[Federal Register Volume 61, Number 222 (Friday, November 15, 1996)]
[Notices]
[Pages 58568-58571]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28377]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General


Publication of the Medicare Beneficiary Advisory Bulletin on HMO 
Arrangements

AGENCY: Office of Inspector General, HHS.

ACTION: Notice.

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SUMMARY: This Federal Register notice sets forth a recently issued 
Medicare Beneficiary Advisory Bulletin, developed in cooperation with 
the Health Care Financing Administration's Office of Managed Care, that 
identifies potential fraud and abuse issues related to the enrollment, 
the provision of services, and the disenrollment of Medicare program 
beneficiaries in health maintenance organizations (HMOs). This Advisory 
Bulletin has been made available to many consumer and health care 
association groups, and is now being reprinted in this issue of the 
Federal Register as a means of ensuring greater public awareness of 
beneficiary rights regarding HMO participation and services.

FOR FURTHER INFORMATION CONTACT: Joel J. Schaer, Office of Management 
and Policy, (202) 619-0089.

SUPPLEMENTARY INFORMATION: The Office of Inspector General was 
established by Congress to find and eliminate fraud, waste and abuse. 
It periodically issues Special Fraud Alerts and Advisory Bulletins to 
show Medicare beneficiaries where and how to look for potential 
problems. The Health Care Financing Administration's Office of Managed 
Care works to ensure that Medicare beneficiaries are given quality 
health care in their HMO plans.
    This specific bulletin is designed to help beneficiaries identify 
and report improper practices, and should be helpful to Medicare 
beneficiaries who are thinking about joining an HMO as well as to those 
who are already enrolled. Specifically, this bulletin provides 
information about HMO obligations and beneficiary rights regarding HMO 
enrollment, including a Medicare beneficiary's rights to enroll in an 
HMO regardless of age or health status. It also gives detailed 
information on a beneficiary's rights to medical services, such as 
emergency and out-of-area care, their rights to disenroll, and provides 
examples of situations in which beneficiaries have the right to file a 
complaint or appeal an HMO's decision.
    A reprint of this Medicare Beneficiary Advisory Bulletin follows.

MEDICARE BENEFICIARY ADVISORY BULLETIN

What Medicare Beneficiaries Need To Know About Health Maintenance 
Organization (HMO) Arrangements: Know Your Rights

Introduction

    If you are thinking of joining a Medicare contracting health 
maintenance organization (HMO), or are enrolled in an HMO, this 
advisory bulletin gives you important information. In addition, this 
bulletin also tells you how you can get help and where you can make 
complaints if you believe any of your rights have been violated or the 
HMO has acted inappropriately.

What Are Medicare Contracting HMOs?

    Medicare contracts with HMOs to provide a full range of Medicare 
benefits to you. Medicare contracting HMOs must give you all the health 
care services that are covered under the Medicare program, except 
hospice services (See your Medicare Handbook for specific details). In 
addition, HMOs may offer additional benefits, either at no charge or 
for an additional charge.
    There are two types of Medicare contracting HMOs - risk HMOs and 
cost HMOs. Most HMOs are risk HMOs, and this bulletin deals exclusively 
with risk HMOs 1.
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    \1\  You should find out whether the HMO you are considering 
joining is a risk or cost HMO. If it is a cost HMO, be sure to 
request additional information about the operation and benefits 
associated with this type of plan. Some of the issues raised in this 
bulletin may also apply to cost HMOs.
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    In general, if you enroll in a risk HMO plan, sometimes called a 
health plan or plan:
     You must get all of your medical care through the plan's 
doctors, hospitals, skilled nursing facilities, home health agencies, 
and other health care providers. You are ``locked-in'' to receive care 
through your HMO plan. You may, however, get emergency care and 
unforseen out-of-area urgently needed care when necessary from non-plan 
providers. Some plans may offer a point-of-service option which allows 
members to use non-plan providers in certain cases.
     You must select a primary care doctor participating in the 
plan. This doctor is responsible for coordinating your care. You must 
obtain a referral from this doctor in order to see a specialist or 
obtain other services through the plan.

Part I: Enrollment and Disenrollment Rights

Enrollment Rights

    When you are considering enrolling in an HMO, the HMO:
     Must provide you with complete and accurate information
     Must enroll you without regard to your health status
     Must not offer you gifts or other financial inducements to 
encourage you to enroll.

Complete and Accurate Information

    Before you decide to enroll in a plan, HMO sales, marketing or 
other plan representatives must give you complete and accurate 
information about the benefits and the services their HMO provides.
    Make sure the HMO representative tells you whether the HMO offers 
any additional benefits besides those benefits covered under the 
Medicare program. If so, there may be limits on how often you can use 
the benefits or how much the HMO will pay for them.
    For example, if you take prescription drugs, you should ask the 
plan before you enroll if the drugs you take are covered. If the drugs 
are covered, ask about whether there are limits to the coverage and 
whether you are required to use certain pharmacies.

[Note: Many plans do not cover all prescription drugs. Plans may set 
a maximum dollar amount on the drugs they cover each quarter or each 
year.]

    In addition, the HMO representative must tell you if the HMO 
requires copayments for any services, including drugs, and the amount 
of such copayments.

[Note: Additional benefits and copayments may change each year.]

    Make sure that sales, marketing or other plan representatives tell 
you about how their HMO operates and about all HMO providers and 
facilities that will be available to you in your area. This

[[Page 58569]]

includes the home health agencies and skilled nursing facilities 
associated with their HMO. Make sure you understand if there are any 
limitations on using the HMO-affiliated providers. For example, certain 
hospitals may only be used for special services such as transplants. 
Some doctors may only work at certain hospitals or with certain 
specialists.
    Make sure you understand which primary care doctors will accept you 
as a new patient. Some doctors may not be accepting new patients. Also 
make sure you understand under what circumstances and how frequently 
you can change primary care doctors and what happens if any of your 
doctors leave the plan. In addition, sales, marketing and other plan 
representatives must tell you that you will be ``locked-in'' to the HMO 
and its providers once you enroll and what this will mean to you.
    Sales, marketing and other plan representatives must tell you that 
when you enroll in a risk HMO, you cannot continue to use any of your 
current doctors or hospitals unless they are affiliated directly with 
the HMO.
    If your current doctor is affiliated with the HMO, you still need 
to be sure that he or she can accept you as an HMO patient.
    If you should choose to go to a doctor or hospital not affiliated 
with your plan, you will have to pay the entire bill yourself.
    Sales, marketing and other plan representatives must clearly and 
accurately describe, and must not misrepresent, HMO benefits and 
services.
    Medicare law prohibits HMO representatives from enrolling you in an 
HMO without your permission.
     You are not required to sign any HMO forms unless you are 
enrolling in an HMO. If a sales representative gives you a form to sign 
and you are not sure what it is, do not sign it. The plan may not ask 
you to sign what they say is either a form requesting more information, 
or an acknowledgement that you heard a sales presentation or received 
information about the HMO, if the form is really an enrollment form.
     Do not give the HMO your Medicare or Social Security 
number unless you are enrolling.
     HMO marketing representatives are not allowed to come to 
your home unless you have given them permission in advance. This 
restriction applies to any personal residence, including your room in a 
nursing home, rest home or assisted living arrangement.
    If you received false, misleading or incomplete information, then 
you may have been improperly enrolled in an HMO. If so, you have the 
right to be retroactively disenrolled and to return to traditional 
Medicare coverage, or to enroll in another HMO.

[Note: Of course, you can disenroll from an HMO at any time. See 
Disenrollment section. Also, enrolling in a new Medicare HMO 
automatically disenrolls you from your current HMO.]

Enrollment Without Health Screenings

    An HMO must enroll all eligible Medicare beneficiaries who want to 
enroll, regardless of their age, health status or the amount or cost of 
the health services needed.
    HMOs are not allowed to make you undergo a health screening before 
you enroll. Pre-enrollment health screening or questions about your 
health or physical status are against the law. These screenings can be 
used by the HMO to identify sick beneficiaries and those with chronic 
conditions, and to discourage them from enrolling.

 [Note: There are two exceptions to the rule about health screening 
before enrollment. An HMO can ask you whether you are receiving 
kidney dialysis or have received a kidney transplant, or whether you 
are receiving hospice services. If you are receiving these services 
or have these conditions, you can not enroll in an HMO.]

    Before you enroll, sales, marketing or other HMO plan 
representatives should not ask:
     How often you visit the doctor
     How many doctors you have
     How many times you have been hospitalized in the last year
     Whether you have any conditions for which you take 
medicine on a regular basis, or
     Whether you exercise regularly.
    Also be alert for improper screenings when an HMO requires or 
offers:
     Free physical exams before enrollment
     Free screening or diagnostic tests at health fairs or at 
marketing presentations.
    In addition, watch for sales, marketing or other HMO plan 
representatives who tell you that the HMO would not be a good choice 
for you because (1) referrals to specialists would be limited, (2) you 
might have to wait for services, or (3) services would be more limited 
in an HMO.
    After you enroll, the HMO may ask you questions, give you 
questionnaires to fill out, or give you a physical exam to assist them 
in providing your care.

Enrollment Without Being Offered Free Gifts or Other Inducements

    It is illegal for an HMO to offer you free gifts or incentives to 
get you or anyone else to enroll in an HMO.
    HMOs are not allowed to offer you free gifts to encourage you to 
enroll or as a reward for attending marketing presentations. They are 
not allowed to offer incentives to get you to recommend them to your 
friends either. These incentives are not allowed because they could 
affect your decision to enroll or to recommend that a friend enroll. 
It's okay for the HMO to offer promotional materials worth less than 
$10, such as key chains, mugs and calendars, as well as light 
refreshments at a marketing presentation, as long as these are given to 
everyone regardless of their decision to enroll.

Disenrollment Rights

Disenrollment Is Your Decision

    Once you are enrolled in an HMO, you may wish to disenroll at some 
point. Whether you stay enrolled in or leave an HMO, it is your 
decision. Your HMO cannot try to keep you from disenrolling nor can the 
HMO try to get you to leave.

When You Decide To Leave Your HMO

    HMOs must process written requests for disenrollment in a timely 
manner.
    HMOs may not delay, withhold disenrollment information or forms, or 
otherwise make it hard for you to disenroll from a plan. If you want to 
disenroll from your HMO because you are unhappy or dissatisfied with 
services, or for any other reason, your HMO should help you disenroll. 
You must submit a written request to disenroll, and the HMO should help 
you complete any necessary paperwork.

[Note: Whoever has authority under State law to make health care 
decisions for you can enroll you in or disenroll you from an HMO.] 
You may also go to a Social Security office to disenroll from your 
HMO.

    Make sure your HMO tells you the date when your disenrollment is 
effective. It is usually the first day of the month following receipt 
of your disenrollment request. If you get services from a non-HMO 
provider when you are still a member of your HMO, neither your HMO nor 
Medicare will pay.

[Note: If you disenroll from a HMO and have any pre-existing medical 
conditions, many Medicare supplemental insurance (Medigap) policies 
will not sell you a policy or will impose a waiting period for those 
conditions. That means you could be without supplemental insurance 
coverage for that condition for a period of time unless you enroll 
in another HMO. Also, some Medigap policies only have open 
enrollment periods once a year. Remember to look for a policy that 
will provide coverage for your pre-existing conditions, and will be 
available when you disenroll.]

[[Page 58570]]

If Your HMO Encourages You To Disenroll

    The premiums that your HMO gets from the Medicare program are 
designed to reimburse the plan for all the covered services you need. 
The HMO is not allowed to try to get you to leave or to delay or deny 
you services because you need heart surgery, transplants, long term 
nursing or rehabilitative services or other expensive treatments.
    Your HMO must not encourage you to disenroll:
     Because it will be expensive to treat your condition or 
meet your medical needs.
     By delaying expensive medical care for a long time, or by 
denying such care.
     By telling you that you can re-enroll in the HMO after you 
have received the necessary high cost services outside the HMO.
    Unless you enroll in another HMO, if you disenroll from the HMO to 
get a specific service or procedure, you will have to pay any 
deductibles or coinsurance under the payment rules of the traditional 
Medicare program.

Part II: Your Rights to Medical Services in an HMO

    The next part of this advisory bulletin tells you about your rights 
to medical services and benefits in a Medicare contracting HMO once you 
are enrolled.

Your Rights to Services

    When you are enrolled in an HMO, you have a right to:
     Medically necessary care in a timely manner.
     Emergency medical care and unforseen out-of-area urgent 
care.
    Your HMO must provide all medically necessary covered services. 
Covered services include all the benefits provided under the Medicare 
program and any additional services offered by the HMO.
    Your HMO must have enough qualified primary care and specialty care 
doctors, as well as other health care providers and facilities, to 
provide you with all medically necessary covered services. If the HMO 
does not have enough qualified providers, it must arrange for services 
to be provided to you outside the plan at no extra cost to you.
    HMOs must make necessary medical care and services available and 
accessible to you. The HMO may not:
     Create or permit delays like repeated busy signals when 
you call to make appointments.
     Make you wait an unreasonably long time for appointments.
     Unreasonably restrict the days or hours that you may be 
seen by the plan's providers.
     Create or permit unreasonable delays in arranging for 
surgery, hospitalization or other services by using review or approval 
mechanisms.
     Inappropriately deny or limit referrals to specialists in 
or outside the plan.
     Unreasonably limit the amount of nursing home, home health 
or therapy services.

Getting Emergency and Out-of-Area Care

    Your HMO must pay for emergency care and for unforseen urgently 
needed out-of-area care you get from non-HMO health care providers, 
including necessary follow-up care.
Emergency Care
    Emergencies are situations when you need medical care immediately 
because of sudden or suddenly worsening illness or injury, and the time 
needed to reach your plan doctor or hospital appears to you to risk 
permanent damage to your health.
    Your HMO must not:
     Tell you that you can only get emergency care through its 
doctors and at its facilities.
     Require you to get prior authorization for emergency 
services.
     Deny your claim for emergency services after you get the 
services, because what appeared to be an emergency condition turned out 
not to be an emergency condition.
    If you believe you have an emergency, you may seek emergency care 
outside the plan and the HMO must cover and pay for those emergency 
services you got from the outside provider. Your HMO must pay for all 
procedures performed during the evaluation and treatment of your 
emergency condition, unless those services were completely unrelated to 
the emergency condition. If possible, you should call (or have someone 
call) your HMO as soon as possible when receiving emergency care.

[Note: You should be aware that hospitals are required by law to 
provide screening for emergency medical conditions. If necessary, 
hospitals must provide stabilizing treatment or arrange for an 
appropriate transfer to another facility, whether or not your HMO 
authorizes these services. The hospital may not refuse to provide 
emergency services to you because your HMO will not authorize such 
services.]
Out-of-Area Urgent Care
    Urgent care situations are when you have an unexpected illness or 
injury while you are temporarily outside the HMO's service area. Your 
HMO must pay for your urgent care if:
     Your illness or injury is unexpected; and
     You are temporarily away from the HMO service area; and
     Your illness or injury requires medical care which cannot 
be delayed until you return home.
    If possible, you should call (or have someone call) your HMO as 
soon as possible when receiving out-of-area urgent care.

Transfers From Another Facility

    An HMO may not attempt to transfer you back to its own facility 
from another facility outside its plan before the non-HMO facility 
decides that your condition is stabilized.

Coverage of Follow-Up Care

    Your HMO must cover all medically necessary follow-up care related 
to your emergency condition, or unforseen out-of-area urgent care, 
provided outside the plan if that care cannot be delayed without 
adverse medical effects to you.

Part III: How To Make a Complaint

    You should be aware that you and your HMO may disagree about what 
care is medically necessary.
    You have the right to appeal if you believe that medically 
necessary care has been denied, reduced or terminated inappropriately.
    Here are some examples of situations in which you have the right to 
appeal:
     Your doctor does not prescribe covered treatments or 
tests, refer you to a specialist, or does not admit you for hospital 
services you believe you need.
     Your HMO refuses to authorize or provide tests, treatments 
or referrals recommended by your primary care doctor.
     Your HMO does not authorize a second opinion on the need 
for surgery. (Second opinions are a Medicare covered benefit.)
     Your HMO or your doctor decides to reduce or terminate 
services you are already receiving, such as home health care or 
physical therapy, or decides to discharge you from a nursing home.
     You encounter an unreasonable delay or difficulty in 
arranging for surgery, hospitalization, tests, doctor visits or any 
other needed services, and you believe this is a way of denying you 
care.
     Your HMO will not pay your claims for emergency care or 
out-of-area urgent care you received from a non-HMO provider.
     A decision is made to discharge you from a hospital before 
you believe you are ready to be discharged.


[[Page 58571]]


[Note: When you are in the hospital and your HMO decides that you do 
not need to be there any longer, you can ask for immediate review by 
a Peer Review Organization (PRO). If you ask for a immediate review, 
you can stay in the hospital at no charge during the review. The 
review usually takes at least 24 hours.]

The Appeals Process

    Your HMO is required to notify you when it denies, reduces or 
terminates services or payment for services. (Whether or not you have 
written notification, you may appeal.) The HMO must also provide you 
with written information about your appeal rights and the process you 
must follow, including time frames for each step.
    The appeals process begins with your written request to the HMO 
asking it to review the denial, reduction or termination. If the HMO 
does not reverse its decision, the appeal automatically goes next to an 
independent review organization that contracts with Medicare to review 
HMO denials. If the review organization does not decide fully in your 
favor, you may request a hearing from Medicare.
    If you need help in deciding whether to appeal, or if you have 
questions regarding what you must do to appeal, you can contact your 
local or State Insurance Counselling and Assistance (ICA) Program. Call 
the Medicare Hotline at 1-800-638-6833 to get the number of the ICA in 
your area.

Complaints About Quality

    If you have complaints about the quality of care you have received 
by your HMO or any of its providers, including hospitals, skilled 
nursing facilities and home health agencies, you can complain to your 
HMO or a Peer Review Organization (PRO). PROs are groups of doctors and 
health care professionals that monitor the quality of care provided to 
Medicare beneficiaries. Call the Medicare Hotline or your ICA to get 
the number of the PRO serving your area (See Part IV: Where to Go For 
Help). The PRO will investigate your complaint.

Other Complaints

    If you have other complaints about the HMO, such as physician 
demeanor or adequacy of the facilities, contact your HMO directly. Your 
HMO must have written procedures, including time frames, for 
investigating these types of complaints (also called grievances). The 
HMO representatives will review these complaints and notify you in 
writing of their conclusions.

Part IV: Where To Go for Help

What You Need To Do if You Believe Your HMO Is Not Meeting Its 
Obligations or May Be Violating Your Rights

     Complain directly to the HMO. You must write to your HMO 
asking it to reconsider its decision to deny, reduce or terminate care, 
coverage or payment. Every HMO is required to have a process to handle 
complaints, and the HMO must give you detailed information on how to 
file a complaint.
     Contact your local or State Insurance Counselling and 
Assistance Program (ICA) which has been set up to assist Medicare 
beneficiaries in resolving problems with, or answering questions about, 
their Medicare benefits. To obtain the phone number of your ICA, you 
can call the Medicare toll-free Hotline at 1-800-638-6833 or your local 
area Agency on Aging office. To obtain the number of your local aging 
office, you can call 1-800-677-1116 (the Eldercare locator number).
     Contact the HHS Office of Inspector General through its 
toll-free Hotline at 1-800-HHS-TIPS (1-800-447-8477), or contact the 
HCFA Medicare toll-free Hotline at 1-800-638-6833. Contacting one of 
these offices about improper practices will not resolve your individual 
problem, but may help to stop any improper practices.

Quiz Yourself

    There are several important questions you should ask yourself 
regarding HMO participation.
    Do you know:
     What lock-in into an HMO means?
     The role of your primary care doctor?
     How the HMO's referral process works?
     The HMO's rules and responsibilities about paying for 
emergency and out-of-area urgent care?
     Whether HMO enrollment is a good choice for you if you 
travel or are out of the HMO service area for long periods of time?
     How to disenroll from an HMO?
     How to complain if you have a problem?

    Dated: October 18, 1996.
Michael Mangano,
Principal Deputy Inspector General.
[FR Doc. 96-28377 Filed 11-14-96; 8:45 am]
BILLING CODE: 4150-04-P