More MS news articles for March 1999

How's Your Health Plan Treating You?

Labor Dept. Agency Responsible for Revising Regulations Holds Hearing on Customer Relations

By Marc Kaufman
Washington Post Staff Writer
Tuesday, March 2, 1999; Page Z09

Someone in your family is sick and needs potentially expensive care. Your doctor contacts your health plan and orders the treatment, saying it's medically necessary.

But the health plan balks, and after several nerve-wracking days or even weeks denies the request, saying the treatment is unnecessary or inappropriate. You appeal and, months later, you're denied again by the same officials who turned you down to begin with. Defeated, you give up.

Is this worst-case scenario common under today's managed care? Is it the kind of abuse that requires government to step in?

Or is it an unusual, even apocryphal tale, told by opponents of managed care?

These questions were hotly debated last month during the longest public hearing in the history of the Department of Labor's Pension and Welfare Benefits Administration (PWBA). A record 70 people testified over three days, and more than 700 groups and individuals sent in comments, too.

In its capacity as overseer of private employee health benefit programs, the PWBA proposed new regulations in September that would rewrite the 20-year-old rules governing some administrative aspects of how health plans interact with their members.

The centerpiece of the proposed regulation is a requirement that health plans respond to all "urgent" consumer claims for treatment within three days, and all others, including claims for reimbursement, within 15 days. If a claim is denied, a full explanation of the decision would have to be provided, and any appeals would have to be settled within 30 days. And if an appeal is made, someone other than the original claim reviewer would have to decide it.

As PWBA Deputy Assistant Secretary Leslie Kramerich put it at the opening of the hearing, "For us, the proposed regulation is patients' rights; it is a way of strengthening a very fundamental right, the right to a fair process for resolving problems when you feel you've been denied a promised benefit."

Speakers representing organizations from the American Association of Retired Persons to the National Multiple Sclerosis Society vigorously supported the new rules, saying they would begin to give back to patients and health professionals some of the control gradually assumed by managed care plans.

But speakers from the health care industry and business community (as well as groups such as the National Football League Players Association) described the proposed rules as hugely expensive and unnecessary.

"The proposed regulations will lead to excess federal regulation, higher costs for health coverage, and more uninsured Americans," said S. Owen Hunt, representing the Blue Cross & Blue Shield National Association.

According to Hunt, more than 50 percent of all claims are already processed within 24 hours at his Trigon Blue Cross Blue Shield in Virginia, and the new 15-day requirements "would add little value to the health care services we arrange."

Lyle Swallow of the American Association of Health Plans, the organization that represents managed care plans, called the proposals well intended but misguided. In an informal survey, he said, AAHP members estimated that the new regulations would require them to increase their staffs by between 25 and 67 percent.

"The regulations' complex, ambiguous and broad requirements simply would not establish a fair and effective process," he said.

James F. Ball of General Motors agreed. "The proposed rules are rigid and prescriptive, driving administrators to focus more on compliance with arbitrary time frames and procedural detail than on assuring that claims are properly handled," he said. Like several others, he expressed concern that the rules would make it easier, and more attractive, for dissatisfied patients to sue.

And Laurie Havanec of the United Technologies Corp. voiced a common concern when she said: "The regulation will require most, if not all, large-employer plans to make major changes in the way they handle benefit claims, generally to the detriment of both employees and employers."

At the heart of the dispute is a fundamental question: Who should be making decisions about what care a patient receives?

Speaking for the American Medical Association in favor of the proposed regulations, Susan Hersherg-Adelman said doctors are unhappy that managed care organizations are "controlling or influencing medical treatment before the treatment is provided. Denials and delays in providing care directly harm the health and well-being of patients."

A recent AMA survey, she said, found that some managed care companies have begun to define explicitly what treatments are "medically necessary" in terms of lowest cost. Doctors used to make that decision solely on the basis of what was best for the patient, she said.

What's more, after a claim has been denied, the appeals process is stacked against the patient, said Woody Connette of Charlotte, N.C., a lawyer who represents plaintiffs who sue health plans. Currently, he said, there are numerous appeals, and "the more appeals there are, the more the process becomes a rubber stamp. Our experience is the same people are ruling on their own denials."

While physician and patient groups embraced the proposed rules as a way to fix a perceived imbalance in power, employers and health care companies remained adamantly opposed.

"The marketplace is working," said Lee N. Newcomer of the UnitedHealth Group, who pointed out that customers are not clamoring for most of the proposed changes.

Yet, the hearings did reveal some common ground. Both sides agreed that requests for pre-authorization of treatment had to be answered much more quickly than requests for reimbursement. While disputes over denial of treatment tend to get more attention in the news, they account for a minority of claims.

There was also some agreement that consumers needed more confidence in claims appeals processes. Both Newcomer of UnitedHealth Group and plaintiff attorney Connette, for instance, supported the idea that more disputes over experimental treatments and "medical necessity" should be resolved by third-party professionals not involved in the case. Newcomer said his company planned to expand its external review program this spring.

The initial impetus for the PWBA regulations came from the President's Advisory Commission on Consumer Protection and Quality in the Health Care System, which analyzed the nation's transition from a predominantly fee-for-service system to today's managed care norm. With the hearing over and comment period closed, the PWBA will now consider modifying its proposed rules. No timetable has been set for a decision, officials said.

Kramerich said her agency will now re-examine and refine the regulations so that "hopefully, people will find they bring a desirable increase in the integrity and appropriateness of health care responses . . . one that is worth some additional cost."

© Copyright 1999 The Washington Post Company