Consumer Protection in Private Health Insurance: The Role of Consumer Complaints. 1. Internet Complaints Information System (ICIS)

06/01/2000

Features

Complaint categories: ICIS, the electronic searchable database, contains closed complaints from January 1996 onwards, with key fields being the type of coverage and the reason for the complaint. Attachment 6 provides the TDI listing of these fields. TDI uses NAIC complaint codes and submits complaints data to the NAIC complaints database. The "reasons for complaint" field includes several fields relevant to monitoring the implementation of patient protection legislation, including:

  • access to care;
  • continuity of treatment (patient protection rules);
  • denial of claim;
  • denial of payment for emergency care (patient protection rules);
  • disclosure of benefit (patient protection rules);
  • financial incentives (patient protection rules);
  • material change made in contract (patient protection rules);
  • medical necessity;
  • network denial/termination of provider (patient protection rules);
  • out of network referral (patient protection rules);
  • primary care provider selection (patient protection rules);
  • quality of care;
  • retaliation by managed care plans (patient protection rules); and
  • tort liability shift to provider (patient protection rules).

ICIS outputs - In addition to its search capacity, ICIS provides automatically generated standard reports according to: line of insurance, quarter, and region.

Data Analysis

Changes in type of complaints about HMOs - Figure 7.1 shows annual trends since 1997 in the reason for complaints about HMOs, generated from the ICIS standard reports. The strengthening of the prompt payment law in 1997 saw over a five-fold increase in complaints about claims handling delays between 1997 and 1998. As a result, these complaints now comprise 47% of all complaints about HMOs, compared with only 28% in 1997. While these complaints dominate the complaint categories, it is important to recChanges in type of complaints about HMOs - Figure 7.1 shows annual trends since 1997 in the reason for complaints about HMOs, generated from the ICIS standard reports. The strengthening of the prompt payment law in 1997 saw over a five-fold increase in complaints about claims handling delays between 1997 and 1

Figure 7.1: Types of HMO Complaints, Texas, 1997-1999

Figure 7.1: Types of HMO Complaints, Texas, 1997-1999

Changes in health insurance complaints - Figure 7.2 shows trends in the reason for health insurance (non HMO) complaints. Again, the prompt payment law changes resulted in claims handling delay complaints almost tripling between 1997 and 1999. Apart from these complaints, the largest growth in health insurance complaints was about unsatisfactory settlement offers (an 105% increase between 1997 and 1999). In contrast to complaints about HMOs, denial of claim complaints about health insurance plans increased.

Figure 7.2: Types of Health Insurance (non HMO) Complaints, Texas, 1997-1999

Figure 7.2: Types of Health Insurance (non HMO) Complaints, Texas, 1997-1999

Growth in HMO and Health Insurance complaints - Figure 7.3 shows the growth in complaints about health insurance and HMOs from 1997 to 1999. The major findings are:

  • The more rapid growth in HMO complaints relative to health insurance complaints - From 1997 to 1999 HMO complaints have grown by 220%, while health insurance complaints grew by 86%. Some of this may reflect differential growth in market share over the period. TDI regulators commented that the growth in HMO complaints reflects both the growth of covered individuals and providers under contract. As consumers move from indemnity insurance to HMOs, there is an increase in complaints due to lack of understanding about how HMOs operate.
  • The higher absolute level of health insurance complaints - In 1999 about 60% of all complaints were about health insurance. However it is not possible to compare the complaints rate for traditional insurance and HMOs, as TDI does not keep market share data on indemnity insurance on a regular basis.
  • HMO complaints are more likely to be justified than health insurance complaints - Over the period HMO complaints were more likely to be justified (41%) than health insurance complaints (31% justified).

Figure 7.3: Trends in Health Insurance and HMO Complaints, Texas, 1997-1999

Figure 7.3: Trends in Health Insurance and HMO Complaints, Texas, 1997-1999

Note: ICIS contains only closed complaints; hence data for late 1999 is likely to be still incomplete. Complaints data is dynamic with complaints moving between open and closed status. Accordingly, TDI reruns ICIS data for the four previous quarters to take into account changes that may have occurred.

Assessment of the report

Consumer friendliness - While ICIS provides unprecedented access to detailed information about insurance complaints, it is unlikely to be used by consumers interested in making health insurance purchase decisions. Rather, it is a tool for the industry, policy analysts and regulators interested in examining aggregate trends.

Monitoring implementation of patient protection - TDI has incorporated an extensive list of new complaint category codes in ICIS dealing with particular patient protection rules. In addition, Attachment 7 contains internal data provided by the HMO Quality Assurance Section with new, more comprehensive complaints codes and data for fiscal year 1999. These comprehensive codes in nine quality assurance categories were added to TDI's complaints tracking database, called CIS, and ICIS, the internet publicly available complaints database, will also now reflect this data. In the absence of centrally collected and audited data on HMO grievances, the HMO Division is the most reliable source of complaints data relating to patient protection issues. Its coding systems on patient protection complaints would appear to surpass that of most of the other states included in this study.