[Congressional Record Volume 140, Number 150 (Tuesday, December 20, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: December 20, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
        CONSUMER PROTECTIONS NEEDED IN HEALTH MANAGED CARE PLANS

                                 ______


                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Tuesday, December 20, 1994

  Mr. STARK. Mr. Speaker, managed care represents a threat and an 
opportunity. The threat is that quality care and innovative treatment 
will be sacrificed to short-term profit. The opportunity is the 
potentially wider availability of health care.
  The tools of managed care--credentialing, case management, control of 
utilization, innovative use of information systems, and efficiency 
through total quality management--have been used in an attempt to lower 
costs through a more rational use of resources. The success of managed 
care programs is questionable, however, and numerous accounts of abuse 
in managed care programs are highlighted each day in newspapers, 
magazines, and scholarly journals.These accounts demonstrate the 
destructive potential of managed care approaches.
  The following is a list of concerns extracted from recent articles. 
This list, combined with emerging data on the effectiveness of managed 
care programs presents convincing evidence that we are just beginning 
to understand the ramifications of one of the most dramatic trends in 
health care--that of managed care. Regulation of the managed care 
industry is necessary to protect consumers' rights to quality health 
care.

                   Issues of Concern in Managed Care


                             i. enrollment

       Agents enroll beneficiaries who do not understand managed 
     care restrictions.
       Some beneficiaries have been enrolled and re-enrolled in 
     plans dozens of times. This is often known as ``churning of 
     enrollees''.
       Lock-in provisions are often not explained.
       Enrollment of the beneficiaries is often done through M.D. 
     offices without complete disclosure to the beneficiary.
       Reports of mass enrollment by trickery. For example, 
     reports state that citizens were asked to come to a local 
     library to ``practice'' filling out their enrollment forms. 
     The forms were then collected and used to enroll unsuspecting 
     seniors in managed care plans.


                             ii. marketing

       Selective marketing is sometimes directed toward healthier 
     seniors.
       Reports that prohibition on marketing practices and 
     fraudulent claims is being violated. Agents may excessively 
     raise expectations of the beneficiary.
       Ex. agents convincing seniors to switch HMO's using false 
     attacks on competitor, e.g., not enough funds to pay doctors.
       Out of network coverage can be misleading. For example, a 
     seventy-five year-old woman with a broken hip was expected to 
     travel across the country following initial hospitalization.


                          iii. quality of care

       Care decisions are often made by inexperienced gatekeepers 
     instead of by on line physicians.
       Inappropriate denial of procedures that are recommended by 
     a physician and covered by Medicare.
       Inappropriate delay in providing services/goods which the 
     HMO approved (ex. wheelchair).
       No professional obligation to the enrollee by the HMO 
     similar to that of the MD/patient or nurse/patient 
     relationship. The lack of professional relationship could 
     limit recourse for appeal by patient.
       Approved list of drugs (formulary) given to MDs may not 
     include name brands.
       Difficulty in getting any drug not on the formulary.
       Quantity of drugs may be limited at the pharmacy so that 
     patients have to make numerous trips to get the drugs for the 
     prescribed number of treatment days.
       Inappropriate refusal to cover a skilled nursing home or 
     failure to develop a safe plan for patient discharge.
       Medicare beneficiaries encouraged to disenroll from risk 
     contract HMOs once they get sick.
       High turnover of HMO physicians. There is a lack of care 
     continuity.
       Patients are assigned physicians rather than choosing them.
       There is a need to protect patient confidentiality. For 
     example, software packages for internal outcomes-related 
     criteria are shared with health professionals in managed care 
     plan/hospital not on patient case.
       Enrollee complaints about waiting for appointments.


                        iv. oversight/regulation

       There is often no pattern for state regulation of HMOs. 
     There are no uniform state quality assurance requirements.
       Advocates express frustration at lack of oversight efforts 
     in federal HMO regulation.
       No uniform national standard requirement for solvency and 
     quality assurance.
       The split in oversight responsibility at the state level 
     leads to gaps:
       Insurance departments have oversight over business issues 
     and contracts;
       Health departments regulate quality of care and credentials 
     of providers;
       Complaints and ratings are areas of interaction. However, 
     in practice, ratings are primarily dealt with by the 
     Insurance Commissioners.
       Preferred Provider Organizations (PPOs) are regulated only 
     when they assume risk.
       There is a lack of uniform comparative information on HMO 
     plans for consumer use.
       HMOs liability for denial of care may be inappropriately 
     limited.


                           v. provider issues

       In some cases, there are limited contract termination 
     rights for physicians.
       There are some reports of limited referrals to specialists 
     in the network when referral is appropriate.
       Need for more comprehensive utilization review standards.
       Unclear utilization standards.
       Difficulties getting prior authorization.
       Inadequately qualified reviewers.
       Standards and process differ to every plan.
       Plan standards and processes constantly changing.
       No provider input into developing standards.
       Some managed care plans use a physician's name in a 
     marketing appeal without approval from the physician.
       Some managed care plans do not notify physicians when they 
     are seeking to create or expand a network.
       Refusal to reimburse non-network providers for emergency 
     out-of-area services.
       ``Gag rule'' to limit information providers may give 
     patients regarding alternative treatments (Rep. McDermott).
       Non-HMO providers pursue patients for bills that are the 
     responsibility of the HMO.
       Some HMOs may hire ``problem'' physicians.
       Providers rate/evaluated based on their cost of practice 
     procedures (referrals/ tests/hospitalizations).


                  vi. grievance procedures/due process

       Review by an HMO may take as long as the HMO wants to 
     extend it--time works against the elderly sick.
       Failure of HMOs to meet requirements of notice of right to 
     appeal.
       Beneficiary needs notice of the right to submit independent 
     information to support his position when a treatment is 
     denied.
       Beneficiary may be denied care without being shown the 
     information on which the decision was made.
       No paperwork means no notice of how benefits, particularly 
     drug benefits, are calculated.
       There is often no notice to the beneficiary that the drug 
     benefit limit is fast approaching so that seniors can budget 
     for payments that will be inevitable.
       Wholesale drug price the HMO uses to calculate benefit may 
     exceed retail cost at other pharmacies.
       In many cases, there is no immediate access to an 
     independent peer review authority.
       There is no right to have representation at appeal.
       Medicare beneficiary appeals take too long to resolve--4 to 
     6 months on average.
       No advocates for the consumer in the HMO.
       Beneficiaries have problems getting reimbursed for out-of-
     area emergency services.

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