[Congressional Record Volume 142, Number 135 (Thursday, September 26, 1996)]
[Extensions of Remarks]
[Pages E1725-E1726]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         THE NEED FOR CONSUMER GRIEVANCE RIGHTS IN MANAGED CARE

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                      Thursday, September 26, 1996

  Mr. STARK. Mr. Speaker, today I introduced a comprehensive bill to 
improve consumer and provider rights in managed care plans. I 
introduced the bill late in this Congress so that everyone has the 
opportunity to review the bill over the autumn and suggest changes and 
improvements, prior to its reintroduction in the 105th.
  One major section of the bill requires the timely consideration by 
managed care plans of patient appeals. The Medicare agency is very 
concerned about this area of consumer rights and is proposing a rule to 
better protect patients. Depending on the strength of the HCFA rule, 
the need for the appeals and grievance section of my legislation may be 
fully or partially addressed.
  The following news articles from the Bureau of National Affairs of 
September 18 and 19 describe why this is such an important issue. As 
Bruce Fried, head of the Office of Managed Care states so well: The 
appeal and grievance process is ``fundamentally the most important 
protection our beneficiaries have.''

      Vladeck Urges Managed Care Groups To Improve Appeals Process

       Increasing numbers of health care consumers are feeling 
     powerless in the face of decisions made by their managed care 
     organizations, Health Care Financing Administration 
     Administrator Bruce C. Vladeck said Sept. 17 in urging such 
     groups to improve their beneficiary grievance and appeals 
     process.
       Speaking at the annual meeting of the American Association 
     of Health Plans, the nation's largest managed care group, 
     Vladeck said Medicare managed care organizations should 
     ensure Medicare enrollees are aware of their health care 
     coverage appeals rights; should establish systems that do not 
     deter, and even solicit coverage questions; and should employ 
     staff that are well-versed in Medicare regulations.
       As managed care has grown, ``there is an increasing 
     perception among consumers that they are voiceless and 
     powerless in the system,'' even though they had little or no 
     appeal rights in the fee-for-service system, Vladeck hold 
     conference attendees.
       He urged AAHP members to voluntarily upgrade their appeals 
     and grievance process to parallel HCFA's on-going review of 
     what is requires managed care groups to provide enrollees in 
     this area.
       ``If it doesn't happen spontaneously, we will make it 
     happen.'' he warned.
                                                                    ____


   HCFA Officials Warn HMOs To Provide Good Grievance Plans; Rule in 
                              Development

       Health maintenance organizations that do not provide 
     adequate grievance and appeals

[[Page E1726]]

     procedures to Medicare beneficiaries are violating 
     beneficiaries' constitutional rights and will be closely 
     scrutinized by the program, a Health Care Financing 
     Administration official said Sept. 18.
       HCFA Office of Managed Care Director Bruce M. Fried told 
     managed care representatives that failure to provide an 
     adequate grievance and appeals process to Medicare 
     beneficiaries vilates their 14th Amendment rights to due 
     process and equal protection under the law. It also violates 
     Medicare statutes, Fried said.
       HCFA has made this issue one of its top priorities and the 
     appeals processes in place at HMOs will come under ``enormous 
     scrutiny'' in the coming months, Fried said at a conference 
     on managed care sponsored by HCFA, in conjunction with 
     meetings on Medicare and Medicaid being held this week by the 
     American Association of Health Plans.
       Some HMOs are failing to improve their grievance and 
     appeals process--in which beneficiaries can contest a 
     decision by an HMO to deny or alter health care coverage--to 
     remain competitive in a rapidly growing industry, Fried said.
       ``Human nature being what it is, this simply leads some 
     folks to cut corners,'' Fried said. ``We will be very 
     attentive to that.''
       As of July 1, HCFA had Medicare contracts with 313 HMOs 
     enrolling nearly 4.4 million beneficiaries, according to 
     documents provided by HCFA at the meeting. HMOs are now 
     required to have appeals and grievance processes for Medicare 
     patients, but the quality is mixed and appeals are slow.
       In a speech to the AAHP conference Sept. 16, HCFA 
     Administrator Bruce C. Vladeck also warned HMOs to improve 
     their grievance and appeals process, saying the agency would 
     force them to do so if they do not voluntarily comply.
       Fried called the appeals and grievance process 
     ``fundamentally the most important protection our 
     beneficiaries have,'' adding that it was ``critical'' that 
     HMOs take steps to improve the process.
       ``I don't want to threaten the industry with steps that I 
     am willing to take'' if HMOs do not act, Fried warned.


                   hcfa rule expected by end of year

       HCFA is ``very far down the road'' in developing a proposed 
     rule that for the first time specifically will define the 
     grievance and appeal process requirements for HMOs, Fried 
     said. Among other items, it will include a requirement that 
     grievances be acted upon ``in a matter of days,'' rather than 
     the maximum 60 days required under current law, he added.
       The current grievance and appeals process gives plans 60 
     days to act on a beneficiary appeal and another 60 days for 
     HCFA's contractor to review appeal denials.
       The proposed rule, part of HCFA's Medicare Appeals and 
     Grievance Initiative, is expected to be issued by the end of 
     the year, Maureen Miller, senior policy analyst with the 
     Office of Managed Care's program policy and improvement team, 
     told conference participants.
       HCFA in the rule also will clarify what services 
     beneficiaries are able to appeal, Miller said. The rule will 
     state that in addition to pre-service denials, reduction in 
     care decisions and service terminations also can be appealed, 
     as well as services provided under optional supplemental 
     coverage, she added.
       The rule also will establish new reporting requirements for 
     plans for grievance and appeals procedures and improve the 
     way plans report such information to HCFA, Miller said.
       Miller told plans, however, not to ``sit and wait'' until 
     the rule is published to improve their grievance and appeals 
     process. Plans on their own can shorten the time needed to 
     decide an appeal, which already has been done by many 
     commercial plans, Miller told those attending the conference.
       Plans also can improve their internal information systems 
     so they have more knowledge of who is filing grievances and 
     why and launch an education effort to ensure beneficiaries in 
     skilled nursing facilities and home health care know their 
     appeal rights, Miller said.
       They also can review their marketing materials to ensure 
     they present information on appeals in a clear, 
     understandable way, she added.
       Plans also can better train their staff charged with 
     handling grievances, Miller said. HCFA has learned of staff 
     at some HMOs in these departments who are giving out 
     incorrect information because they are working without 
     relevant HCFA regulations at their disposal, she added.

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