Federal Regulation Speeds Managed Care Appeal Process

With Republicans and Democrats still at odds over a comprehensive bill to protect patients, President Clinton announced a significant regulation that would dramatically speed up the appeal process for the 120 million Americans who have private, employer-sponsored health plans.

When a treatment is denied, patients would be entitled to an expedited appeal. Health plans would have 72 hours to rule on an appeal in an emergency and 30 days if the contested procedure is not an emergency. Currently, plans have as long as 90 days to respond in non-emergency cases, and an appeal can take six months.

But the federal regulation is a far cry from the comprehensive patient protections that Clinton, congressional Democrats and a handful of Republicans are pushing for. Those protections would provide easier access to specialists, appeals to an independent review board outside of the health plan and guaranteed coverage at the nearest hospital for emergencies.

“What we’re doing today is trying to give quick and prompt appeals through an internal review process to the insurance companies and plans that are within our jurisdiction,” Clinton said Saturday in his weekly radio address. “But it is simply not enough. That’s why I’ve worked so hard to pass a patients’ bill of rights available to all Americans in all plans . . . that would say medical decisions should be made by doctors, not accountants.”

In making health care the topic of Saturday’s address, Clinton appeared to be reminding people that he intends to fight for his public policy agenda despite his personal troubles. He criticized Republican leaders for blocking a full debate on managed care regulation. “The Republican leadership in both houses has not allowed full and open debate on the issue. . . . But, remember, this is not a partisan issue. Nobody asks your party affiliation when you visit your doctor.”

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Most private plans are governed by the 1974 Employee Retirement and Income Security Act, and its health care rules have gone virtually unchanged for nearly 20 years. In that time, the health insurance system has been transformed from one dominated by fee-for-service insurance to one dominated by managed care. Today, 75% of all privately insured Americans are in some kind of managed care plan, which attempts to hold down costs by limiting access to specialists, expensive treatments and tests.

Indeed, the old rules are so ill-suited to today’s health system that private employers and health insurance plans have even urged the Department of Labor, which oversees the employer plans, to overhaul the old regulations. In part, such urgings were self-interested, as employers and insurers feared a wholesale backlash against managed care, which could end up raising the costs of health care.

“Much of what patients are concerned about could be taken care of by responsible regulating,” said Paul Dennett, vice president for health policy at the Assn. of Private Pension and Welfare Plans, which represents large and mid-size employer benefit plans. “There’s absolutely no reason that the Labor Department’s regulations and approach shouldn’t be updated to reflect a new reality.”

The American Assn. of Health Plans, which represents more than half of all managed care plans nationwide, also endorsed the principle of quicker appeals, said Susan Pisano, a spokeswoman for the group. The organization asks that its member plans complete appeals as fast as the patient’s condition warrants, sometimes quicker than the 72 hours required in the regulation.

Clinton’s announcement of the new rules is one more in a series of efforts to use the president’s regulatory powers to give patients more leverage in dealing with their health plans.

Over the last year, the White House has put in place guarantees for patients in government-run programs such as Medicare and Medicaid, including access to an independent appeal, payment for emergency treatment at any hospital and access to specialists.

But for Americans who get health care through a plan offered by a private employer, or who buy it on their own, the government’s powers are far more limited. Clinton’s announcement Saturday represented his first effort to make changes for them in regulation of the private health insurance system.

The regulation Clinton announced has three parts: the expedited appeal, a requirement that health plans inform patients that they have a right to appeal and how to undertake an appeal, and a requirement that patients be informed of the basis for the denial of any appeal.

The Labor Department is expected to release another regulation in coming weeks that would require health plans to provide patients with detailed information about benefits and coverage rules. Today, it is often difficult for patients to comparison-shop among health plans, because there is little standardized information.