Consumer Protection in Private Health Insurance: The Role of Consumer Complaints. 3. Insurance Company Annual Reports (Grievance data)



Scope - Under the Patient Protection Act 1997 insurers are required to file annual reports on grievance statistics, utilization review procedures, quality assessment summaries (managed health care plans only) and scope of network summaries (managed health care plans only). The first reports were submitted for the calendar year 1998.

Grievance categories - The Insurance Department requires that these reports provide breakdowns of grievances using the following nine categories:

  • Access problems including timeliness and availability of a provider - grievances related to availability of primary care providers, contracted and non-contracted specialty services, time frames in accessing services at provider offices and other access problems;
  • Referral issues - grievances related to referral denials outside physician organizations, within insurer contracted provider panels, and delay in processing of referral authorizations, referral problems affecting continuity of care, and other referral issues;
  • Denials based on medical necessity - grievances related to the denial of services or treatment that are based on medical necessity including preauthorization and case management decisions;
  • Denials based on other coverage laws, including denials based on the service being out of the plan, out of the area or not a covered benefit - grievances related to the denial of services that are not a covered benefit of the plan including health maintenance services received out of contracted provider network, coordination of benefits, and other third party recovery situations;
  • Eligibility - grievances related to initial eligibility, monthly eligibility, COBRA and portability options and other eligibility situations including the timeliness of processing paperwork;
  • Quality of clinical care - grievances related to care received from a provider of service, care not provided and other quality of plan service issues;
  • Quality of plan services - grievances related to customer service provided by the plan within all levels including sub-contracted entities, i.e. pharmaceutical administrators, physician organizations, and vision administrators, and other quality of plan service issues;
  • Emergency services - grievances related to all emergency situations including after hours care, urgency care settings, emergency rooms, ambulance or 911 services;
  • Administrative issues and issues other than those otherwise listed in this section - grievances related to issues that do not fit into categories listed above.

Data Analysis

A summary analysis (Figures 6.2 & 6.3) has been prepared based on downloading the Grievance and Appeal 1998 Annual Summary reports for the five largest Health Care Service Contractors reporting (comprising 80% of the premium volume) - Kaiser Permanente, Regence HMO Oregon, Regence BCBS, Providence Health Plan and Pacificare.

Figure 6.2: Types of Grievances, Five Largest Health Care Service Contractors, Oregon, 1998

Figure 6.2: Types of Grievances, Five Largest Health Care Service Contractors, Oregon, 1998

Of interest, only 39% of grievances were reversed which is lower than the general rule of about 50% applying to external review processes. However there were wide disparities in reversal rate according to the type of grievance. Grievances most likely to be reversed in favor of the consumer were those concerning emergency services (71%), while those least likely to be reversed included access problems (1%), quality of care (4%) and quality of plan services (4%). The most common grievance, "other coverage/not covered" which accounted for 45% of all grievances was reversed in 47% of cases, which is similar to the related grievance category of "medical necessity", reversed in 41% of cases.

Figure 6.3: Share of Grievances Reversed in Favor of Consumer, Five Largest Health Care Service Contractors, Oregon, 1998

Figure 6.3: Share of Grievances Reversed in Favor of Consumer, Five Largest Health Care Service Contractors, Oregon, 1998

Assessment of the Report

Data reliability - The Insurance Division has issued Bulletins (Attachment 4) as to the required format for grievance reports. However regulators believe that it is too early to form a view as to the quality of data submitted by managed care plans under this requirement. The Division is examining the grievance data and its categorization as part of the current market conduct audit, which is targeting domiciled companies. The first stage involved targeting policies and procedures to verify that companies could comply with the reporting and disclosure requirements of the PPA, with the second stage involving auditing actual reporting compliance.

Consumer friendliness - Regulations require that insurance companies submit annual reports in a flexible electronic format, to the extent that the insurer engages in activities including utilization review, quality assessment practices or scope of network monitoring procedures. This regulatory flexibility means that the Annual Reports are somewhat cumbersome to download, with some of these reports being scanned in electronically and containing handwritten rather than typed information. It is currently a time consuming process to compare the performance of insurance companies from the Insurance Division's web site as each of the four measures (grievances, utilization review, quality assessment summaries and scope of network must be downloaded separately for each company.

Monitoring patient protection implementation - Regulators are relying heavily on market conduct examinations to monitor the compliance with the Patient Protection Act since domiciled insurance companies provide coverage for the majority of the population. The market conduct examinations will demonstrate whether or not insurance companies have the required policy and procedures in place. The true compliance will be determined by whether the insurance companies are actually following the regulations by performing procedure test audits.

Regulators believe that the grievance data, as distinct from complaints received directly by the Unit, will be of value in monitoring the implementation of patient protection legislation. The Consumer Advocate has begun examining these data, although as noted previously it is too early to say much about the quality of the data reported by plans. One example which the Consumer Advocate is examining is grievances relating to emergency services. Early analysis indicates that a high number of such grievances are being reversed, suggesting that the plans may not be properly applying the prudent person standards. However it will also be necessary to examine trends in grievance management, with only 1998 calendar year data currently available.

Future plans - The Division is considering publishing the grievance data in a comparative report. It has not been decided at this stage whether grievance data should be included in the existing Consumer Guide to Oregon Insurance Complaints or whether it should be combined with other data such as NCQA indicators, given that it does include information on quality of care issues.