Ruling Could Ease Appeals for Medicare Recipients

A little-noticed ruling by a federal judge earlier this week could make it easier and faster for 4 million Medicare beneficiaries to appeal denials of medical services by HMOs.

The ruling in an Arizona court case is a major victory for health-care advocates for the elderly, who had argued that the Department of Health and Human Services is failing to enforce federal rules that allow Medicare recipients to appeal decisions by HMOs to deny medical services or treatments.

“This case is a huge step in removing HMO roadblocks to obtaining needed care and in making sure that people get the care Medicare has paid for,” said Carol Jimenez, an attorney with the Center for Health Care Rights, a Los Angeles consumer group that deals with Medicare issues.

The class-action lawsuit was brought three years ago by consumer advocates on behalf of Medicare recipients who complained of improper denials of medical care by HMOs and difficulty challenging those decisions.

Lawyers for the plaintiffs presented information on about 50 case histories of Medicare recipients who alleged that they were denied a variety of services, including home health services, nursing home care and physical therapy or rehabilitation services.

In a 30-page opinion, U.S. District Judge Alfredo C. Marquez called the stories “heartbreaking” and said the evidence shows “that these are not isolated cases.”

Under the ruling, the plaintiffs’ lawyers will draft a set of proposed changes to the federal appeals process.

Darrel Grinstead, chief counsel for DHS’ Health Care Financing Administration agency, declined comment on the ruling. No decision has been made on whether to appeal, he said.

Government lawyers had argued that the current appeal process for Medicare recipients in HMOs satisfies all legal requirements.

The government also argued that appeals were about 30 times higher among Medicare recipients in fee-for-service programs than for those enrolled in HMOs, demonstrating that HMOs were doing a good job. Lawyers for the plaintiffs argued that those higher rates showed the HMOs and government were doing a poor job notifying members of their appeal rights--an argument the judge agreed with.

Government lawyers also argued that HMOs have been improving their appeals procedures and that some of the problems have been rectified.

Federal law gives Medicare recipients in HMOs the right to appeal any medical denials to the secretary of Health and Human Services, which has the authority to overrule any denials. But plaintiffs’ lawyers contended the appeals process frequently doesn’t work. They argued that HMOs often fail to notify members of their appeal rights. Appeal decisions, they contended, are often confusingly worded or ambiguous, and the appeals process can take months to complete, meaning that some seriously ill patients might die before decisions are rendered.

Marquez ruled that the government’s appeals notices “failed to provide adequate reasons for the denials,” noting that not one of 570 HMO notices he reviewed gave a specific reason for denying the care.

Plaintiffs’ lawyers had also alleged that HMOs serving Medicare patients were failing to provide all the medical services they were required to under law. Marquez’s ruling did not cover that issue.

Under federal law, the Medicare HMOs are required to provide the same range of medical services to members as they would receive under a traditional fee-for-service Medicare program.