Consumer Protection in Private Health Insurance: The Role of Consumer Complaints. E. MIA Report on the Health Care Appeals & Grievance Law

06/01/2000

Features

Scope - The report includes data from both the MIA and the HEAU on total health insurance complaints and grievances, covering between the first six to twelve months of operation of the new Appeals and Grievances Law. Complaints data in the report include a hierarchy of complaints management as follows:

Internal grievance data - the legislation requires that health insurance plans report to the MIA data on internal grievances including the outcome of grievances, with breakdowns by plans and by type of service.

Complaints received by the HEAU - this includes total complaints about all health services (e.g. providers, health insurance) and grievances whereby consumers (or providers) contact the HEAU once they have received a denial of care from their health insurance plan based on medical necessity.

Complaints received by the MIA - again, this includes data on total complaints and also grievances filed by consumers and providers. The MIA provides a breakdown of the grievance data by plan, outcome of the grievance and type of service.

Grievance categories - The MIA specifies the reporting format for health insurance plans to report on grievances (see page 33-35 of the MIA Report at Attachment 2). Plans must disaggregate grievances by type of service as follows:

  • Inpatient hospital services;
  • Emergency room services;
  • Mental health services;
  • Physician services;
  • Laboratory, radiology services;
  • Pharmacy services;
  • PT, OT, ST services (including inpatient rehabilitation services);
  • Skilled nursing facility, sub acute facility, nursing home services;
  • Durable medical equipment services;
  • Podiatry, dental, optometry, chiropractic services;
  • Home health services

In addition, for each of the service types, plans are required to report the five most common procedures/services/items that were at issue, using CPT codes or ICD-9 codes. The MIA requires that plans report on the number of grievances involving a hospital length of stay/denial of hospital stay, again including reference to the CPT or ICD-9 codes. Finally, the MIA requires that plans report on several process measures including: the outcome (original decision upheld, overturned or modified) and the average time for resolution of emergency and non-emergency grievances.

Findings

Consumers received a favorable decision in 60% of internal grievances made directly to health insurance plans, but the likelihood of a favorable decision varied significantly by the type of service.

Figure 4.1 shows the total number of grievances handled directly by health insurance plans in the first six months of 1999. Four service types - inpatient hospital services, emergency room access, pharmacy services and physicians - accounted for about three-quarters (72%) of all grievances. Figure 4.2 indicates the share of grievances decided in favor of the consumer. While 60% of all grievances resulted in the plan's initial decision being overturned or modified in favor of the consumer, this increased to 85% for grievances involving pharmacy services and 76% for laboratory radiology services services. Grievances which were the least likely to be overturned or modified in favor of the consumer were mental health services (28%), and podiatry/dental/optometry/chiropractic (38%).

Figure 4.1: Number of Grievances Handled by Health Insurance Plans, Maryland, January-June 1999

Figure 4.1: Number of Grievances Handled by Health Insurance Plans, Maryland, January-June 1999

Figure 4.2: Outcome of Grievances Handled by Health Insurance Plans, Maryland, January-June 1999

Figure 4.2: Outcome of Grievances Handled by Health Insurance Plans, Maryland, January-June 1999

The majority of complaints received by the MIA do not relate to grievances based on denial of care linked to medical necessity.

In 1999 the MIA Life & Health Complaints Unit received a total of 10,775 complaints, while the MIA Appeals & Grievances Complaints Unit received a total of 1,063 complaints.

The new Appeals & Grievances Law has more than doubled the number of complaints received by the Health Education and Advocacy Unit.

From 1996 to 1998 the HEAU received an average of 845 complaints annually, projected to grow to 2052 in 1999 (based upon the first six months of 1999). Prior to 1999 complaints about health insurance including HMOs comprised only 25% of the HEAU's workload, but this increased to more than 70% in 1999. Of complaints received by the HEAU in the first six months of 1999:

  • about 30% concerned services other than health insurance and HMOs;
  • about 25% involved general health insurance and HMO complaints; and
  • about 45% involved medical necessity grievances for health insurance and HMOs.

Assessment of the Report

Consumer friendliness - The MIA report is a policy analysis of the impact of the new Appeals & Grievances Law, rather than a report specifically targeted at consumers. For the complaints and grievances data in this report to be presented in a consumer-friendly way, one necessary change would be to compare individual plans on the basis of their market share, with complaints or grievances ratios calculated on the volume of premiums or insurance policies. MIA regulators commented that one issue in deConsumer friendliness - The MIA report is a policy analysis of the impact of the new Appeals & Grievances Law, rather than a report specifically targeted at consumers. For the complaints and grievances data in this report to be presented in a consumer-friendly way, one necessary change would be to compare individual plans on the basis of their market share, with complaints or grievances ratios calculated on the volume of premiums or insurance policies. MIA regulators commented tha

Monitoring patient protection implementation - The MIA reporting framework required for grievance reporting by health insurance plans is quite detailed by service type which would be useful for policy analysts in tracking certain patient protections (e.g. emergency room access). However the grievance reporting framework does not adequately capture "issues", as distinct from service types, including continuity of care and network adequacy. Ideally, data collected through the MIA (both the Health & Monitoring patient protection implementation - The MIA reporting framework required for grievance reporting by health insurance plans is quite det