California last month released its first-ever report on consumer complaints about individual HMO health plans, joining several other states in reporting this data. But, while consumer groups both in California and elsewhere welcome the efforts, they often disagree with state officials over the way the information is collected and presented to the public. Peter Lee, director of the HMO Consumer Protection Project of the Los Angeles-based Center for Health Care Rights called California’s report "not a bad start," but criticized the state for not including hotline complaint calls.
Hotline compliants not included The California report, prepared by the Department of Corporations (DOC), includes written requests for assistance (RFA) filed with the DOC, but not complaints that come into the DOC’s new, toll-free hotline, which was launched last October specifically to field consumer complaints about HMOs. Only some phone calls result in written requests. DOC spokesman Damian Jones said a major reason the hotline calls are not included in the report is that less than 8% of the callers actually file complaints. The hotline "is not a replacement of, but only a supplement to, the grievance processes at those plans," he said, adding that the report shouldn’t be taken as the sole way to judge plans. But Mr. Lee argues that the call data is relevant even if it doesn’t lead to a written complaint because calls to the state hotline can indicate plans aren’t doing their job in customer service. Furthermore, the reason more phone calls don’t result in written requests for assistance may have nothing to do with the complaint and if it’s been resolved, but may have to do with the consumer not turning in the paperwork because it is too complex, etc.
Despite his concerns, Mr. Lee praised the new California report for the scope of data presented. For each plan, the report details the number of enrollees, the rate of complaints per 10,000 enrollees, and issue categories, including accessibility, benefits/coverage issues, claims issues and quality of care issues. Within those broad categories, the report breaks out 34 types of complaints in individual reports on plans.
Overall, the report said 51% of HMO complaints were about claims, ranging from insufficient or slow payment to refusal to pay. Another 29% were about quality of care, such as denial of experimental treatments or "inappropriate physician care." Twenty-one percent of complaints were about benefits/coverage issues such as assignment of benefits and disputes over covered services. Only 3% of complaints concerned accessibility issues, including lack of specialists and long waits for appointments.
HMOs see vindication
California’s leading managed care organization hailed the overall data, which showed a complaint rate of 0.43 per 10,000 HMO enrollees, as proof that HMOs are doing a good job. "Overall we feel the report reflects how well HMOs are doing," said Alan Tomiyama, spokesman for the California Association of HMOs. "There’s nothing to indicate the negative types of horror stories propagated by some of the interest groups out there."
But Blue Cross of California, which came out with the highest complaint rate in the report at 2.5 per 10,000 enrollees, argues that the way the data was presented was unfair because Blue Cross has a disproportionately large share of the individual and small group markets in the state. (Blue Cross has 30% of the individual market, for instance, compared with 18% for the larger Kaiser Foundation Health Plan.) "People who get health insurance through employers tend to be large group businesses," noted Blue Cross Vice President Pat Garner. "If they have a problem, they go to their benefits administrator who works through the (insurer). So folks who work for large companies are less likely to get in the DOC complaint mode." Despite Blue Cross’ showing, Mr. Garner said the DOC report is still valuable, adding that the insurer will work with the department to see if any changes can be made in reporting. Unlike reports in some other states, the California report does not compare the performance of HMOs with that of indemnity plans and other insurers, which are regulated by the Department of Insurance.
The DOI is currently prohibited by law from publishing complaint reports about fee-for-service plans.. Like the DOC, the Department of Insurance operates a toll-free complaint hotline. It received 40,000 calls last year, 80% of which were related to managed care and referred to the DOC
Fewer complaints about HMOs
In New York, where HMOs and other insurers are both regulated by the Department of Insurance, complaint rates run lower for HMOs, said Wayne Cotter, director of research for the New York Department of Insurance. In the department’s most recent report, covering 1994 complaint data, the median complaint ratio for HMOs was 0.3, compared with 0.4 for health insurers overall.
"HMOs tend to generate fewer complaints than a traditional indemnity company, because "they’re providing dollar one coverage," said Mr. Kotter.. "You don’t get all those traditional complaints of people not getting reimbursed enough. Even though there have been a lot of horror stories about HMOs, they tend to generate fewer complaints."
Because of problems in comparing different kinds of insurers, New York broke its report into categories for HMOs, non-profit companies and other commercial carriers to provide an "apples to apples" comparison, though the report also includes a section ranking all health insurers.
Other states reporting plan-specific HMO complaints include New York, New Jersey, Texas, Ohio, Missouri, Oregon and Wisconsin, but a number of states do not provide any written material to consumers, in some cases because they are prohibited by law from doing so. State regulators say the complaint reports play other roles aside from educating consumers.
Mr. Kotter, who has been preparing complaint reports since 1991, said their biggest value has been in motivating insurers to clean up any problems before they are reported. They have been of less value to the state since, in almost all cases, the state learns about any serious problems from the consumer services bureau before the report is put together, he said. The California DOC says the complaints "provide an extremely valuable window into the plan and its operation." Failure to pay claims, for example, could "indicate, in the worst case scenario, some kind of solvency problem, a problem in administrative capacity, or a problem with undue fiscal influence on medical decision-making," said Joe Parra, special assistant to the DOC commissioner.
New York complaint data don’t include quality of care concerns, which are reported to the Department of Health. Those complaints number only about 100 a year, Mr. Kotter said. The New York ratios are based on complaints per million dollars of premiums. New York uses premiums, rather than enrollees, in its calculations because premiums are audited and easier to track. Most other states Mr. Kotter has studied also use premiums.
Bias toward low-cost plans Mr. Kotter acknowledged that a ratio based on premiums creates a bias toward lower-cost plans. "What I’ve learned over the years ... is that there’s no perfect way to do it. You just try to do it the best way you can," he said. The National Association of Insurance Commissioners. is now drafting a model form for states to report information about health plans to consumers, including information about consumer complaints on individual plans financial data and, but it will not compare plans. State-run insurance hotlines, which field some 400,000 complaints a year on all types of insurance recently have come i under criticism. from the Center for Insurance Research, a Cambridge, Mass. group. The group conducted a telephone survey of the hotlines around the country and reported that hot line personnel were often misinformed and that less than a third responded in a manner that the center considered to be "reasonably helpful."
Contact Mr. Lee 213-383-4519; Mr. Jones at 213-736-2507; Mr. Tomiyama at 916-552-2910; Mr. Garner at 818-703-2345; and Mr. Kotter at 212-602-0472.
This article was written for SHW by Contributing Editor Jack Neff.
Calif. latest state to report HMO complaint data
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