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


New Regulatory Authority for "Downstream Risk"

TDI staff noted that there is a nationwide movement towards different forms of managed care, with examples of downstream risk such as Independent Practitioner Associations (IPAs) which are beyond the purview of TDI. In response to the changing marketplace, SB890 in the 1999 legislative session gave TDI some additional oversight over the contracting between the plan and delegated entities, but still not complete regulatory jurisdiction. However some TDI staff expressed the view that complaints about delegated entities would comprise a very small share of all TDI consumer complaints, but a growing share of provider complaints. TDI staff further suggested that consumers with such complaints would generally deal directly with their employer health benefits management staff, rather than approach TDI.

TDI Investigation of Complaints

When TDI receives a complaint, it forwards it to the relevant health insurance plan or HMO. Under Texas legislation plans are required to respond to TDI's investigation of a complaint within 10 days. HMOs are required by statute to advise members of the TDI complaints function via members' booklets and on any denial letters (e.g. benefit coverage, medical necessity).

Management of Grievances

Unlike some states such as Oregon, TDI does not require HMOs to file with TDI reports on "grievances" - that is, complaints made directly by members to the plan (Note: TDI does not use the term grievances, referring to these simply as complaints). TDI regulators expressed skepticism about the value of collating grievance data centrally, related both to the need for proper validation and the substantial work involved.

However TDI is involved in extensive scrutiny of plans' management of grievances through quality of care examinations. These exams are conducted by the Life, Health & Licensing Program, separate from those conducted by the market conduct section. They occur at least every three years for all HMOs, with the potential for additional focused quality of care exams arising from complaints or other information. The quality assurance audit tools used by TDI in quality of care examinations are available on its web site, while the specific tools used to monitor plans' grievances management are attached (Attachment 1). These tools include the specific citations in the Texas Insurance Code, imposing various obligations for grievance management by plans.

In summary, the key obligations on HMOs in regard to grievances or internal complaints include:

  • Plans are required to respond within 5 business days of receipt of an oral or written complaint outlining the complaint procedures and timeframes;
  • Plans are required to acknowledge, investigate and resolve complaint within 30 days after written complaint or one page complaint form received;
  • Plans are required to maintain a complaint and appeal log for each complaint to be available at the time of quality of care examinations; and
  • Complaint logs held by plans must categorize complaints into plan administration, benefit denial or limitation, quality of the treating provider and enrollee service categories.

In quality of care examinations, TDI will examine both the policy and procedures associated with complaints handling by plans and the actual grievances or internal complaints data held by plans.