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Report to the Vice President of the United States

Publication Date
Oct 31, 1998


Progress Report in Implementing the Patient's Bill of Rights at the
Department of Health & Human Services
November 2, 1998
Status of Implementation of the Consumer Bill of Rights and Responsibilities in the Department of Health and Human Services

I. Introduction

In February 1998, the President directed the Department of Health and Human Services, along with the Departments of Labor, Defense and Veterans' Affairs and the Office of Personnel Management, to use their regulatory and administrative authority to bring their health programs into compliance with the Consumer Bill of Rights and Responsibilities, as proposed by the President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry. Our agencies were also asked to identify those aspects of the Bill of Rights for which our existing authority was insufficient for full compliance.

The Department of Health and Human Services (HHS) was explicitly assigned to bring Medicare and Medicaid into compliance with the Bill of Rights within the limits of existing legislative authority. Medicare, a federally-funded insurance program for the elderly and disabled, covers approximately 38 million individuals, of whom approximately 6.5 million, or 17 percent, are currently enrolled in managed care. Medicaid, a State and federal insurance program for low income children, pregnant women and others, covers approximately 40 million people, of whom almost half are in a managed care arrangement for some or all of their health care at some point during a year.

The Department has moved aggressively to strengthen existing consumer protections under Medicare and Medicaid. On June 26, 1998, the Health Care Financing Administration (HCFA(now known as CMS)) published an Interim Final rule establishing new requirements for managed care arrangements participating in Medicare. On September 29, 1998, HCFA(now known as CMS) published a Notice of Proposed Rulemaking (NPRM) strengthening protections for Medicaid beneficiaries enrolled in managed care arrangements. Consistent with the President's directive, these rules, when finalized, will enable HHS to implement these new protections by no later than December 31, 1999 for Medicare. States will be required to implement all new protections within one year from the effective date of the final regulation for Medicaid, which is expected to be issued by mid-1999.

When these regulations are fully implemented, Medicare and Medicaid will be in substantial compliance with the Bill of Rights' provisions. Specifically, the Department has been able to come into compliance for managed care enrollees with critical patient protections such as information disclosure, access to emergency services, patient participation in treatment decisions, and complaints and appeals. These regulations also expand each patients' ability to choose their health care providers and to have ready access to specialists. However, both Medicare and Medicaid currently lack the authority to require plans to pay for transitional care from a particular provider for seriously ill (or pregnant) individuals in a course of treatment when their specialist is dropped from a plan or when their plan leaves the program for reasons other than cause. Current legislative authority also does not permit full implementation of the right to medical record confidentiality. The Department has, however, separately submitted a report to the Congress laying out the parameters for federal legislation to protect the confidentiality of health records. In addition, while Medicare and Medicaid managed care enrollees are currently protected to the full extent of the Consumer Bill of Rights with regard to respect and non-discrimination, the rules that prohibit discrimination under fee-for-service address some, but not all, categories of protection and providers included in the right.

The proposed regulations give the Department a variety of monitoring and enforcement tools including suspension of payments, civil money penalties, and termination from the Medicare and Medicaid programs. The Department will take all necessary actions to enforce the protections included in the Medicare and Medicaid regulations.

II. Specific Rights

A. Information Disclosure

"Consumers have the right to receive accurate, easily understood information and some require assistance in making informed health care decisions about their health plans, professionals, and facilities."

Under the Interim Final Rule and the NPRM, Medicare and Medicaid are in substantial compliance with this right. Under the proposed regulations, Medicare and Medicaid will require plans to provide critical information to consumers, both annually and upon request, that will enable them to make more informed choices about their health plans. The Department is moving aggressively to collect and disseminate comparative information about the quality of care provided to consumers and about the level of satisfaction among consumers with the care that they receive. Medicare plans will be required and Medicaid plans and States will be encouraged to use the Consumer Assessment of Health Plans Survey (CAHPS) to survey enrollee satisfaction and experiences with care. The CAHPS instrument was developed under the aegis of the Agency for Health Care Policy and Research and is now in use in a number of public and private settings.

B. Choice of Providers and Plans

"Consumers have the right to a choice of health care providers that is sufficient to ensure access to appropriate high-quality health care."

The Interim Final rule for Medicare and the proposed Medicaid managed care regulations assure the protections outlined in the Bill of Rights with regard to provider network adequacy, access to qualified specialists for women's health services and access to specialists for consumers with complex or serious medical conditions. Medicare and Medicaid beneficiaries who obtain their care on a fee-for-service basis can choose any provider who agrees to participate in these programs.

  • Provider Network Adequacy: The standards for Medicare and Medicaid plans in the interim final and proposed managed care regulations will require health plans to provide access to sufficient numbers and types of providers to assure that all covered services will be accessible without unreasonable delay-including access to emergency services 24 hours a day and seven days a week. If a plan has an insufficient number or type of provider to provide a covered benefit, the plan will insure that the beneficiary obtain the benefit outside the network, at no greater cost than if the benefit were obtained from participating providers.
  • Access to Qualified Specialists for Women's Health Services: The standards for Medicare and Medicaid plans in the interim final and proposed managed care regulations will allow women to see a qualified women's health specialist for the provision of routine and preventive health care services, consistent with the protections outlined in the patients' Bill of Rights.
  • Access to Specialists: The standards for Medicare and Medicaid plans in the interim final and proposed managed care regulations will permit beneficiaries with complex or serious medical conditions who require frequent specialty care to have direct access to qualified specialists within the plan for an adequate number of visits under an approved treatment plan.
  • Transitional Care: The Medicare and Medicaid programs currently do not have the legislative authority to require that plans continue to pay for a patient's care from a particular specialist when that specialist is dropped by the plan or the plan is no longer participating in the programs. The new regulations make clear however, that for individuals in the midst of a course of treatment, the dropping of the specialist does not affect the right of the enrollee to obtain needed speciality services from another provider in the plan's network or, if necessary, out of the plan's network. Medicare enrollees also currently retain the right to disenroll from their managed care plan and return to fee-for-service at any time.

C. Access to Emergency Services

"Consumers have the right to access emergency health services when and where the need arises. Health plans should provide payment when a consumer presents to an emergency department with acute symptoms of sufficient severity-including severe pain-that a "prudent layperson" could reasonably expect the absence of medical attention to result in placing that consumer's health in serious jeopardy, serious impairment to bodily functions, or serious dysfunction of any bodily organ or part."

The Interim Final rule for Medicare and the proposed regulations for Medicaid incorporate this protection in its entirety. In addition, the regulations articulate a standard for post-stabilization services that is applicable to both Medicare and Medicaid managed care enrollees. If such patients need additional services after their emergency condition has been stabilized, their health plans would have one hour after being contacted to either affirm the need for the services or to make other care arrangements, otherwise the emergency facility could proceed to provide the needed care. Under this policy, plans would be liable both for the post-stabilization services they authorize and for services that are provided in the absence of a timely response from the plan.

D. Participation in Treatment Decisions

"Consumers have the right and responsibility to fully participate in all decisions related to their health care. Consumers who are unable to fully participate in treatment decisions have the right to be represented by parents, guardians, family members, or other conservators."

The Interim Final rule for Medicare and the NPRM for Medicaid reflect existing and new policies that are consistent with this right:

  • Information about treatment options. Health plans will be required to provide patients with easily understood information and the opportunity to decide among all treatment options--including no treatment--consistent with the informed consent process. Discussions of treatment options must be provided in a culturally-competent manner, with sensitivity to the special communication needs of people with disabilities.
  • Advance Directives. Managed care organizations and providers are required to discuss the use of advance directives with patients and their families and to abide by the wishes as expressed in an advanced directive, except where State law permits a provider to conscientiously object. The provision of care may not be conditioned on the presence or absence of an advance directive.
  • Financial Disclosure. Since 1996, physicians have been required to disclose to Medicare and Medicaid any financial arrangements that expose them to substantial financial risk, since these may potentially affect care decisions. Under the Interim Final Medicare rule, upon request from a beneficiary, plans are required to disclose a summary description of the method of compensation used to pay its physicians.
  • No "Gag Rules." "Gag rules" have been prohibited in Medicare and Medicaid since 1996. That is, plans are prohibited from penalizing or otherwise restricting the ability of health care providers to communicate with and advise Medicare and Medicaid patients about medically-necessary treatment options.

E. Respect and Nondiscrimination

"Consumers have the right to considerate, respectful care for all members of the health care system at all times and under all circumstances."

"Consumer must not be discriminated against in the delivery of health care services consistent with the benefits covered in their policy or as required by law based on race, ethnicity, national origin, religion, sex, age, mental or physical disability, sexual orientation, genetic information, or source of payment."

"Consumers who are eligible for coverage. . . must not be discriminated against in marketing and enrollment practices based on race, ethnicity, national origin, religion, sex, age, mental or physical disability, sexual orientation, genetic information, or source of payment."

Under the Interim Final rule for Medicare and the proposed regulations for Medicaid, managed care enrollees are protected to the full extent of this right as articulated in the Bill of Rights, with regard to services, marketing and enrollment. This important protection insures that once an enrollee or potential enrollee in a managed care plan is identified as an eligible Medicare or Medicaid beneficiary, plans may not discriminate in any way against the individual.

Under fee-for-service, however, Medicare and Medicaid protections against discrimination are largely a function of federal anti-discrimination rules that apply to recipients of federal funds. These rules address some, but not all, categories of protection and providers included in the Bill of Rights. As a result, the fee-for-service aspects of Medicare and Medicaid are in only partial compliance with this right.

F. Confidentiality of Health Information

"Consumers have the right to communicate with health care providers in confidence and to have the confidentiality of their individually-identifiable health care information protected. Consumers also have the right to review and copy their own medical records and request amendments to their records."

The Interim Final regulations for Medicare and the proposed regulations for Medicaid require Medicare+Choice and Medicaid health plans to safeguard the privacy of any information that identifies a particular enrollee by ensuring that information from the plan (or copies of records) be released only to authorized individuals, that unauthorized individuals cannot gain access to or alter patient records, and that original medical records must be released only in accordance with federal or State law, court orders or subpoenas. Plans must ensure timely access to individuals who wish to examine their records. In Medicaid, plans are additionally required to establish procedures to address the confidentiality and privacy of minors, subject to applicable federal and State law.

While current federal laws (including the Privacy Act) and related regulations protect certain written records from disclosure outside of Medicare and Medicaid, it should be noted that such protections do not extend to all written records, nor to verbal communications between enrollees and providers. Protection of communication between patients and providers is a matter of State law, many of which do not afford the protections included in this right. Moreover, not all providers under Medicare and Medicaid are subject to federal laws on privacy; for example, protection of information obtained by physicians and individual providers is a matter of State, not federal law. The Department does not have the legislative authority to reach all information covered by the Commission's recommendation. Significantly, the Secretary's Privacy Recommendations to Congress (September 1997), if enacted, would bring all beneficiary information obtained by Medicare and Medicaid providers and plans, as well as the programs and their contractors, into compliance with this right as articulated in the Bill of Rights.

G. Complaints and Appeals

"Consumers have the right to a fair and efficient process for resolving differences with their health plans, health care providers, and the institutions that serve them, including a rigorous system of internal review and an independent system of external review."

The Interim Final rule for Medicare and the proposed regulations for Medicaid managed care require establishment of meaningful processes for resolution of complaints and appeals. Similar processes already exist for resolution of disputes arising in fee-for-service settings.

  • Internal Appeals: Both the Interim Final rule for Medicare and the NPRM for Medicaid define rigorous standards for the establishment of internal (plan-level) appeal processes, with explicit timeframes for both prior authorizations and resolution of appeals at the plan level. In general, standard prior authorizations and initial determinations must be resolved by the plan within 14 days, while reconsiderations or appeals must be completed within 30 days. Both the Medicare and Medicaid regulations establish a process for expedited review of prior authorizations and resolution of appeals by plans; that is, cases that appear to pose serious jeopardy to the patient must be resolved as quickly at the patient's condition requires, but no longer than 72 hours. Extensions for both the standard and expedited timeframes are possible but only under limited circumstances. Under the proposed Medicaid rules States may set even more stringent time frames.
  • External Appeals: The patients' Bill of Rights proposes that an appeal process include an independent system of external review, in order to ensure its fairness and accuracy. Medicare has long had this protection and will extend the plan-level timeframes and standards to its independent external review entity. Furthermore, in Medicare, when a plan-level decision on an appeal is in any way unfavorable to an enrollee, the plan must automatically refer the appeal to the independent external review entity for review. Automatic referral is a significant addition to the protection as described in the Consumer Bill of Rights. Individuals who are dissatisfied with the determination of the independent external review entity have the right to pursue their claim for Medicare benefits further through review by a Department Appeals Board and, ultimately, federal court. While Medicare beneficiaries do not have the right to sue the federal government for malpractice in relation to Medicare benefits, they may sue others for damage or injury incurred in the course of receiving, or not receiving those benefits, subject to the causes of action recognized by the State in which they reside.
  • The appeals process for Medicaid, as articulated in the NPRM, differs from this right in two significant ways. The Consumer Bill of Rights calls for the establishment of a sequential process of internal (plan-level) and external review. Under the proposed rule, however, States would be permitted to design their appeals systems so that individuals would appeal either sequentially or simultaneously to the State's Fair Hearing process, which otherwise serves as the independent external review entity. Second, the State Fair Hearing process, which serves a docket of programs and issues much broader than Medicaid managed care, currently has timeframes that are not consistent with the timeframes established by the NPRM for internal review by Medicaid managed care plans; in addition, there is no provision for expedited review. The NPRM seeks comment on the applicability of the Fair Hearing process to the review of managed care appeals.
  • Medicaid beneficiaries may not sue the federal government for Medicaid benefits. However, State laws determine the causes of action and remedies available to Medicaid beneficiaries both for matters determined by the State Fair hearing process and those related to damage or injury.

III. Numbers of People in Health Plans Who Would be Affected

As noted above, Medicare covers an estimated 38 million individuals, of whom approximately 6.5 million, or 17 percent are currently enrolled in managed care arrangements. Medicaid covers an estimated 40 million people, of whom about half are in a managed care arrangement for some or all of their health care at some point during a year. However, the spirit of consumer protection is relevant to all Medicare and Medicaid beneficiaries, regardless of whether they obtain their care in a fee-for-service setting or under some kind of managed care arrangement. While many of the protections articulated in the Consumer Bill of Rights are most relevant to individuals in a managed care setting, such as those related to choice of providers and plans and access to emergency services, other protections, such as grievance and appeals, and participation of treatment decisions, apply to both kinds of plans.

IV. Implications of These New Protections

There will be no implementation costs to the federal government for Medicare, and we expect that plans participating in Medicare will incur only minimal costs. We expect minimal costs to States and plans for implementation of the Consumer Bill of Rights provisions in Medicaid. As noted above, however, we have not yet fully implemented the regulations, so we cannot yet report fully on their effects.

We are in the midst of developing instructions and guidance to Medicare plans, and will continue to receive comments on the Medicaid NPRM through November 30, 1998. In developing our policies, we have consulted with advocates, plans, States, providers and others. We will consider their comments and suggestions as we work to finalize the regulations and related guidance.

V. Conclusion

With the recent regulations, Medicare and Medicaid are well on the way to meeting both the letter and the spirit of the Consumer Bill of Rights and Responsibilities and the President's directive. We are acutely aware, however, that establishing policies is not the same as making them real, and we look forward to working with States, plans, advocates and others to ensure that the rights established by the regulations are enjoyed by all Medicare and Medicaid beneficiaries. We believe that the protections of the Consumer Bill of Rights, consistently applied and enforced, will benefit not just Medicare and Medicaid beneficiaries but health care providers and plans as well.

The Consumer Bill of Rights has implications beyond the Medicare and Medicaid programs. We are working in my Department to extend and strengthen the consumer protections available to the beneficiaries of other HHS programs. In addition, the Quality Interagency Coordinating (QuIC) Task Force, which I co-lead with Secretary Herman of the Department of Labor, has met several times since the President called for its creation in February 1998. The QuIC has several active workgroups, one of which will provide a venue for agencies to share best practices in the implementation of the Consumer Bill of Rights.