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


The Division of Health Care Administration, BISHCA

When the DHCA receives a complaint about ERISA plans, it sends out a letter as though they are able to be regulated. Generally, these entities respond in a similar manner to regulated plans, with no-one ever refusing to respond because of the lack of regulatory authority by the DHCA for these plans. Regulators suggested that the Vermont sense of community and desire to be good citizens contributes to the willingness of employers to handle complaints about ERISA plans.

Rule 10, the rule covering managed care patient protections, applies to managed care organizations. However there are also PPOs and physician-hospital organizations that do utilization review that fall outside the DHCA's direct jurisdiction. One of the health insurance plans regulated under the DHCA works with five physician-hospital organizations in Vermont, so that the DHCA indirectly influences these groups through its regulation of the plan.

With effect from September 1997, health insurance plans are required to submit grievance data (i.e. internal complaints received directly by the plan) to the DHCA biennially (January 15 and July 15). Attachment 2 comprises the grievance reporting framework specified by the DHCA. In summary, health plans are required to report:

  1. The number of grievances for each of 5 broad grievance types, the rate per 1,000 members and the outcome (number and rate of grievances overturned/unresolved after 1st review/2nd review);
  2. The timeframe (average, minimum and maximum number of days) taken to reach a decision in the grievance resolution process; and
  3. The number of days to gather information necessary to make a decision.

While the reporting framework is quite detailed, the actual grievance categories used are less specific and relevant to understanding the implementation of patient protections than some of the other states studied. The grievance types captured in the reporting framework are:

  1. Physical health service denials/coverage issues requiring expedited review;
  2. Physical health service denials/coverage issues not requiring expedited review;
  3. Behavioral health service denials/coverage issues requiring expedited review;
  4. Behavioral health service denials/coverage issues not requiring expedited review;
  5. Grievances related to quality of care delivery including:
  6. Attitude concerns;
  7. The provider's office;
  8. Access to health care;
  9. About overall coverage and services not covered;
  10. Provider's competency; and
  11. Grievances related to MCO-administration.

The DHCA evaluates the quality of the data with each filing, working in conjunction with a contractor. Regulators suggested that because Vermont specifies the format, there should be reasonable consistency in what plans submit. It was noted, however, that some plans count grievances differently, e.g. some only count written grievances, while others will also count oral complaints. In addition, sometimes plans challenge whether certain member complaints should be counted in the biennial grievance reports. For example, Vermont has recently mandated that plans cover chiropractic services. Some consumers will complain to their plan that they do not think they should have to go through their primary care physician, which is part of the mandate. In response, plans will suggest to the DHCA that they do not consider that this type of call is really a grievance as there is nothing they can do and they are operating within the law.

Regulators noted that the level of grievances about a plan will vary according to how well the plan publicizes the ability to file a grievance and the extent to which it is part of a plan's quality improvement activities.

Under Rule 10 (Section 10.203D) plans must keep written records and retain grievance data for at least three years. The rule also stipulates that there should be triennial reviews which include looking at the complaints and grievances process to make sure that they are timely and complete.

Health plans are required under the external appeals regulation to notify their members about the external appeal process and the availability of the DHCA toll-free phone number and the Ombudsman Office, when they issue a denial.


Most plans are very good at publicizing the Ombudsman Office, with one example being Blue Cross which has featured the Ombudsman Office in its members' newsletter. The Ombudsman intends to work with plans to continue to improve their public education efforts about the Office.

The Ombudsman tends to meet or contact plans on an individual basis as issues arise, but does not hold regular meetings with insurance plan personnel.