Consumer Protection in Private Health Insurance: The Role of Consumer Complaints. Vermont

Vermont is unusual among the states studied in that health insurance complaints are the responsibility of a health division, the Division of Health Care Administration, rather than an insurance regulatory agency. However the Division of Health Care Administration is a sister division to the Insurance Division in the Department of Banking, Insurance, Securities and Health Care Administration, with the Insurance Division still having a role in regulating health insurance products. In addition, Vermont is the first state to introduce an independent ombudsman to assist consumers in navigating the health system, including handling consumer inquiries and complaints.

Department of Banking, Insurance, Securities and Health Care Administration

In the early 1990s regulation of health insurance was split between the Health Care Authority, an independent agency which had responsibility for quality oversight of HMOs, and the Department of Banking, Insurance and Securities which handled the general regulatory framework including financial solvency, other non-quality oversight and enforcement of violations including those relating to HMO quality.

In 1996 these two agencies merged to form the Department of Banking, Insurance, Securities and Health Care Administration (BISHCA) on the basis that it made little sense to regulate HMOs separately as insurers and health care deliverers. The 1996 legislation (Act 180) creating BISHCA also strengthened regulatory responsibility and changed the focus from solely HMOs to managed care organizations more broadly.

All health insurance inquiries and complaints are now handled by the Division of Health Care Administration (DHCA), with staff initially moving across from the Insurance Division consumer services section when the new Department was created. The DHCA handles questions related to the quality of health care services received through HMOs, managed care plans and other health insurance plans licensed by the state. Under its quality assurance program, the DHCA reviews the performance of all HMOs and managed care plans licensed to operate in Vermont for quality of care and compliance with professional standards.

In terms of other regulatory functions related to complaints, the DHCA oversees quality of managed care plans while the Insurance Division reviews indemnity insurance through market conduct examinations, with enforcement activities coordinated by the Department as a whole.

In addition to the Ombudsman program discussed below, the DHCA may liaise with agencies including:

• the Office of Vermont Health Access which is responsible for handling complaints from people under Vermont's Medicaid Section 1115 waiver program. Consumers insured through this program have the right to an appeal before the Human Services Board. (Note: There are no commercial Medicaid plans remaining in Vermont - Kaiser Permanente no longer had any Medicaid members as of 1 January 2000 and Blue Cross Blue Shield no longer had any Medicaid members as of 1 May 2000.)
• the Attorney-General's Department can theoretically get involved in health insurance complaints involving fraud, although regulators suggested that this had not been an issue in Vermont.

The Vermont legislation introducing independent external review took effect as of 1 July 1999, but Medicaid and Medicare beneficiaries cannot appeal decisions through the external review process.

Ombudsman

The Office of the Health Care Ombudsman was established by the legislature in 1997 under Act 159 to help consumers with questions and concerns about health insurance. (Act 159 simultaneously created the external review program).

The contract to provide the Ombudsman Office was awarded to Vermont Legal Aid, a non-profit organization, with the Office going live in January 1999, following a set-up period from September 1998. Act 159 required that the contract be awarded to a non-profit organization. The independence of the Ombudsman Office is guaranteed under the authorizing legislation which states that the Ombudsman "shall be able to speak on behalf of consumers…without being subject to any retaliatory action". In order to act as an advocate, the Ombudsman program cannot be performed by any group with a conflict of interest (e.g. any involvement with health insurance plans or providers).

Duties of the Ombudsman include:

• advocacy on behalf of consumers;
• assisting consumers with health plan selection;
• facilitating public comment on regulations and laws;
• educating consumers about the health system and their protections;
• promoting development of citizen and consumer participation;
• ensuring consumers have timely access to ombudsman services; and
• reporting annually to the legislature on their activities.

The Ombudsman program is open to all Vermonters, regardless of health insurance status (e.g. private health insurance, self-funded employer plans, Medicaid, Medicare, uninsured) or income.

There is a close relationship between the complaints staff in the Ombudsman Office and the Division of Health Care Administration in BISHCA. While there are no formal protocols as to how complaints are managed across the two agencies, the staff are in frequent contact. The Ombudsman Office deals with many general inquiries and complaints about health services, including access, quality and billing issues. Compared with BISHCA, the Ombudsman Office will tend to handle calls including:

• Complaints which are "cut and dry" advocacy issues;
• Where there is likely to be a violation of the law, the Ombudsman Office may assist consumers in completing the DHCA Complaint Form; and
• Assistance to consumers in filing external appeals, help with internal appeals and fair hearings processes, all of which may include gathering medical evidence.

In turn, the DHCA handles complaints where there is a violation of the insurance law in order for a formal complaint to be filed. The Ombudsman program and the DHCA do not generally work jointly on individual complaints, although this may occur if there are multiple issues involved in the one complaint (e.g. an advocacy issue and a potential violation of Rule 10, the managed care regulation). DHCA regulators noted that, despite the existence of the Ombudsman program, it was important for their agency to maintain a complaints function as this is "our pulse on the market".

Both offices are cognizant of maintaining consumer confidentiality and will not discuss individual consumer complaints across the two offices unless the consumer has consented. The DHCA complaints form (Attachment 1) contains an authorization for consumers to consent to the information being shared with nominated people, including the Ombudsman. A similar release form is used by the Ombudsman Office. While maintaining confidentiality of consumers, the two offices also share aggregate information for reporting purposes to track patterns of complaints. However the database maintained by the Ombudsman program is not accessible to the DHCA to protect consumer confidentiality.

Apart from the DHCA, the Office of the Health Care Ombudsman would have most frequent contact with:

1. the Office of Vermont Health Access - this agency administers the Medicaid program in Vermont, including undertaking eligibility for the health care program for people with no other public benefits;
2. the Department of Aging and Disabilities - this agency handles medical eligibility for the Medicaid waiver program; and
3. the Department of Social Welfare - this agency determines eligibility for health care programs for people with other public benefits and also administers other public benefits such as food stamps.

It is of interest that even in a small population state such as Vermont, the multiplicity of state agencies involved in administering various health and social programs is such that the Ombudsman Office can play an important role in helping people navigate the system.

The Ombudsman Office does not have much contact with HCFA(now known as CMS) in helping individual Medicare consumers. It is often difficult to locate the right person and get definitive answers from HCFA(now known as CMS) staff. Contact with HCFA(now known as CMS) includes providing input into regulations and other systemic issues.

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 1^st review/2^nd 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.

Ombudsman

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.

Neither the DHCA nor the Ombudsman Office publish complaints "report cards", comparing the complaints performance of individual plans.

DHCA

The DHCA has recently published the report "Vermont Managed Health Plans: A Guide for Consumers 1999" (Attachment 3). This health quality report card covers the performance of the four managed care plans against five categories of indicators: getting care, customer service; claims handling; women's health care; and care for children, with the first three categories collected through a CAPHS survey and the last two categories collected from plan records according to HEDIS. The guide is very consumer friendly and uses colored circles to classify plans as providing average, higher than average or lower than average care.

However unlike four of the six states studied in this report, Vermont does not currently report complaints data publicly. The guide does explain that all managed care plans are required to have an appeal process that allows consumers to complain about decisions and it includes the toll free number of the Consumer Services Section of the Division of Health Care Administration. It also refers to the Office of the Health Care Ombudsman and notes that the Ombudsman is a non-profit organization established to help Vermonters with questions and concerns about all kinds of health insurance.

In 1998 the DHCA received 4501 phone inquiries and processed 290 formal complaints. Regulators noted that the breakdown of inquiries matches the split of indemnity (80%) and managed care (20%) in the Vermont health insurance market. In 1997/98 of the 290 formal complaints, 67 (23%) were about managed care and 223 about non-managed care (77%). In 1999 the most common complaints have been about mental health parity, consumer rights and chiropractic care.

Attachment 4 is the Telephone Call Intake Form used by the DHCA Consumer Services Specialist in handling calls (both inquiries and complaints) to the Hotline. The issues categories used by the DHCA are quite comprehensive and would provide a sound basis for monitoring the implementation of managed care patient protections. In particular, the access issue categories cover problems such as clinical denial of care, specialty care, and emergency care.

The DHCA enters the information captured on the telephone call intake form into a new database, the purpose of which is to track calls, keep record of which is being mailed out for publications, provide information for reports to the legislature, and track trends.

Unlike some other states, the DHCA does not distinguish between all complaints and justified complaints. Regulators commented that DHCA's role was as a mediator and facilitator, helping both sides work through the process, not to sit in judgement as to the validity of the call.

If a consumer rings the DHCA requesting company-specific complaints information, the Consumer Services Specialist can retrieve this information from the database and advise of the number of complaints in the last year. The database does not automatically generate complaint indices for individual plans or industry averages. However, in conversation with consumers, the Consumer Services Specialist will attempt to put the complaints history of a plan in perspective, by advising them about the size of the plan as measured by covered lives.

Complaints received by the DHCA are reported into the NAIC CDS.

The DHCA does not provide regular reports to other parts of BISHCA, but will informally send information as needed. Regulators commented that complaints management and tracking is the primary function.

Ombudsman

In 1999 the Ombudsman Office received 1,775 phone calls. Attachment 5 is the data collection form used by the Office, which is broadly similar to that used by the DHCA. Again, the issues classification has the potential to identify the impact of various managed care legislation protections.

Currently access to dental services and prescription medicines are among the most common advocacy complaints. The Vermont legislature is considering a bill to regulate the cost of prescription drugs. The Office receives relatively few calls regarding access to primary care physicians. While Rule 10 contains access standards, a consumer may ring the Office because he/she is experiencing difficulty accessing a primary care physician. In this situation the Ombudsman Office may take immediate action to help the consumer find a physician and then also refer on the broader issue about the network adequacy of individual plans to the DHCA. There are similar issues involving continuity of care where the Ombudsman Office helps resolve the immediate problem and then contacts the DHCA about the systemic issue.

Consumers do not tend to ring the Ombudsman Office asking for the complaints history of individual plans. Consumers do call seeking advice as to the "best plan". The Ombudsman Office mainly helps them by identifying their needs (e.g. prescription drug coverage) and working through with them available information on plans (e.g. using DHCA information on managed care plans, premiums and benefit packages).

The Ombudsman Office accepts calls from both consumers and providers. Providers may call about particular patient issues or systemic issues (e.g. the level of Medicaid reimbursement, or delays in payment by insurance plans). While the Ombudsman Office encourages providers to use provider organizations, it may use the systemic problems identified in advocacy efforts.

In terms of feedback to consumers on complaints, the Ombudsman Office provides essentially all the information they uncover back to the consumer, including the process they undertook and what they found.

The Ombudsman tries to balance two roles - helping individual consumers and systemic advocacy issues. The Ombudsman has regular meetings with the Office of Vermont Health Access and the DHCA raising systemic advocacy issues. The Ombudsman also participates in the Vermont Health Access Oversight Committee (the Medicaid waiver committee), which is a legislative committee, and a very good vehicle for systemic advocacy.

In addition to an annual report to the legislature, the Ombudsman program makes quarterly reports to the DHCA and the Vermont Office of Health Care Access including the total number of calls, the types of calls and a narrative which highlights the policy issues involved.

Publications

In addition to the toll-free line, the DHCA publishes a range of reports relevant to health insurance including:

1. Consumer Bill of Rights for Vermonters covered by Managed Care Plans - this brochure explains in lay terms the protections offered to Vermonters including rights to information, appropriate treatment, and to ask questions or file complaints.
2. Vermont Managed Health Care Plans A Guide for Consumers 1999 - this reports uses CAPHS and HEDIS data to compare the performance of the four managed care plans in Vermont.
3. A Consumers' Guide to Health Insurance - This is a simple explanatory guide which also includes 2 pages explaining complaints, internal and external review and the Ombudsman.
4. Lists of licensed carriers - The Department publishes lists of carriers licensed to sell insurance in the individual, small group and Medicare supplement markets, together with details of premiums for each of the companies.

The Ombudsman Office prepared a brochure explaining the operation of the program which was mailed to 250 social service agencies and groups, together with all medical providers in the state, in the first year of operation. More recently, a poster was produced and sent to all state agencies and medical providers. The other new initiative which the Ombudsman would like to get started in the next few months is a newsletter.

Demand for Publications

In 1998 the DHCA distributed about 12,000 copies of the information sheets on Vermont's Patients' Bill of Rights, including to individuals, libraries, community groups, conferences and annual meetings.

Outreach and Media

The DHCA Consumer Services Specialist meets with various groups to explain their rights and educate them as to the complaints and external review process.

The Ombudsman Office has received television coverage through local news stations. The Ombudsman also tries to participate in health fairs and conferences, speaking to consumer groups, advocacy and support groups. The Ombudsman considers a web site a very good idea, but has not yet had time to focus on getting a site developed.

Staffing

In the DHCA there is one Consumer Services Specialist with responsibility for the Hotline, although consultation may occur with other staff as required for guidance, including legal staff.

The Ombudsman Office has a total of 4 and 1/2 staff, together with the Ombudsman. These staff cover all issues, including providing the Medicaid Ombudsman services.

Financial Savings to Consumers

In the DHCA complaints resolution resulted in $137,675.08 being collected from insurance plans in 1997/98.

The Ombudsman Office does not collect data on financial savings to consumers.

External Audit

It is believed that the DHCA is subject to audit by the State Auditor, including its management of the contract with the Ombudsman Office. However the Ombudsman Office is not audited directly by the State Auditor.

Consumer Satisfaction Surveys

The DHCA does not send out consumer satisfaction surveys to its Hotline callers.

The Ombudsman Office undertakes regular consumer satisfaction surveys (Attachment 6) which commenced in Fall 1999. They send a survey out for every closed complaint, providing a stamped self-addressed envelope in order to ensure confidentiality and to make it easier for consumers to respond. When they started in Fall 1999, they sent surveys to all the consumers who had used the program until that time, and did not get such a good response rate because of the time lag. Now, however, surveys are sent out regularly and it is likely that the response rate has improved. The Ombudsman receives quarterly reports including the tally of returned surveys and aggregate consumer satisfaction data. In addition, the Ombudsman personally reviews any surveys immediately where the consumer has expressed dissatisfaction with the service they received from the Office.