Medicare Appeals Plan Could Be a Model in Resolving Complaints on Managed Care

When Americans complain about managed health care, they complain the most about having no reliable recourse if their plan denies them a treatment or a procedure.

So far, health reformers and policymakers have been unable to agree on a solution for them.

But recently, new data from a little-noticed part of the Medicare program have focused attention on one possible answer: a special appeals panel that would review denied treatments and be fully independent of the health care companies.

The idea has been raised before, but it had been stymied by concerns that it would only lead to a tangled mess of grievances and lawsuits.

Now, the surprising information on an appeals process inside Medicare has suggested otherwise and provided a jolt of energy to efforts to pass new protections for patients in the upcoming session of Congress. The data indicate that one of the most serious issues pitting families against the huge health care concerns might be resolved amicably without major new bureaucracies, extensive new regulations or lawsuits.

“The Medicare experience provides a good pilot program for people to look at in seeing how these appeals work,” said Diane Rowland, executive vice president of the Kaiser Family Foundation, a nonprofit health policy think tank based in Palo Alto.

Independence Called Key to Success

The key to the panel’s success is that it is independent--”that’s the heart of what makes it attractive to patients,” said Carol Cronin of the Department of Health and Human Services.

The new data come from the Center for Health Care Dispute Resolution, a private organization in Rochester, N.Y., that handles the appeals for the 6.5 million Medicare patients who are enrolled in managed care plans. About 16% of Medicare’s overall membership belong to such plans.

For years, health officials paid little attention to the appeals panel’s record because few patients actually used it.

But recent reports indicate that increasing numbers of Medicare’s managed care patients are taking their complaints to the independent group. The information suggests the patients consider the process fair and are able to get quick dispositions of their cases. The records also suggest the process is deterring unreasonable rejections by companies.

To be sure, it would be a giant leap to extend the small-scale Medicare panel to the 150 million people with private insurance. Still, since 17 states already have programs to handle at least some managed care appeals, it would be possible to build on the state systems, according to experts.

Funding and training would have to be increased so that reviewers could evaluate appeals from an array of insurance plans rather than just a few.

But if that could be done, both patient advocates and health plan representatives say, the nation’s expanding managed care system might finally glimpse what has long eluded it: a way of resolving disputes that both companies and patients can trust.

Objectivity of Process Proving Popular

In Medicare’s managed care, “members are satisfied because they are comfortable with the objectivity of the process,” said Nancy Monk, vice president of public affairs for Pacificare of California, which has 1 million enrollees in its Medicare managed care plans.

In the Medicare system, when the independent organization gets an appeal from an unhappy managed care patient, it obtains second opinions from doctors and lawyers who have no financial relationship with the patient’s health plan.

The appeals system also allows elderly patients to appeal any disagreement about care.

Most consumers who are denied treatments by their health plan can only appeal to their plan’s internal review process. The additional appeals allowed in the 17 states are accepted only on limited grounds.

In the Medicare system, records show that nearly 15,000 patients took their disputes to the independent appeals process in 1998, about twice as many as in 1997. But that is still a tiny fraction of 1% of the total patients in Medicare managed care plans.

Meanwhile, the number of health plan decisions that were reversed continued to fall, from 1 in 3 several years ago to 1 in 4 now.

What’s happening, officials say, is that patients and companies are getting better at making reasonable judgments.

Another attractive feature of the Medicare system is its cost. According to David Richardson, president of the Center for Health Care Dispute Resolution, the program costs less than 50 cents per member per year.

The new information is adding ballast for lawmakers in both parties who are pushing to move quickly this year to provide an array of managed health care protections for American consumers.

The chief reforms being considered by both parties include guaranteeing that emergency room visits will be covered, allowing more direct access to specialists and helping patients resolve their disputes over their health plans’ decisions.

In surveys, consumers put fair, accessible handling of their disputes at the top of their list of new protections they would like the most.

System Not Expected to Lead to Suits

In the past, lawmakers and experts have been deterred by a vision of a tremendous pile of patient complaints--from the most trivial to the most serious--leading to lawsuits and driving up the costs of health plans and health care.

However, a close look at the Medicare appeals system suggests that, once given access to an independent review, patients are unlikely to take a dispute to court.

“I can see why there would be nervousness about saying ‘Let’s open up the gates and let everything come through,’ said Karen Politz, a health policy expert at Georgetown University. “But with a decade of experience in Medicare, they have had it open and automatic for 10 years, and there just haven’t been a lot of cases.”