Federal Requirements for Managed Care Plans and States
The federal Medicaid statutes and regulations mandate two separate complaint processes: an in-plan grievance process and a fair hearing process. More detailed federal regulations regarding in-plan grievance processes and state monitoring requirements are expected in 2000 under the Balanced Budget Act of 1997.
a. In-plan grievance process-Current federal regulations regarding the in-plan grievance processes are generally rather vague. State contracts with health care plans must include requirements for a written grievance process that is "approved by the state," provides "prompt" resolution of the grievance, and ensures that someone with decision-making authority is involved in the process. Some states set definite timelines for grievance decisions through state laws, regulations, or contracts, and some require that plans expedite grievance decisions for emergencies. Federal regulations require states to monitor the plans' grievance processes.
b. Fair hearing process-The federal regulations are much more detailed on the requirements for the fair hearing process. Beneficiaries have the right to:
1. Notice before their benefits are reduced, denied, or terminated;
2. Continued benefits, pending a hearing decision;
3. Contest managed care decisions, review evidence, present witnesses, and be heard before an impartial decision-maker; and
4. A decision within 90 days of the date that the request for a fair hearing was filed. 7 Courts have held that in managed care settings, the 90-day clock to a hearing decision is triggered either by a member's request to the state for a fair hearing or by his/her request to the plan for resolution of the complaint.
c. Data requirements-Under the Balanced Budget Act of 1997, states that contract with Medicaid managed care organizations must develop and implement a "quality assessment and improvement strategy." This strategy must include examination of grievance procedures. Federal guidelines suggest that states set a standard for managed care organizations' resolution of enrollee issues. A managed care organization meeting the standard "maintains, aggregates and analyzes information on the nature of issues raised by enrollees and on their resolution" and uses this information to "improve the issue resolution process itself" and "address other system issues raised."
Currently, the federal Health Care Financing Administration (HCFA) encourages states and managed care organizations to use information from grievances to improve quality, but federal law and regulations do not require states to aggregate grievance and complaint data. HCFA also encourages states to examine plans' grievance processes as part of the required annual independent external quality review. Sometimes, under terms and conditions of Section 1115 and Section 1915(b) waivers, HCFA requires states to submit aggregated complaint and grievance data. This data assists HCFA in monitoring the waivers.
Data Sources and Potential Problems
Medicaid beneficiaries can pursue complaints about health plans and managed care through a number of channels. Each of the channels has some data available. The challenge for an advocate is to reconcile the various sources and to spot meaningful patterns.
a. Enrollment counselors-Some states contract with enrollment brokers, while other states use agency staff to enroll Medicaid beneficiaries in managed care plans. Enrollment counselors may keep data about enrollment-related complaints.
b. Plan member services departments-Beneficiaries can call their provider or the member services department of their plan to complain informally. Check your state's policies and the plan's grievance procedure and policies to see whether plans are required to log all calls. It is hard to vouch for the accuracy of phone logs, since they are usually not audited and may not be complete.
c. Complaints and formal grievances filed with the plan-Beneficiaries may file a formal grievance with their managed care plan, asking for a review of the problem by officials in the plan who are empowered to reverse an initial care decision. You may be able to obtain from plans copies of their grievance procedures and internal grievance logs or a summary of grievance statistics. Plans may also keep statistics on informal complaints, such as calls to member services registering concerns even when the member does not elect to file a formal grievance. Check your state's Medicaid managed care contract for plan requirements to keep and report this data. In New York, Medicaid managed care plans must report complaints and grievances in categories such as appointment availability, waiting time too long at doctor's offices, dissatisfaction with quality of medical care, difficulty obtaining referrals for covered services, access to non-covered services, dissatisfaction with non-medical provider services, problems obtaining after-hours care, dissatisfaction with authorized mental health plan, dissatisfaction with authorized substance abuse services plan, communications barrier, and problem with marketing and/or consumer outreach. States often ask plans to report the number of complaints or grievances resolved and outstanding. In many states, data on grievances must be submitted to the plan's internal quality assurance committee.
Advocates caution that the volume of reported complaints may not be the most helpful way of identifying systemic problems. Problems that affect many beneficiaries may not be the subject of complaints because beneficiaries may not know that they are being denied services to which they have a right. In addition, advocates should look at how plans define complaints and how their record-keeping differs among plans. Such differences may limit comparisons among plans. Plans that do a good job of informing members of their right to lodge a grievance may have higher numbers of grievances than plans that have not informed members of grievance rights. Finally, if a plan's grievance process is long and complicated, beneficiaries may abandon the effort before their problems are resolved.
d. Telephone complaint line-Some states have established 800 numbers that beneficiaries can call for information and assistance with managed care problems. These hotlines may be required to log only calls in which beneficiaries state that they want to make a complaint or to report on all calls by type and disposition. States may have one special hotline that is for Medicaid managed care enrollees (perhaps operated through an enrollment broker) and other hotlines for all managed care consumers. Find out how your state requires hotlines to report calls. Talk with hotline operators to learn when they categorize calls as information requests and when as complaints. Also find out whether the hotline reports complaints itself when it refers callers to their managed care plans to lodge grievances.
e. Ombuds programs-Some states operate ombuds programs, either directly or through contracts with independent nonprofit organizations. These programs investigate and attempt to resolve complaints about managed care plans made by or on behalf of Medicaid beneficiaries. Some mediate disputes between enrollees and plans to ensure prompt resolution of problems. Others advocate for Medicaid beneficiaries and represent them in grievances and fair hearings. Generally, ombuds programs keep data about the calls they receive and the help they provide. They are often asked to identify systemic issues.
f. Medicaid fair hearings-Medicaid agencies are responsible for administering fair hearings. In some states, the Department of Social Services conducts fair hearings for the Medicaid agency under an interdepartmental agreement. According to Medicaid regulations, the public must have access to all agency hearing decisions. However, federal regulations do not require collection or reporting of data on hearing requests.
Of all of the possible complaint mechanisms, fair hearings afford the strongest protections of Medicaid beneficiaries' rights. However, for two reasons, relatively few managed care complaints result in fair hearings. First, relatively few managed care-related requests for fair hearings are filed. Given the multitude of complaint channels available, many beneficiaries pursue problems through other routes. Often, beneficiaries are unaware of the fair hearing process. Second, many of the requests for hearings do not result in actual hearings. Issues may be resolved informally before the hearing actually takes place.
Analysis and Use of Complaint Data
You may be able to use data to compare the rates at which enrollees complain-i.e., file grievances and file fair hearing requests-across plans, examine the length of time it takes plans or the state to resolve complaints, examine the percentage of grievances that are resolved in favor of the complainant, and examine the types of problems that give rise to complaints and the extent to which plans and the state use complaint information to address systemic problems.
a. Ensuring clear and complete notice to beneficiaries of their rights
The right to dispute an unfavorable health care decision is one of the fundamental protections afforded Medicaid beneficiaries. In order to exercise that right, beneficiaries must have a clear and timely understanding of their right to file grievances and to appeal health plan decisions. Advocates must examine the materials and procedures used to notify beneficiaries of their rights and monitor whether those efforts are successful in reaching beneficiaries.
Step One: Collect Available Information from Member Handbooks
Collect and review informational materials from plans regarding complaint procedures. Obtain a copy of the member handbook and request a copy of the plan's internal grievance procedures. With respect to plans' internal grievance procedures, determine how well member handbooks explain the following: procedure for filing a grievance, right to timely review, right to representation, right to language assistance, and right to review records. With respect to fair hearings, determine how well member handbooks explain the following: right to file fair hearing requests and procedure for filing, timelines, right to representation, and the right to continued Medicaid benefits pending a hearing decision.
Step Two: Review Plans' Notices to Beneficiaries
Request samples of notices that plans send to beneficiaries when the plan terminates, reduces, or denies a service. Request any notices that the plan sends to beneficiaries who have filed a complaint, such as notice of a right to formal review after member services informally tries to resolve a problem, notices of decisions, or general explanations of complaint procedures. Check to see whether the notices adequately explain beneficiaries' rights and are generally understandable. Does the plan give beneficiaries notice when it denies or reduces services? If so, does the plan use the same form letter for both, and does the letter inform beneficiaries of their rights to file a grievance, request a fair hearing, and get continued services pending the final hearing decision? In cases where provider groups provide this information, do the practices of providers within the plan vary?
Step Three: Interview Member Services Representatives About How They Handle Complaints
Find out whether member services representatives have any protocols about complaint resolutions. When do they handle complaints directly? When and how do they document complaints? Do beneficiaries face language barriers when they call member services about problems? When do member services representatives notify beneficiaries of formal grievance and fair hearing mechanisms and suggest that they file formal complaints?
Step Four: Find Out Whether Beneficiaries Really Understand the Grievance Process
After determining what, how, and when beneficiaries are told of their complaint rights, collect information on how beneficiaries experience this process. You can gather anecdotal information through community organizations and legal services programs. You can also check whether knowledge of the complaint process is addressed on member satisfaction surveys conducted by the plan or the state.
b. Reviewing the nature of complaints to detect any pattern of problems
Step One: Gather Information from All Sources
Seek data that might provide specific information on the types of problems about which beneficiaries complain. Pick a period of time to review (such as a year) and gather all the information available for that time period. Information may be available from the following sources:
- State hotlines for Medicaid managed care enrollees,
- State hotlines for all managed care consumers,
- Complaint data kept by the state insurance commission,
- Written reports compiled by contract managers in the Medicaid agency (or, if there are not written reports, oral information about any complaint or grievance issues that have come to the contract manager's attention),
- Grievance data (aggregate or summary) from the health plans, perhaps through the plans' advisory committee or reported to the state Medicaid agency,
- Fair hearing decisions on managed care issues, and
- Community organizations, ombuds programs, and advocates in the field regarding problems that clients are reporting.
Step Two: Review the Data
Try to group the issues reported into general categories. Look at the categories of complaints over time. Are there patterns of complaints among the various sources of data? Can you determine whether an issue that gave rise to a number of complaints has been addressed? You may be able to find out how systemic issues were addressed by contacting the contract manager in the Medicaid agency or obtaining a copy of a hearing decision.
Step Three: Look Beyond the Numbers
Keep in mind that volume is only one indicator of systemic complaints. Even a single complaint can indicate a problem with a plan's policies or with a plan's adherence to contract standards.
For example, the ombudsperson in San Mateo, California found that her periodic reports to the plan's Consumer Advisory Group have proven a helpful vehicle for changing plans' policies and procedures. For instance, she received one complaint from a person who could not get a plan to authorize nutritional supplements. Upon investigation, she learned that doctors had to complete a lengthy questionnaire to get plan coverage of the supplements and that nutritionists were not being consulted. Through outreach to community organizations serving senior citizens, the ombudsperson learned that a number of other enrollees had difficulty obtaining supplements. Working through the Consumer Advisory Group, the ombuds program was able to change the plan's questionnaire and procedures for authorizing nutritional supplements.
You will want to check to see whether plan officials who receive complaints are sensitive to underlying problems.
Step Four: Investigate any Issues You Find
Creative thinking is very helpful, since the data will not easily allow you to monitor one plan alone. You may be able to spot a particular problem and then follow up with a particular plan. You may also have findings about the difficulties of monitoring complaint patterns using available data and be able to make recommendations for improvements.
c. Reviewing complaint, grievance, and fair hearing rates
You may want to compare the rates at which enrollees in various managed care plans express dissatisfaction either to the plan or the state. Keep in mind that differences in complaint rates might indicate differences in satisfaction or differences in enrollees' knowledge of complaint procedures. Also remember that there will be multiple sources of data that may reveal information about a given plan.
Step One: Decide which Complaint Channels You Wish to Review
Given the nature of the complaint channels, no analysis will capture the complete picture of all complaints about a particular plan. One strategy is to compare complaint rates by type of complaint and disposition among plans by using your state insurance commission's data or Medicaid managed care hotline data. A second strategy is to analyze aggregate data on complaints received directly from the plans. Make sure you understand the definition of complaint used by plans. Are plans all reporting similar complaint statistics? Do they record calls in which members informally voice complaints as well as written requests for a review of a plan's decision?
Step Two: Calculate the Rates
Once you have decided what category of complaints to compare, calculate complaint rates for each plan using the following formula:
RATE PER 1000 ENROLLEES =
(# of complaints or grievances per plan ? ÷
Medicaid enrollment for the plan) x 1000
For complaint data that are reported monthly, use enrollment figures for that month. If you are looking at the total number of complaints (whether informal complaints, formal grievances, or fair hearing requests) in a year, use average annual enrollment.
When comparing complaint rates among plans, also look at the informational materials. Are differences in informational materials or in complaint procedures themselves likely to account for differences in complaint rates among plans?
d. Calculating complaint response time
Under federal law, Medicaid managed care plans must provide "prompt" resolution of grievances. Currently, states may set timelines for grievance resolution through contracts with Medicaid managed care plans or through state laws and regulations applying to all managed care plans. 14When federal regulations are issued later in 2000 under the Balanced Budget Act of 1997, they will likely set national maximum timelines for Medicaid managed care grievance resolution. States could still set shorter timelines.
Step One: Gather the Data
Find out how your state monitors adherence to grievance timelines. Do plans regularly report how many grievances are pending and how long they have been pending? If so, get these reports. Does the External Quality Review Organization examine adherence grievance timelines as part of its annual quality review? If so, gather the review reports.
Step Two: Calculate the Percentage
Highlight the number of instances in which plans exceed state timelines for resolving grievances. You can express this as a percentage of reviews that are late:
percentage of reviews that are late =
(# grievance reviews exceeding timeline ÷
total # grievance reviews) x 100
You can use the same formula to calculate expedited reviews that exceed state timelines.
Step Three: Find Out How Much Time Passes between Beneficiaries' Initial Complaints to a Health Plan and the Fair Hearing Decisions
Gather information about your state's procedures for scheduling fair hearings on Medicaid managed care disputes. At least one state, Tennessee, logs in all grievances as potential hearing requests to ensure final decisions within 90 days. Does your state have procedures to ensure final decisions within 90 days? If a Medicaid managed care enrollee appeals to the state after exhausting a plan's internal grievance procedures, how long does the state take to issue a final decision? Interview legal services advocates about cases they have handled. You may also be able to gather information from fair hearing decisions about when beneficiaries first lodged their complaints with the state and with the health plan.
Under federal Medicaid law and regulations, beneficiaries are entitled to final administrative decisions within 90 calendar days of the date that a request for a fair hearing is first made. Advocates argue and courts have held that in managed care settings, this time frame is triggered either by the member's request directly to the state for a fair hearing or his/her request to the plan for resolution of the complaint. The argument is that a plan's grievance procedures violate due process if they, either on paper or in fact, delay a final fair hearing decision beyond this 90-day time frame. (For more information, see Families USA and National Health Law Program's A Guide to Complaints, Grievances and Hearings Under Medicaid Managed Care, Washington, D.C.: Families USA,1998, a fact sheet is also available.
Step Four: Prepare Your Conclusions
Explain what slow grievance response time means for enrollees-particularly for enrollees who are not satisfied with a plan's decision and who then go on to request a state fair hearing. You can supplement your statistical analysis with anecdotes about hardships faced by beneficiaries awaiting approval of medical care. Legal services programs and advocacy organizations can provide case studies of persons who requested fair hearings regarding managed care disputes.
e. Examining complaint outcomes
You may want to highlight the extent to which plans or fair hearings resolve complaints in favor of the beneficiary.
Step One: Show the Ratio
number of grievances (or hearings) decided in favor of
the Medicaid managed care enrollee ÷
total number of grievance (hearing) decisions
Step Two: Develop a Strategy for Presenting the Information
You can use this information to encourage beneficiaries to pursue complaints if your data show that beneficiaries are often likely to win an appeal. You can also use complaint outcome data to raise questions about plans' initial decisions. If Medicaid managed care enrollees who complain about plan denials usually prevail, advocates might question whether managed care plans' initial utilization review procedures are appropriate. If Medicaid managed care enrollees usually lose when they file grievances with their managed care plan but win when they file for a state fair hearing, a plan's grievance review procedures merit examination.
Making Recommendations to Improve the Complaint System
As a result of your findings, a number of potential issues may emerge meriting an advocacy initiative. Some possible areas to explore follow:
1) Do managed care plans use complaint data in internal quality improvement efforts? Can plans cite instances in which complaints led them to change internal policies? Can you obtain copies of minutes from quality assurance committees that document a discussion of grievances and corrective action?
2) Have plans that have been overruled in fair hearing decisions been ordered to fix underlying problems or sanctioned when they did not meet contract standards?
3) Do you find an overreliance on managed care organizations to settle disputes? Are plans tracking the complaints resolved by physicians and provider groups? What are the implications of the lack of state oversight of complaint resolution at the provider level? Does your study show that resolving disputes at the sub-plan level helps or harms consumers?
4) Do the current data collection and report processes adequately reflect the complaints raised by consumers? What could be done to improve the system?
Endnotes
1 Statement by Gordon Bonnyman, Tennessee Justice Center, at Families USA Conference, Washington, D.C., 1997.
2 Maureen Booth, Trish Riley, and Elizabeth Mitchell, Building Quality in Medicaid Managed Care: What Policymakers Need to Know (and Do!) (Portland, ME: National Academy for State Health Policy, February 1998), p. 11.
3 Christine Molnar, Denise Soffel, and Wendy Brandes, Knowledge Gap: What Medicaid Beneficiaries Understand-and What They Don't-About Managed Care (New York, NY: Community Service Society, 1996), 33; Families USA memo, "Findings from a Head Start Survey," Washington, D.C., April 1998.
4 Families USA Foundation, and National Health Law Program, A Guide to Complaints, Grievances and Hearings Under Medicaid Managed Care (Washington, DC: Families USA Foundation, January 1998).
5 This is a problem for commercial managed care as well. A GAO study of appeals in five states found that insurance regulators recorded information about HMO complaints they received directly from the public but did not require HMOs to report the number of complaints and appeals the HMOs received. HMO Complaint and Appeals System (Washington, DC: General Accounting Office, GAO/HEHS-98-119, 1998).
6 42 C.F.R.§ 434.32.
7 42U.S.C. § 1396a(a)(3); 42C.F.R.§ 431.200 et seq.
8 e.g., Daniels v. Wadley, 926 F.Supp. 1305 (M.D.Tenn.1996) pending on appeal.
9 Interim Final Guidelines, Quality Improvement System for Managed Care, U.S. Department of Health and Human Services, Health Care Financing Administration, September 28, 1998.
10 For example, HCFA's draft list of indicators for monitoring the District of Columbia's Section 1915(b) waiver included number and type of telephone complaints and inquiries received by the District and its benefits consultant; number and type of telephone inquiries and complaints received by the managed care organization; number of grievances filed; number of requests for expedited grievances; median length of time for processing expedited grievances. (Letter to Paul Offner, Commissioner on Health Care Finance, Washington, D.C. from Rachel Block, Director, Medicaid Managed Care Team, HCFA, Baltimore, MD, outlining terms and conditions on the District's 1915(b) waiver, March 19, 1997).
11 1996 Medicaid Semi-Annual Report, Table 4, Albany, New York: Department of Health.
12 42 C.F.R. § 431.244.
13 Telephone conversation with Laurie Sobel, Ombudsperson, Health Plan of San Mateo, California, July 22, 1997 - reprinted from the Families USA Foundation and National Health Law Program publication, A Guide to Complaints, Grievances and Hearings Under Medicaid Managed Care (Washington, D.C.: Families USA, January 1998).
14 Table 6.2 of S. Rosenbaum et al., Negotiating the New Health System: A Nationwide Study of Medicaid Managed Care Contracts, Third Edition [Washington, DC: George Washington University Center for Health Services Research and Policy, 1999 (http:// lists state timelines that applied in 1999].
