Consumer Protection in Private Health Insurance: The Role of Consumer Complaints. A. Jurisdiction and Responsibility for Consumer Complaints Systems


In Maryland two agencies - the Maryland Insurance Administration and the Health Education and Advocacy Unit in the Office of the Attorney General - have the major role in managing health insurance complaints, while the Health Care Access and Cost Commission produces comparative report card information on HMOs.

The Maryland Insurance Administration (MIA) is theoretically the first point of entry for all consumer complaints on health insurance. Regulators noted that the MIA is essentially the "pulse" of the industry. It is a regulatory body whose function is to check whether insurance plans are in compliance with statutes, their contractual obligations and various rules including the setting of rates. The MIA does not represent either insurance plans or consumers. Maryland law also allows providers to file complaints.

As of 1 January 1999 the new "Appeals & Grievances" Law took effect in Maryland. Grievances are internal complaints filed by consumers directly with their health plan challenging a plan's adverse decision to deny services based on medical necessity. As such, grievances are a subset of the total complaints about health insurance. Section B provides further information on the protocols specifically for management of grievances across the MIA and the Health Education and Advocacy Unit (HEAU) in the Office of the Attorney General. The jurisdiction and management of health insurance complaints generally is described below.

Occasionally, the MIA and the HEAU may be involved in managing the same complaint. Sometimes this occurs because consumers make multiple calls to state agencies. In other cases, the MIA may refer on a complaint to the HEAU for issues that fall outside its regulatory reach, but also retain the complaint to deal with other issues under its purview. The HEAU provides quarterly complaints reports to the MIA using compatible fields, but the data presented is non-identifying.

Unlike the MIA's regulatory compliance approach to complaints management, the HEAU (established in 1987) views its role as "problem solving for consumers". As such, it often gets the difficult cases which fall outside the regulatory scope of other agencies. The HEAU examines legislation which may be relevant in achieving complaint resolution. However unlike MIA's enforcement activities which are dependent upon the law, the HEAU undertakes mediation which can be successful in complaint resolution, even in the absence of specific legislation. Being able to move beyond the legislation is one factor considered important by HEAU staff in helping to assist consumers. It allows the HEAU to focus on consumer problems (a front-of house approach) and then work creatively with insurance plans to seek satisfactory resolution.

The HEAU does not have regular formal meetings with other agencies involved in complaints management, but liaises informally through telephone contacts. Staff believe that the HEAU operates somewhat like an ombudsman program, with no obvious powers lacking due to the absence of formal legislation establishing an ombudsman program. Unlike the MIA which remains neutral, the HEAU has a strong consumer advocacy focus.

The Maryland Department of Health and Mental Hygiene (DHMH) has primary responsibility for HMO quality complaints, with such complaints referred on by the MIA. Similar to the interaction between the MIA and the HEAU, the MIA and the DHMH may jointly handle a complaint if there are both quality and other issues. The MIA and the DHMH have signed a Memorandum of Understanding setting out their agreed roles and responsibilities (Attachment 1).

Provider licensing boards which fall under the Department of Health and Mental Hygiene also handle complaints about specific provider groups. In the late 1980s the HEAU established Memorandums of Understanding (MOUs) with some of these Boards, governing the way in which they would jointly operate and manage complaints. The HEAU continues to operate under the referral procedures initially established in these MOUs.

Currently the provider boards deal largely with quality of care issues and generally refer charging complaints to the HEAU. The Boards have to be careful in handling any financial complaints as there may be antitrust issues due to their governance and organizational structures. The HEAU refers some complaints (e.g. alleged molestation) to the relevant provider boards. The Boards tend to limit their operations to complaints where they have regulatory authority.

Medicare and Medicaid Complaints

The HEAU takes on a "translator" role for people who call with complaints involving Medicare and Medicaid. Common complaints for Medicaid beneficiaries involve billing issues. In some cases, the HEAU will directly answer the question, including contacting the relevant agency (HCFA(now known as CMS) for Medicare and the Maryland Department of Health and Mental Hygiene for Medicaid) on behalf of the complainant. In other cases the HEAU attempts to ensure that the complainant only has one more call to make, by identifying for complainants the correct person with whom they should speak.

The MIA liaises with relevant agencies via meetings and telephone calls on Medicare and Medicaid complaints. One advantage of MIA involvement is that it can issue penalties.

ERISA Complaints

The MIA and the legislature are aware that large numbers of Maryland residents are insured through self-funded plans and outside their jurisdiction. The MIA also does not have jurisdiction over workers' compensation or welfare pension plans. In dealing with insurance plans exempt under ERISA, the MIA requires plans to complete an "underwriter certificate", attesting to their status, rather than simply rely on the verbal assurance of the plan that it is self-funded.

The HEAU will contact plans which are exempt under ERISA to help resolve consumer complaints. Most of these plans are willing to discuss issues with the HEAU, but sometimes take the opportunity to remind the HEAU that they are under no obligation to do so.