Consumer Protection in Private Health Insurance: The Role of Consumer Complaints. 2. Comparing Texas HMOs Annual Reports



Scope - This report is comprised of two main sections. Firstly, it contains the results of the Consumer Assessment of Health Plans Survey (CAPHS) which was administered by an independent survey vendor certified by NCQA to a sample of Texas health plan recipients. Secondly, it contains data on consumer complaints about HMOs made to the TDI and the results of appeals made to the Independent Review Organization (IRO).

Period - OPIC has produced two reports for calendar years 1998 and 1999. Note that the 1999 report is actually seven separate reports which group the results regionally.

Coverage (size) - The report excludes HMOs with zero registered complaints and distinguishes between plans with less than or greater than 50,000 enrollees. The report cautions against making accurate statistical comparisons for plans with less than 50,000 enrollees. Included in the report are "Basic Service HMOs" defined to mean those which provide a full range of medical benefits, including physician services, inpatient and outpatient care and other services.

Complainants - The report distinguishes between provider complaints, non-provider complaints and total complaints.

Complaint index - The complaint index is calculated as total closed complaints (whether justified or not) per 10,000 enrollees for the period 1 July to 30 June each year.

Other performance measures - In addition to TDI complaints data, the OPIC report includes the results of the IRO Appeals process. Under the Texas legislation consumers have a right to file an appeal with an Independent Review Organization if their HMO denies medically necessary care. Consumers can simultaneously file a complaint with the TDI. For each HMO the report indicates the number of appeals and the disposition (initial decision upheld, decided in favor of consumer, case decided partially in favor of both HMO and consumer, pending).

Data Analysis

Trends in total complaints - Based on the OPIC 1998 and 1999 reports, Table 7.1 highlights the major contributors to HMO complaints with key findings as follows:

  • A sizeable increase in HMO complaints - From 1997/98 to 1998/99 there was a 58% increase in total complaints against HMOs. However when HMO enrollment was taken into account, this translated into a 29% increase in the total HMO complaint index.
  • The significance of provider complaints - The OPIC report highlights the substantial role played by providers in complaining about HMOs, accounting for 53% of all complaints in 1998/99. However, at least in 1998/99 consumers were responsible for the majority of the growth in HMO complaints. The consumer complaint index grew by 47%, while the provider complaint index grew by 16%.
  • Wide variation in complaint performance across HMOs - The OPIC reports include data on 15 HMOs in 1997/98 and 18 HMOs in 1998/99 with enrollment greater than 50,000 members. There is significant variation in performance across plans, both in the total complaint indices and in their distribution of consumer/provider complaints. Additional information about the performance of specific plans can be found in the attached OPIC reports.

Table 7.1: Trends in HMO Complaints, Texas, 1 July 1997-30 June 1999

  1 July 1997-30 June 1998 1 July 1998-30 June 1999
Total complaints/10,000 enrollees (index) 14.6 18.8
Total complaints (raw number) 4,160 6,562
% provider complaints 59% 53%
% consumer complaints 41% 47%
Range of total complaint indices across plans (lowest and highest complaint indices) 1.5 - 35.4 1.2 - 42.7
Range of % share consumer complaints across plans 17 - 83% 0 - 92%

Note: Includes Basic Service HMOs with enrollment greater than 50,000.

Source: Comparing Texas HMOs 1998 and 1999 Reports, Office of the Public Insurance Counsel

Results of independent appeals - The 1999 OPIC report includes the outcomes of appeals to Independent Review Organizations up to 30 August 1999 as follows:

  • 41% upheld in favor of HMO;
  • 51% decided in favor of complainant;
  • 5% decided partially in favor of both HMO and complainant; and
  • 3% still pending.

While the report includes the individual results for each HMO, the numbers of appeals involved are so small as to make between-HMO comparisons of dubious value.

Assessment of the Report

Comparative data - the report allows consumers to compare the complaints performance of individual HMOs. Given the significance of provider complaints, it is important that the report distinguishes between consumer and provider complaints. Although there is no disaggregation by type of complaint, consumers could use the "consumer" and "provider" complaints as broad proxy indicators of "quality" and "payment" complaint issues respectively.

Consumer friendliness - the report contains a mix of graphical and tabular presentation of results which can help meet the needs of different consumers. While the bar charts provide consumers with the ability to quickly identify the low complaint index HMOs, the tables provide additional information and coverage of all plans, including those with less than 50,000 enrollees.

Monitoring patient protection implementation - the absence of complaint categories means this report is not useful for monitoring the impact of various patient protection measures.

Future plans - OPIC has had feedback that some consumers would like to see another publication providing comparative information on the types of coverage which are available across plans. While OPIC is examining standards for how this information could be presented, insurance companies often customize plans across employers resulting in a multiplicity of product offerings. In regard to the existing HMO report, OPIC is interested in increasing the use of the internet, including making the report more interactive and hence more consumer friendly. OPIC is very aware of the need to balance the amount of information that is useful and the readability of the report.