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 noted that: (1) the HMOs in its study have most elements identified as important by regulatory, consumer, and industry groups; (2) however, GAO found: (a) considerable variation in how the HMOs specify certain policies; (b) poor understanding of HMO systems by members; and (c) a lack of consistency in the way the HMOs define, collect, and maintain data in complaints and appeals; (3) GAO examined HMOs' time periods, decisionmaking processes, and communication with members regarding their complaints and appeal systems; (4) consistently, the plans have 9 of the 11 key elements in their policies and procedures; (5) even where GAO found a policy or procedure to be common across HMOs, plans exhibit considerable variation in the specifics of certain policies; (6) most HMOs told GAO that they include medical professionals among the appeal decisionmakers; some plans use physicians not employed by the plan to review appeals; (7) although the majority of HMOs' complaint and appeal systems include most of the important elements, consumer advocates expressed concern that such systems are not fully meeting the needs of enrollees; (8) advocates specifically noted the lack of an independent, external review of plan decisions on appeals and noted members' difficulty in understanding how to use complaint and appeal systems; (9) the most common complaints were about medical or administrative services, quality of care, and claims issues; the most common appeals were appeals of benefits issues, denial of payment for emergency room visits, and referral issues; and (10) all HMOs in GAO's study told GAO that they analyze complaint and appeal data to identify systemic problems and opportunities for improvement.