Consumer Protection in Private Health Insurance: The Role of Consumer Complaints. B. Jurisdiction and Liaison with Health Plans


Unlike some states where health departments have a role in the quality regulation of HMOs, the Oregon Insurance Division has full jurisdiction over both traditional indemnity health plans and HMOs. The Oregon legislation uses the term "Health Care Service Contractors" for a HMO or other type of health insurance plan that contracts with doctors, hospitals and other medical providers to offer services on a prepaid basis.

One issue is the rapidly changing delivery system in Oregon which makes it difficult to keep up with newly emerging forms. Insurance plans are using "delegated entities" which involve paying capitation to an intermediary administrator of plans. These entities vary with some plans delegating functions such as utilization review, claims administration, customer service and referral management services. The degree of delegation varies by contractual arrangement. The Insurance Division position on delegated entities is that the authority is clear. While delegated entities may act as agents of the insurers, the insurer is bound to do business as regulated by the Division and is ultimately responsible for the performance of any functions it delegates or contracts out. In addition, the Division is undertaking an audit of delegated functions during current market conduct examinations.

Health insurers are required under the Patient Protection Act 1997 (PPA) to disclose certain information, including publicizing the existence of the Insurance Division. Most commonly, this is included in Member Handbooks, but some companies are also putting the information in their explanation of benefit reports. The PPA also puts an obligation on plans that where grievances are upheld, the plans are required to advise their members of their right to seek assistance from the Insurance Division.

The Insurance Division also interacts with the industry through formal channels including the Insurance Advisory Committee which meets quarterly to discuss issues across all lines of insurance. In addition to representatives from the insurance industry, agents, business/labor and consumer representatives participate in this forum.