November 2001

Grant Results

SUMMARY

From 1998 to 2000, staff at the American Bar Association Commission on Legal Problems of the Elderly surveyed managed care plans on their current practices for resolving enrollee-plan disputes. The project emphasized disputes involving older people and recommended workable options for improving dispute resolution.

Key Findings
Findings from a published report, Understanding Health Plan Dispute Resolution Practices, include:

  • Many health plans have developed fair and effective practices in customer service, grievances and appeals.
  • Compliance with multiple regulatory requirements is the primary challenge health plans face in implementing dispute resolution systems.
  • The most common appeals, in order of frequency, are for:
    • Emergency room coverage.
    • Pharmacy issues.
    • Coverage for referrals that have not been authorized.
    • Out-of-network coverage.
    • Contractual interpretation of benefit coverage.
    • Benefits excluded by contract but needed by the member.
    • Billing problems.
    • Coverage for durable medical equipment.
  • There is no uniform set of guidelines or agreed-upon standards for making "medical necessity" determinations.
  • Plans do not consistently give timely written notice of their initial decision to deny services or payment, or their decision to reduce or terminate services.
  • When members appeal, health plans overturn their initial decisions in a substantial number of cases.
  • Many Medicare enrollees have difficulty understanding and participating in the appeals process.

Funding
The Robert Wood Johnson Foundation (RWJF) supported this project through a grant of $329,186.

 See Grant Detail & Contact Information
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THE PROBLEM

Three-quarters of all Americans with private health insurance are now enrolled in a health maintenance organization (HMO) or similar plan, as are more than five million elderly people on Medicare and 13 million Medicaid beneficiaries. Conflicts under these plans frequently have an urgency not seen in the fee-for-service sector since many disputes arise before treatment is delivered. A 1997 survey found that 27 percent of managed care households experienced difficulty with their plan in the previous year. While nearly three-quarters (71 percent) of these families took steps to resolve their difficulties, more than half (54 percent) were either dissatisfied with the resolution or were not able to resolve the problem.

In April 1997, the American Bar Association's (ABA) Commission on Legal Problems of the Elderly held a two-day roundtable on the "Resolution of Consumer Disputes in Managed Care." While working groups at the meeting produced "exploratory recommendations" on grievances and appeals structures, it was clear that the design of workable dispute resolution systems required further information on how health plans address consumer concerns.

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THE PROJECT

The project funded by the RWJF grant was designed to follow up on the roundtable meeting. It provided support to the Commission to survey managed care plans on their current practices for resolving enrollee-plan disputes. The project included a special emphasis on disputes involving older people and recommending workable options for improving the process. An Advisory Committee was assembled to help guide the project (see Appendix 1).

The Commission's study had three components:

  1. 50 structured telephone interviews with senior officials in managed care organizations across 27 states. These plans ranged in size from 3,900 to five million members; half had memberships between 150,000 and 500,000. Thirty-eight of the 50 plans participated in the federal Medicare program and 26 in state-federal Medicaid.
  2. Four on-site visits to health plans with well-developed and innovative dispute resolution practices. The plans varied in geographic location, plan type, enrollee population, and managed care market penetration.
  3. Four focus groups, two with enrollees in Medicare HMOs, one with enrollees in commercial managed care, and one with geriatric care providers.

The Commission engaged the Economic and Social Research Institute, a Washington, D.C.-based nonprofit research organization, to help design the study and participate in the site visits and interviews. Health Systems Research of Washington, D.C., helped identify and interview plans that participated in the study. Lake, Snell, Perry, and Associates, also of Washington, conducted a number of the focus groups. The project received $30,000 in additional funding from the William and Flora Hewlett Foundation.

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FINDINGS

The Commission published one full report of the study's findings, Understanding Health Plan Dispute Resolution Practices,and a summary report. Their findings included the following:

  • Many health plans have developed fair and effective practices in customer service, grievances, and appeals. The report identified a series of "promising practices" that appear to respond to needs identified by consumers and are successful in addressing member disputes. Many of these practices have not been shared among plans or broadly tested.
  • Compliance with multiple regulatory requirements is the primary challenge health plans face in implementing dispute resolution systems. State agencies, the National Committee for Quality Assurance (an accrediting body of the HMO industry), and the federal Health Care Financing Administration (HCFA), which manages Medicare, frequently have multiple, sometimes conflicting, and often changing definitions and requirements governing dispute resolution time frames and procedures. Plans also lack uniformity in data collection and reporting of complaints, grievances, and appeals of plan determinations.
  • The most common appeals, in order of frequency, are for:
    1. Emergency room coverage.
    2. Pharmacy issues.
    3. Coverage for referrals that have not been authorized.
    4. Out-of-network coverage.
    5. Contractual interpretation of benefit coverage.
    6. Benefits excluded by contract but needed by the member.
    7. Billing problems, and (8) coverage for durable medical equipment.
  • There is no uniform set of guidelines or agreed-upon standards for making "medical necessity" determinations. Plans appear to abide by different criteria, and also vary in their use of written criteria.
  • Plans do not consistently give timely written notice of their initial decision to deny services or payment, or their decision to reduce or terminate services. Notifications frequently lack full information for an effective appeal, such as how to submit additional evidence.
  • When members appeal, health plans overturn their initial decisions in a substantial number of cases. While figures were incomplete, a substantial number of the plans studied reversed their initial denial in 40 percent or more of cases at both the first and second level of appeal. This indicates that persistent efforts by members often pay off in getting services covered.
  • Many Medicare enrollees have difficulty understanding and participating in the appeals process. While manyplans make accommodations for members who are older or who have disabilities, plans frequently do not take a systematic approach to meeting their needs. While some Medicare plans refer enrollees to their area's Health Insurance Counseling and Assistance Program—a HCFA-financed program to help consumers navigate the Medicare and health care system—most health plans are unaware of the program.

Recommendations

  • Industry and government leaders should help identify, test, and promote promising practices through conferences, materials, studies, electronic listservs, newsletters, training, and incentive programs. The managed care industry could consider convening a commission to seek improvements in dispute resolution, and should ensure consumer participation in the process.
  • Industry and government bodies should move toward uniformity in regulatory and accreditation standards. Uniformity about such things as dispute resolution terminology, reason codes, time periods for reporting purposes, data collection and tracking methods, as well as formats for public reporting of grievances and appeal, would enable HMOs, regulators, and consumers to make better comparisons across plans, to target problem areas, and to improve compliance.
  • Health plans should have consistent, timely, and understandable procedures for initially notifying enrollees of denials of coverage or payment, or of decisions to reduce or terminate services. These initial notifications frequently trigger appeals. Similarly, health plans and regulators should concentrate more effort on the "gray" area between immediate problem resolution by customer service and the formal filing of an appeal.
  • Plans should reconsider training of their customer service and appeals staff. Health plans could establish a career path for these employees—through compensation, benefits, job incentives, opportunities for cross training, and mentoring programs—to promote professionalism and high-quality service. These employees could also be trained in the use of mediation, negotiation, and facilitation to supplement required grievance and appeals processes. Laws and regulations should require that decision-makers have appropriate expertise and no previous involvement in a disputed case.
  • Plans should work to speed the resolution of pre-service cases. To ensure timely attention to health concerns, plans should establish shorter time frames for members awaiting care, and fewer levels of appeal. Plans should structure their internal reconsideration process to allow Medicare beneficiaries the opportunity for an in-person review, as they now do non-Medicare consumers.
  • Government and industry leaders should take steps to educate members and the public about dispute resolution. A campaign should particularly target professionals likely to assist consumers when problems arise, such as physicians, nurses, employee benefits counselors, social service agencies, discharge planners, and others.
  • Government and industry should support members in the dispute resolution process. Medicare plans should make referrals to the SHIP program in their area; SHIP counselors should make contacts with health plan personnel in customer service and appeals to facilitate referrals.

Limitations

  1. The sample of 50 health plans was not drawn scientifically. While the investigators sought diversity and balance, access to plan leadership played a role in the selection of interviewees. It was somewhat difficult to identify plans willing to participate in the project; plans with better dispute resolution systems may have been more likely to participate in the project. In addition, many of the plans' responses were framed in terms of their prevailing policies, not necessarily their actual practices.
  2. While focus groups provided some consumer perspective, the bulk of the information collected under this project came from health plans. The project found it difficult to recruit consumers, especially Medicare beneficiaries, able to talk knowledgeably about their experiences with dispute resolution in focus groups. In general, there was no direct consumer check on the information received about specific health plans.

Communications

Approximately 300 copies of the full report, Understanding Health Plan Dispute Resolution Practices, and 750 copies of its summary report, Understanding Health Plan Dispute Resolution Practices: Summary of Findings, have been distributed to senior health plan executives, regulators, consumer advocacy groups, and policymakers, and dissemination activities continue.

The Commission also prepared and distributed 1,000 copies of a consumer brochure, "If You Have A Problem With Your Managed Care Plan. Understanding Health Plan Dispute Resolution Practices." The brochure also appears on the Commission's Web site.

The ABA mailed a news release of the project's findings to its national list of press contacts. Coverage appeared in the Older Americans Report and the Aging News Alert. The findings have been presented at professional meetings, and researchers led a workshop on handling health plan disputes at the Medicare Compliance Congress in Washington, D.C., in October 2000. (See the Bibliography for details.)

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AFTER THE GRANT

Aside from dissemination activities, the project concluded with this grant, although the Commission has identified a number of possible opportunities for follow-up research.

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GRANT DETAILS & CONTACT INFORMATION

Project

Study of Consumer Dispute Resolution in Managed Health Care

Grantee

American Bar Association Fund for Justice and Education (Washington,  DC)

  • Amount: $ 329,186
    Dates: August 1998 to February 2000
    ID#:  033592

Contact

Erica Wood, J.D.
ericawood@staff.abanet.org
Naomi Karp, J.D.
(202) 662-8690
nkarp@staff.abanet.org

Web Site

http://new.abanet.org/aging/Pages/default.aspx

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APPENDICES


Appendix 1

(Current as of the time of the grant; provided by the grantee organization; not verified by RWJF.)

Advisory Committee

Charles Barone II, M.D.
Physician in Charge
Henry Ford Medical Center, Lakeside
Sterling Heights, Mich.

Geri Dallek
Institute for Health Care Research and Policy
Georgetown University Medical Center
Washington, D.C.

Nancy Dubler
Director, Division of Bioethics
Department of Epidemiology & Social Medicine
Montefiore Medical Center
New York, N.Y.

Erling Hansen
General Counsel
The George Washington University Health Plan
Washington, D.C.

Rosamond Katz
Assistant Director
HERS/HSQPH
General Accounting Office
Washington, D.C.

Larry Levitt
The Henry J. Kaiser Family Foundation
Menlo Park, Calif.

Leonard Marcus, Ph.D.
Director
Program for Health Care Negotiation and Conflict Resolution
Harvard School of Public Health
Boston, Mass.

Lauren Randel, M.D.
Department of Clinical Bioethics
National Institutes of Health
Bethesda, Md.

Margaret Sparr
Director for Entitlement, Enrollment & Protections Group
Center for Beneficiary Services
Health Care Financing Administration
Baltimore, Md.

Kathryn Wilber
Assistant General Counsel
American Association of Health Plans
Washington, D.C.

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BIBLIOGRAPHY

(Current as of date of this report; as provided by grantee organization; not verified by RWJF; items not available from RWJF.)

Reports

Karp N and Wood E. Understanding Health Plan Dispute Resolution Practices. Washington: ABA Commission on Legal Problems of the Elderly, 2000. 300 copies distributed to date.

Karp N and Wood E. Understanding Health Plan Dispute Resolution Practices: Summary of Findings. Washington: ABA Commission on Legal Problems of the Elderly, 2000. 750 copies distributed to date.

"If You Have A Problem with Your Managed Care Plan. Understanding Health Plan Dispute Resolution Practices." Washington: ABA Commission on Legal Problems of the Elderly, 2000. Also available online Web site.

Presentations and Testimony

Erica Wood and Jack Meyer, "Managed Care Dispute Resolution," at the Society of Professionals in Dispute Resolution, September 1999, Washington.

Erica Wood and Elyse Politi, "Medicare Managed Care Ombudsman," at the National Council on Aging, March 29, 2000, Washington.

Erica Wood, "Summary of ABA's Study for RWJ," at initial meeting of panel for RWJF project on managed care dispute resolution, sponsored by the Robert F. Wagner School of Public Service, April 6, 2000, New York.

Erica Wood, Naomi Karp, and Maureen Miller, "Handling Health Plan Disputes: From Good Practices to Compliance," Medicare Compliance Congress, at the Institute for International Research, October 24, 2000, Washington.

Press Kits and News Releases

A news release, "ABA Study Recommends Changes to Improve Health Plan Dispute Resolution Practices," was mailed to 1000 ABA press contacts nationwide in May 2000.

Print Coverage

"Improvements Suggested to Resolve HMO Disputes," in Edison Weekly, May 22, 2000.

"Improvements Suggested to Resolve HMO Disputes," in NSCLC Weekly, May 22, 2000.

"Bar Association Recommends Standard Rules for Resolving Coverage Disputes," in Older Americans Report, August 25, 2000.

"Seniors Advocates, Health Insurers Urged to Act on Coverage Disputes," in Aging News Alert, September 11, 2000.

Brief articles about the project also have appeared in a number of bar association and legal publications, based on the ABA press release; the ABA press office maintains copies.

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Report prepared by: Janet Spencer King
Reviewed by: Richard Camer
Reviewed by: Karyn Feiden
Program Officer: Judith Whang