Statement of the Right All consumers have the right to a fair and efficient process for resolving differences with their health plans, health care providers, and the institutions that serve them, including a rigorous system of internal review and an independent system of external review.
Internal appeals systems should include:
External appeals systems should:
Fair and efficient procedures for resolving consumer complaints about their health care serve many purposes. First and foremost, enhanced internal and external review processes will assist consumers in obtaining access to appropriate services in a timely fashion, thus maximizing the likelihood of positive health outcomes. Second, they can be used to bridge communication gaps between consumers and their health plans and providers, and to provide useful information to all parties regarding effective treatment and consumer needs. Third, the opportunity for consumers to be heard by people whose decisions significantly touch their lives evidences respect for the dignity of consumers as individuals and engenders their respect for the integrity of the institutions that serve them.
Properly structured complaint resolution processes should promote the resolution of consumer concerns as well as support and enhance the overall goal of improving the quality of health care. Internal and external complaint and appeal processes should be:
Internal and external complaint and appeal processes should not interfere with communication between consumers and their health care providers. For example, in instances where consumers and their providers agree that a service should be reduced or terminated, no written notification of such decisions is needed. Additionally, health care providers who participate in the complaint and appeal processes on behalf of patients should be free from discrimination or retaliation. Likewise, consumers who file a complaint against a provider or plan should be free from discrimination or retaliation.
For the purposes of this chapter, the following definitions are used for the terms "complaints" and "appeals":
Appeal. An "appeal" is a consumer's request for a health plan, facility, or provider or other body to change an initial decision. An appeal process is a procedure for reconsideration of a specific determination made by a health provider, facility or plan.
ERISA Plans. All employers offering health benefits to their employees through managed care organizations or traditional indemnity insurers must comply with requirements of the Employee Retirement Income Security Act. ERISA requires private employer-provided health benefit plans to disclose certain information to plan participants, to report information to the Federal government, and to pay benefits that are promised under the plan. ERISA regulations generally require employer health plans to approve or deny claims within 90 days and to approve or deny appeals of claims denials within 60 days. Although ERISA health plans are required to establish and disclose complaint and appeals procedures to participants, and to notify participants of claims denials, the plans are not required to provide a particular complaint procedure (Butler and Polzer, 1996). An internal reconsideration of denied claims is stipulated but appeals may be decided by the same plan administrators that initially denied the claim. Determinations must be in writing and state specific reasons for the decision.
Medicare. Under the Medicare fee-for-service system, fiscal intermediaries and carriers must provide a two-step internal review and notification of their final decision before a beneficiary is entitled to seek reconsideration from the Social Security Administration's payment division and the Health Care Financing Administration (Kinney, 1996). Medicare provides a graded appeal process that includes a hearing before an administrative law judge and administrative appeals council review for claims under Part A (hospital coverage) if the amount in controversy is more than $100; and under Part B (physical and outpatient coverage) if the claims are more than $500. Claims under Part A and Part B for more than $1,000 are entitled to judicial review.
HMOs that participate in Medicare are required to provide meaningful internal procedures for resolving complaints about the quality of care, untimely provision of care, or the improper demeanor of health care personnel (Stayn, 1994). HMO decisions to deny coverage for certain treatment, referral outside a plan, or reimbursement for emergency or out-of-area care are subject to an external review and administrative appeal. HCFA has contracted with a private organization, the Center for Health Dispute Resolution, to perform these reconsiderations (Richardson, Phillips, and Conley, 1993). After external review, a Medicare beneficiary enrolled in an HMO who is "dissatisfied by reason of his failure to receive any health service to which he believes he is entitled and at no greater charge than he believes he is required to pay" has a right to Social Security administrative review for controversies more than $100 and judicial review for controversies more than $1,000.
Medicaid. The Federal Medicaid statute requires State agencies to provide beneficiaries with a fair hearing and an administrative appeal when their eligibility or requests for services are denied or not acted upon within reasonable time. These State agency determinations can be challenged in State court under State administrative procedure acts or in Federal court. In addition, HMOs that contract to serve Medicaid beneficiaries must establish an internal complaint procedure that will resolve disputes promptly. These internal procedures are subject to review and approval by the State. Medicaid HMO enrollees have the same rights to administrative appeal as do fee-for-service enrollees and no recommendations are made concerning the changing of such rights.
Federal Employees Health Benefit Program. Federal employees and their dependents receive coverage through private insurance carriers, including more than 300 HMOs. Under the FEHBP complaint resolution process, enrollees may bring disputes concerning benefits or services to the Office of Personnel Management for review after asking the plan to reconsider its initial denial and failing to receive a satisfactory reply. OPM seeks to determine whether the enrollee or family member is entitled to the services or supply under the terms of the contract.
Other Approaches. The federal HMO Act requires that to be a "federally qualified HMO," a plan must provide meaningful procedures for hearing and resolving complaints between subscribers and the plan. The written procedures must be easily understood and provided upon request. HMOs are not required to comply with the Act's requirements but may do so to obtain favored status. Other approaches to complaint resolution exist in the Department of Defense's health programs, including the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS).
Establishing Independent External Appeals Systems. Additional analysis must be done to identify the most effective and efficient methods of establishing the independent external appeals function. Issues to be considered include: mechanisms for financing the external review system; sponsorship of the external review function; design of review processes to assure evidence-based decisionmaking; qualifications of reviewers; consumer cost-sharing responsibilities (e.g., filing fees); and methods of overseeing and holding external appeals entities accountable. It will also be important to establish an ongoing evaluation mechanism to assess the impact of the external appeals process on access to appropriate services, rates of consumer disputes, litigation rates, consumer satisfaction, and costs. The evaluation mechanism should also assess the impact of certain design characteristics on the effectiveness and efficiency of the external appeals process.
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