ewers had faxed the Attorney General's Office asking for the report.
Ewers began to suspect a conspiracy.
Department of Insurance officials deny they did anything wrong in destroying those HMO records.
Those records, they say, had been reviewed and scheduled for destruction back in 1997.
The records weren't destroyed because, like millions of documents throughout Arizona state government, the HMO records were subpoenaed as part of the tobacco litigation in Arizona.
"We had to hold on to them," says Sara Begley, deputy director of the Department of Insurance.
The subpoena was lifted by Arizona's attorney general in the summer of 1998. As the subpoena was lifted, mountains of documents throughout state government started flowing toward the state's office of records and archives.
Records and archives officials say they were quickly two years behind.
Arizona statutes at the time said documents had to be held at least five years, then they could be destroyed if they were deemed of no value.
Erin Klug, the Department of Insurance spokesperson, says department officials gave the green light on destroying the HMO documents in December 1998.
Staff members were told to get rid of the documents when they found time. Since records and archives was backed up, department officials say, they would purge the documents at the Department of Insurance. Since the documents weren't confidential, they could simply be tossed in the recycling bin at the department's office.
The HMO records filled 12 boxes. On May 18, four months after they were given the go-ahead, Sickinger, Sosa and another secretary spent the day pulling clips and rubber bands from HMO documents. By the end of the day, they had thrown all HMO records prior to 1993 into recycling bins.
May 18 was not picked for any reason, department officials say. Both Sickinger and Sosa say May 18 was a day their workloads were light.
"There was nothing inappropriate," Begley says. "This was just the department complying with its records retention schedules."
Both Sickinger and Sosa also deny that Ewers set up an appointment four days earlier to review ISAC 92-001. Department officials say that since Ewers filled out no official request form, they have no record of her request.
Ewers says she wrote the appointment time on one of the documents she had copied May 14. Indeed, her copy of CIGNA's list of contracts with the state includes a handwritten note, "5-26-99, 10:00."
And her own records clearly show the department was destroying the records on the day she was told they didn't exist.
"It was all just extremely fishy timing," Ewers says. "And it just happened to keep me from a copy of that service contract that would answer the questions I needed answered."
Ewers then made a request to CIGNA for a copy of ISAC 92-001. One of CIGNA's attorneys wrote back suggesting Ewers get the contract from the Department of Insurance.
She asked again.
The attorney wrote back that "we do not understand your reasoning for requesting another copy of this dated information at this time. However, I am happy to respond to any specific questions you may have regarding the information you previously received." In a phone conversation, the attorney said she also would be happy to review any documents Ewers already had in her possession. After Ewers once again explained that she needed copies of the contracts governing her policies, Ewers says the attorney said she didn't like Ewers' request because it sounded like Ewers was "trying to catch" CIGNA.
On March 20 of last year, after her Catch-22 exchange with the CIGNA attorney, Ewers wrote a letter to Charles Cohen, director of the Department of Insurance. She asked Cohen for the department's assistance in helping her retrieve from CIGNA the records his department had destroyed.
Ewers received a call from Gerrie Marks, the department's executive assistant for regulatory affairs, who told her the Department of Insurance had no legal authority to request Ewers' documents from CIGNA.
Department officials now tell New Times that the department could possibly have obtained the contracts from CIGNA if Ewers had filed a formal complaint.
Ewers says she did make a formal complaint, but she made it through the Attorney General's Office. On April 4, 2000, she says she was told by Shelby Cuevas of the Attorney General's Office to write her a complaint detailing the concerns.
Cuevas later told Ewers she would need to seek private legal counsel because no one had time to look at her letter, Ewers says.
So Ewers hired insurance attorney Rick Berry.
At the same time, Ewers pulled together all her documents and research to try to understand what was happening to her. In particular, she began cross-referencing her own letters and schedules of benefits received from CIGNA since 1985 with the Department of Insurance's logs of insurance company filings.
With an auditor's precision, she pieced together the puzzle. And even without the last piece, ISAC 92-001, she was convinced she could see the picture clearly.
Arizona Revised Statutes state that no changes can be made to a policy without approval from the director of the Department of Insurance.
According to the Department of Insurance control logs, the benefit schedule mailed to Ewers by CIGNA in 1985 was developed by them to be used as medically underwritten insurance polices, not conversion policies like the one Ewers had.
The Department of Insurance approved that policy October 17, 1986. Ewers' policy went into effect January 1, 1987.
According to Department of Insurance files, CIGNA did not file this schedule as an amendment to Ewers' conversion policy until March 4, 1988. It was approved April 7, 1988, nearly 16 months after the policy changes had been activated.
Another change to her policy appears to have been filed four months late by CIGNA.
When asked by New Times if "CIGNA Healthcare of Arizona ever enacted a reduction in insurance benefits . . . before having approval for those policy changes from the Arizona Department of Insurance," CIGNA attorneys responded that it is the company's "standard business practice to file its plan service agreements for review and approval by the Arizona Department of Insurance prior to use. For this reason, CIGNA Healthcare would have obtained Arizona Department of Insurance approval for form ISAC 92-001 and other individual conversion plan and HMO service agreements before they were implemented."
New Times' question remained unanswered.
Interestingly, both of the late filings Ewers discovered were detailed on one of the control logs that was missing from the Department on May 20, 1999. The log later appeared after Ewers requested the logs through the Attorney General's Office.
Ryan Ewers began receiving speech therapy services from CIGNA in May 1988 that continued until the end of 1989. The benefits, then, could not have been removed in those two 1988 amendments.
The two early 1988 amendments are the only ones recorded for Ewers' policy before 1991, the year conversion policies could no longer be changed.
Which leads Ewers to believe the contract ISAC 92-001, which was approved after the state law changed, says one of two things:
That the therapy benefits still existed. (Remember, she says she never received the schedule of benefits. CIGNA says she would have.)
Or, the therapy benefits don't exist. If this is true, it would appear that those benefits were removed without proper approval.
Either way, she says, her family and every other family stuck in this death spiral conversion policy should be paid for years of therapy that CIGNA should have covered.
Ewers' attorney Rick Berry, who is chairman of the state bar's insurance committee, filed a complaint in Superior Court last summer seeking copies of the Ewerses' contracts.
The motions to dismiss and other barriers erected by CIGNA in the case have been masterpieces of obfuscation.
CIGNA said the complaint wasn't specific enough. It argued the case had to be heard at the federal level. It argued the Ewerses' 1996 request for documents wasn't specific enough. It argued it doesn't need to turn over documents to someone who has left CIGNA coverage.
A judge dismissed the first complaint, saying he didn't have jurisdiction to order the contracts turned over.
Berry filed a second complaint, this time seeking damages and repayment of unpaid benefits.
"This case arises out of Plaintiff's legitimate belief that CIGNA shortchanged insurance benefits of thousands of handicapped children in Arizona, including Ryan Ewers," Berry wrote.
The complaint hinted at a class-action suit.
"It seems that no matter what Plaintiffs do," Berry wrote, "CIGNA will not turn over something as simple as an insurance contract that it is, by law, required to maintain and produce. It must be that the insurance contract is so damaging that CIGNA will do whatever is necessary to avoid producing it."
CIGNA countered that any lawsuit regarding conversion policies should be handled under federal insurance statutes, collectively known as ERISA.
Those laws are considered by proponents of a federal patient bill of rights to be some of the most anti-consumer legislation in America. Under those laws, for instance, the Ewerses would be unable to receive any punitive damages.
Conversely, though, by placing the case under ERISA, CIGNA could be forced to pay $100 a day for each day it withheld ISAC 92-001 from the Ewerses. Since the Ewerses first asked for the contract in 1996, the fines could total more than $200,000.
Berry filed a separate complaint asking for the documents under ERISA statutes.
A Superior Court judge should rule on the case in the next two weeks.
If the judge denies the Ewerses a copy of the contract, there may be only one other way to get a copy of the document:
"There must be someone out there, an attorney or a policyholder or someone, who has one," Ewers says. "Maybe there's someone out there who will read this and be able to help us out."
Her other hope is to find other children and their parents who were covered by individual conversion plans and were denied therapy benefits by CIGNA beginning in 1989.
"At this point," Berry says, "I have no idea how many people were affected by this. It would be nice to know. And we're certainly not going to find out from CIGNA."
CIGNA officials told New Times they are unable to retrieve data on how many families with developmentally disabled children held conversion policies in the late 1980s, or how much CIGNA had paid out to those families.
As of June 2001, CIGNA's public relations director, Tania Graves, says CIGNA had 78 individual conversion plan members, a tiny fraction of the total 206,918 CIGNA HMO plan members in the state.
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(Any one of those 78 plan members is welcome to call New Times to discuss their policies and contracts. Under federal ERISA statutes, too, any one of those 78 plan members must be given copies of contracts by CIGNA upon request.)
"I've just been led to believe that this was a truly abusive situation," Ewers says.
"We were lucky. We found ways and had ways available to get Ryan the therapy he needed to be able to live a rich life.
"But you know there are families and children who weren't so lucky. It's those people that really deserve the help now. And it would be wonderful to help them get what they deserve."