HMO Complaints and Appeals

With the growth of managed care, health plans have increased controls on patients' access to and use of costly services. Although these controls have helped to curb the growth in health care spending, they have also added to consumers' confusion and dissatisfaction. A health plan's complaint and appeals system provides a way for enrollees to signal their dissatisfaction and challenge denials of coverage. GAO surveyed 38 health maintenance organizations (HMO) in five states and found that their complaint and appeals systems included 9 of 11 key elements identified by regulatory, consumer, and industry groups as important for complaint systems to have. This report discusses these key elements and identifies ways in which systems can be improved and ways in which data about complaints and appeals can be used to enhance oversight, accountability, and market competition. GAO summarized this report in testimony before Congress; see: HMO Complaints and Appeals: Plans' Systems Have Most Key Elements, but Consumer Concerns Remain, by Bernice Steinhardt, Director of Health Services Quality and Public Health Issues, before the Senate Committee on Labor and Human Resources. GAO/T-HEHS-98-173, May 19 (nine pages).

GAO noted that: (1) a majority of HMOs in GAO's study incorporated most criteria considered important for complaint and appeal systems, however, consumer advocates remain concerned that complaint and appeal systems do not fully meet member needs; (2) additionally, HMOs in GAO's study do not uniformly collect and report data on the complaints and appeals they receive to health care regulators, purchasers, or consumers; (3) nationally recognized regulatory, consumer, and industry groups have identified elements that are important to an enrollee complaint and appeal system; (4) 11 elements were identified by at least 2 of these groups and fall into 3 general categories: timeliness, integrity of the decisionmaking process, and effective communication with members; (5) the policies and procedures at the 38 HMOs in GAO's review contained most of the 11 important elements, although they varied considerably in the mechanisms adopted to meet them; (6) the lack of an independent, external review of plan decisions and the difficulty in understanding how to use plan complaint and appeal systems were of particular concern to consumer advocacy groups, who contend that plans' systems, therefore, do not adequately serve the needs of plan enrollees; (7) however, consumer concerns about the impartiality of HMO decisionmakers could be addressed by using independent, external review systems for HMO members; (8) consumer concerns about the difficulty in understanding how to use complaint and appeal systems might be addressed by revising written plan materials, which are often difficult to understand; (9) additionally, although experience to date is limited, such concerns are being addressed by ombudsman programs in some parts of the country; (10) publicly available data on the number and types of complaints and appeals, if consistently defined and uniformly collected, can enhance oversight, accountability, and market competition; (11) comparative data would provide regulators, purchasers, and individual consumers with a view of members' relative satisfaction with health plans, thereby supplementing other performance indicators; (12) all HMOs in GAO's study stated that they review complaint and appeal data to identify problems that the plan needs to address; and (13) several HMOs reported using complaint and appeal data, together with data from other sources, to make changes in benefits and plan processes, and to attempt changes in member and provider behavior as well.