Are Vets Selling Their Patients?

The Veterinary Information Service (VIN) reports that:

Washington state regulators are looking into allegations that the pet insurance company Trupanion is inappropriately rewarding veterinary clinics for referring pet owners to the company, facilitating enrollments, and otherwise promoting the company to prospective customers.

Documents obtained by the VIN News Service through a public records request show that the state Office of the Insurance Commissioner opened an investigation on April 27 into American Pet Insurance Company (APIC), an underwriter owned by Trupanion, which has headquarters in Seattle and sells insurance in all 50 states and Canada.

A case description states: "Entity is offering a variety of inducements, to include cash incentives and prizes in excess of $100 to veterinarians, veterinary hospitals and animal organizations as an inducement to refer consumers to purchase insurance."

Is this happening? Almost certainly.

Is Trupanion the only veterinary insurance company doing it? Almost certainly not.

To be fair, one of the worst parts of being poor is having to abandon or kill your beloved pet because you cannot afford to provide medical care, while one of the hardest parts of being a vet is having to draw a line and saying NO to providing free or low-cost coverage to an obviously suffering animal and owner.

Also, names, addresses, and other kind of detailed information are sold all the time. You think those "discount" and "club" cards at the grocery or pharmacy are pure beneficence? Nope. The company is tracking everything you buy, and they want your email and other information so they can pass on all the information they are collecting to database marketers.

The problem here is that insurance sales (a notoriously sleazy business) are sharply regulated to avoid the kind of horror shows that make it to John Grisham novels.

Insurance sale folks have to be licensed in the state, and typically cannot work on commission or get gifts valued in excess of $100 for the referral of insurance business.

None of the folks selling pet insurance for American Pet Insurance Company (APIC), an underwriter owned by Trupanion, are licensed to sell insurance in Washington state, and almost all the folks at their call centers are sales-incentivized to say whatever needs to be said to close the deal and pocket an extra $100 for their efforts.

Trupanion call centers are not the only folks incentivized to sell insurance; so too are pet hospitals, where top staff may get anything from gift cards to expense-paid vacations to Napa, Miami, New York City, and Jackson Hole.

Trupanion CEO Darryl Rawlings seems to be wholly out to lunch about the law, telling VIN that "There's no problem with having a rewards program."

On this point, he is incontrovertibly wrong, and proof is that the company recently notified participating hospitals that it would be ending its rewards program. The company has also put out a new brochures advising vets that in most states they cannot sell insurance unless they are licensed to sell insurance.

Dr. Donald Gerard, owner of Bellevue Animal Hospital in Bellevue, said most vets get kickbacks of some kind or another. "Pretty much all of our veterinary suppliers have some sort of rewards program. I don't think anybody would have thought differently of this," he told VIN, noting that it seems insurance sales is governed by special rules.

Yes it is. 

As for all those veterinary kickbacks that Dr. Gerard says are entirely normal, perhaps VIN will do a story on those?  I think it would make for interesting reading.