J

Medicare Managed Care: Protecting Consumers and Enhancing Satisfaction

Patricia A. Butler*

Introduction

Although only about 10 percent of Medicare beneficiaries are enrolled in health maintenance organizations (HMOs), enrollment has been growing rapidly, more than 20 percent annually since 1994 (U.S. General Accounting Office, 1995c). Recent congressional proposals also would encourage even greater levels of participation in managed care plans, including provider networks and other arrangements. Any significant change in Medicare requires attention to the effects on its beneficiaries who may be unfamiliar with different delivery systems. Consumer protection is particularly important in a movement to enroll Medicare beneficiaries into capitated managed care organizations because of capitation's incentives to underserve and the greater health care needs of the elderly.

Understanding what managed care features and practices please or disappoint enrollees is important to both plans and policy makers contracting with them in a more competitive Medicare marketplace. The purpose of this paper is to examine sources of Medicare health plan enrollee satisfaction and dissat-

*  

Health care consultant, Boulder, Colorado.



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--> J Medicare Managed Care: Protecting Consumers and Enhancing Satisfaction Patricia A. Butler* Introduction Although only about 10 percent of Medicare beneficiaries are enrolled in health maintenance organizations (HMOs), enrollment has been growing rapidly, more than 20 percent annually since 1994 (U.S. General Accounting Office, 1995c). Recent congressional proposals also would encourage even greater levels of participation in managed care plans, including provider networks and other arrangements. Any significant change in Medicare requires attention to the effects on its beneficiaries who may be unfamiliar with different delivery systems. Consumer protection is particularly important in a movement to enroll Medicare beneficiaries into capitated managed care organizations because of capitation's incentives to underserve and the greater health care needs of the elderly. Understanding what managed care features and practices please or disappoint enrollees is important to both plans and policy makers contracting with them in a more competitive Medicare marketplace. The purpose of this paper is to examine sources of Medicare health plan enrollee satisfaction and dissat- *   Health care consultant, Boulder, Colorado.

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--> isfaction and mechanisms to address consumer complaints through appeals processes and government oversight. The paper is divided into five sections. The next outlines current research evidence on Medicare HMO enrollee satisfaction. The the appeals processes available to Medicare health plan enrollees unhappy with plan coverage, payment, access, and other performance issues are then outlined. Current roles and standards of the federal and state governments in regulating managed care are then described. Consumer protection policy issues that arise in a competitive Medicare market are identified and the paper concludes with recommendations for further research and analysis. Medicare Managed Care: Sources of Satisfaction and Dissatisfaction Like most Americans, the vast majority of Medicare beneficiaries enrolled in managed care plans respond positively to surveys of consumer satisfaction (Adler, 1995; Ferguson, 1995; Minnesota Health Data Institute, 1995; Rossiter et al., 1989; Ward, 1987). Working Americans enrolled in HMOs are about as satisfied with overall plan performance as people receiving care on a fee-for-service basis. Health plan enrollees, however, are more likely to rate highly their plan's premiums and cost sharing and are less likely than their indemnity plan counterparts to be happy with physician-patient interactions or general ''quality" (Miller and Luft, 1994). People suffering from poor health or chronic conditions enrolled in managed care plans are more likely than those enrolled in fee-for-service plans to report problems (The Robert Wood Johnson Foundation, 1995). Analysts also have found that although Medicaid managed care improves access to care by several measures, enrollees are somewhat less satisfied than those in fee-for-service care, particularly if they do not remain with their personal physicians (Freund et al., 1989; Hurley et al., 1991). Despite Medicare enrollees' overall high degree of satisfaction with managed care plans, it is important to understand the sources of complaints of those who are dissatisfied. Disenrollment is costly for plans and beneficiaries. Plans do not want to waste resources enrolling people who will not remain in the

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--> plan because marketing to individuals is very labor-intensive. Furthermore, as discussed below, unhappy enrollees sometimes have difficulty disenrolling quickly, and delays can both be costly (if they are liable for bills to nonplan providers) and adversely affect their health (if they are unable to obtain desired benefits). Furthermore, people may have given up their supplemental coverage and have difficulty resubscribing. This paper focuses on consumer reports of satisfaction and dissatisfaction rather than evaluations of HMO quality from other viewpoints. (The paper by Joyce Dubow synthesizes research on Medicare HMO quality on the basis of process and outcome measures.) HMO Enrollee Satisfaction Surveys Only a few studies, which vary in scope and methodological sophistication, have been published on the satisfaction of Medicare enrollees in risk contracting plans. The Health Care Financing Administration (HCFA) does not routinely publish information on consumer complaints appealed through its formal process, through plan internal grievance systems, or to the local peer review organization (PRO), although HCFA uses such data in reviewing plan quality (U.S. General Accounting Office, 1995a). The information in this paper derives from a handful of recent surveys of Medicare plan enrollee satisfaction, which produce a reasonably consistent picture of what enrollees do and do not like about their plans. Although useful, these surveys have limitations. First, they examined a voluntary market and might produce different results if there were greater incentives to enroll in HMOs. Second, even when defined by a series of specific survey questions, "satisfaction" is a subjective concept that measures the extent to which one's personal expectations are met. Furthermore, surveys may not include people most likely to use services, such as those with chronic or acute illnesses, who may experience greater problems with access or provider conduct than healthier enrollees.1 Yet if financial incentives to enroll in managed care 1   Regardless of whether Medicare HMOs currently receive favorable or adverse selection, which remains unclear, people with chronic illnesses and disabilities who are likely to use medical care represent a small proportion of the

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--> are as strong as many policy makers hope, more people with such conditions are likely to be enrolled in managed care plans in the future. A limitation of studies of problems and complaints is that they generally do not compare HMOs with performance by providers in the fee-for-service Medicare program, making it difficult to determine whether these problems can be attributed only to HMO enrollment. Finally, current Medicare research has examined only HMOs, although HCFA is experimenting with other kinds of managed care organizations, which might raise different consumer protection issues. Medicare HMO Enrollee Surveys The first published study to compare Medicare enrollees in the "risk contract" (capitated HMO) demonstrations with those receiving care in the traditional fee-for-service system assessed satisfaction with technical and interpersonal aspects of care, convenience, and waiting times for appointments (Rossiter et al., 1989). The researchers found that about 80 percent of both groups were "very satisfied" with their health care overall. HMO enrollees, however, were considerably less satisfied that other Medicare beneficiaries with perceived professional competence and provider willingness to discuss problems and were more satisfied with waiting times and claims processing. Moreover, disenrollment rates were high. About 18 percent of enrollees disenrolled during the 12 to 15 months between study interviews. Over one quarter of those disenrolling during the first 3 months apparently misunderstood the nature of the plan (limitations on physicians or covered services), and about half of those disenrolling later were dissatisfied with the plan (because of location, poor care, or lack of physician continuity). Two recent surveys report that Medicare HMO enrollees are happier with their care than those in the traditional Medicare program. The Minnesota Health Data Institute found Minnesotans enrolled in five Medicare HMOs statistically significantly more likely to be "very or extremely satisfied" with their Medi-     total enrollment and may be underrepresented in surveys if they are too frail to respond. If an objective is to understand sources of dissatisfaction, the people most likely to use health care should be oversampled.

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--> care experience than non-HMO enrollees and much less likely to be dissatisfied (Minnesota Health Data Institute, 1995). This pattern held for several specific measures of satisfaction: adequacy of benefits covered, paperwork, satisfaction with specialists, practitioners' willingness to listen and explain, and thoroughness of examinations and treatment. HMO enrollees expressed levels of satisfaction and dissatisfaction comparable to those of nonenrollees on other measures, such as ability to obtain care when needed, scheduling appointments when they were sick, and getting telephone assistance. Similarly, a study of Blue Cross/Blue Shield's Medicare HMO members found them to be statistically significantly more satisfied with overall quality of care, paperwork, cost, prescription coverage, and preventive and vision services but less likely to be satisfied with their freedom to choose physicians (Ferguson, 1995). The rates by which HMO and other respondents were "very satisfied" did not differ statistically significantly on issues such as physician and hospital quality, time with physicians and staff, or access to specialists, hospitals, emergency care, or technology. Respondents with various specific medical conditions or fair and poor health reported similar rates of satisfaction. To identify sources of dissatisfaction among HMO enrollees who might be more likely to have complaints, a recent study compares Medicare health plan enrollees with those who had disenrolled (Office of Inspector General, 1995). Disenrollees were much less likely to have a full understanding of the restrictions on out-of-plan use. They were more likely to report (1) longer waiting times to get appointments with specialists or appointments with their primary care physicians when they were very ill; (2) dissatisfaction with telephone waiting time; (3) inability to obtain access to care that they felt they needed from their primary care physicians, referral to specialists, or payment for emergency care; (4) out-of-plan use; and (5) lack of sympathetic treatment by their physicians (not perceived as helpful and not taking complaints seriously). Disenrollees without prior experience in a managed care plan were much more likely to report negative perceptions or experiences. These differences were even greater after omitting from the analysis the 30 percent of disen-

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--> rollees who left their plans for administrative reasons (who moved or whose physician left the plan). Among current enrollees, 16 percent said that they would like to leave their HMO. A small share were leaving the service area, but the majority (more than 60 percent) felt that they could not leave because they felt that the HMO was the only way to afford needed care. Although this group represented only 10 percent of the total enrollees surveyed, it is important to understand their concerns. These dissatisfied HMO enrollees reported that disenrollment was not an option and appeared to feel trapped into delivery systems with which they were not satisfied. One particularly troubling finding in the Inspector General's study was that compared with Medicare disenrollees who were elderly, those who were disabled or had end-stage renal disease were much less satisfied with their ability to obtain access to needed services and specialists and much more likely to report that physicians did not take their health complaints seriously, use out-of-plan care, believe that HMO physicians are motivated by cost rather than providing good care, and indicate that the HMO caused their health to get worse. The disabled disenrollees had shorter waiting times for appointments. Almost two thirds (66 percent) of disabled HMO enrollees, however, reported wanting to leave their HMO but feeling unable to do so because of the cost of the alternative. Similarities between these perceptions and those of commercial HMO enrollees who were ill and who responded to a recent survey (The Robert Wood Johnson Foundation, 1995) raises concerns about the ability of HMOs to serve people with disabilities and poor health status. Focus Group Studies The most recent research on Medicare health plan satisfaction comes from two organizations that held focus groups in several U.S. cities among current and former Medicare HMO enrollees as well as people who had never enrolled (Frederick/Schneiders, Inc., 1995; Gibbs, 1995). In addition to noting some persistent impressions about HMOs (poor-quality doctors or long waiting times for appointments) that discourage people from enrolling, those studies found that the biggest obstacle to join-

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--> ing an HMO is the limited choice of physicians, especially if one must change from a current physician with whom one is satisfied. Other disadvantages cited by some enrollees were waiting time on the phone and in the office as well as delays in obtaining an appointment. The major advantages of HMOs cited by their enrollees are lower cost, certain valued additional benefits (particularly pharmaceutical benefits but also annual physical examinations), no paperwork, and the opportunity for coordinated care (Frederick/Schneiders, Inc., 1995). The authors of one study reported the negative impressions of HMOs and managed care in certain cities, such as Miami, where health plan reputations have not been good, compared with those in communities such as Minneapolis, where HMO penetration is high in commercial and public sectors and they are regarded favorably (Frederick/Schneiders, Inc., 1995). Study of Consumer Complaints In contrast to surveys and focus group research that analyzed overall enrollee experiences, a 1993 study of Medicare enrollees in 10 risk contract HMOs in California focused on consumer problems (Dallek et al., 1993). 2 It was designed to provide examples of problems, not to indicate their prevalence. Because it drew experience from only one state, it may not reflect overall Medicare HMO experience. (As noted above, Minnesota Medicare HMOs have received high satisfaction ratings.) This study is included because it represents the most detailed review of Medicare HMO consumer problems. On the basis of information from HCFA, the California Department of Corporations (which licenses HMOs), health plan questionnaires, consumer advocacy organizations, and providers, the Medicare Advocacy Project (now the Center for Health Care Rights) cited instances of verified consumer complaints with plan marketing and care delivery. Stiff competition for Medicare enrollees seems to have led to marketing abuses. For 2   Additional, more recent examples of similar problems in marketing, disenrollment delays, and access to services in California and New York were provided in congressional testimony in mid-1995 (Dallek, 1995).

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--> example, some plans enrolled people who could not have been expected to understand the terms of enrollment because they did not speak English, could not see or hear, or had cognitive limitations such as senility. Because of commission structures, quotas, and lack of training, some sales representatives engaged in high-pressure sales tactics that were especially intimidating for older people in their homes. Some salespeople misrepresented the services available or did not explain plan requirements to use a limited network ("lock-in"), obtain specialist referrals from gatekeepers, or receive payment for emergency care in only narrowly defined emergencies. In a few instances, they forged signatures or lied about the significance of a signature on an enrollment form. State programs assisting Medicare beneficiaries choose health plans, and consumer advocates report that such sales practices remain current problems. These marketing abuses are similar to those in the Medicare Supplemental coverage market that led the U.S. Congress to enact consumer protections (U.S. General Accounting Office, 1991). As analysts have suggested, disenrollment within 90 days of initial enrollment can indicate misunderstanding of the features and constraints of a managed care plan (Dallek et al., 1993; Rossiter et al., 1989; Office of Inspector General, 1995). In HCFA's Region IX, about 30 percent of disenrollment in the second quarter of 1995 occurred within 90 days, suggesting that a substantial portion of disenrollees did not understand the nature of the program that they enrolled in. The California report noted the difficulty that some people have in disenrolling when they have been induced into enrollment by fraud, misrepresentation, or misunderstanding. Plans are required to provide enrollees information on disenrollment and to process disenrollment requests promptly, but they do not always do so. As the General Accounting Office (GAO) found, beneficiaries who continue to use their regular providers may be liable for these costs (U.S. General Accounting Office, 1995a). HCFA permits retroactive disenrollment for people misunderstanding the HMO lock-in requirements who have not used HMO services, in which case it will pay charges for services provided during the unintentional HMO enrollment (HCFA

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--> HMO/CMP Manual Section 2002.3). It is not clear, however, that beneficiaries are aware of this opportunity. The California study also identified examples of consumer complaints regarding access to and quality of care. One source of dissatisfaction is the HMO's network of primary and specialty physicians. Some enrollees, for example, did not understand that primary care physicians on the HMO's provider list may not be accepting new patients or a provider may have a limited contract (for example, a tertiary specialty center providing only selected services upon referral). The report raised three concerns about access to specialists: Is the panel of specialists sufficient to serve enrollees, are primary care physicians willing to refer patients to specialists when needed, and are restrictions on access to providers explained clearly? The Medicare statute prohibits HMOs from making specific payments to physicians to limit medically necessary care to an individual enrollee, but most HMOs place physicians at some financial risk to temper their use and authorization of care (Physician Payment Review Commission, 1995). Although patients and physicians may differ on the need for a referral to a specialist, this is a source of considerable dissatisfaction. Disputes over payment for nonplan providers and emergency care represent the majority of Medicare beneficiary appeals filed with HCFA (Network Design Group, 1995). The California study reported enrollee complaints about access to rehabilitative services, particularly after hospitalization. For example, HMOs may deny authorization for short-term skilled nursing facility services; home health care;3 physical, speech, or occupational therapy; or durable medical equipment (walkers and wheelchairs), all of which are Medicare-covered services when they are medically necessary or will improve functional status. If the HMO defines medical necessity or functional potential narrowly, disputes over needed care will arise. 3   It is not clear from current research whether Medicare HMOs generally provide less access to home health care. The Mathematica study found a greater likelihood but lower numbers of visits (Brown et al., 1993), whereas Shaughnessy and colleagues (1994) found less use of home health care and poorer outcomes in Medicare HMOs than in the fee-for-service system.

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--> In the fee-for-service realm, such differences of opinion often involve debate over who will pay for a service already provided. In a capitated health plan, however, these disputes generally occur before a service is rendered. Because the appeals process, discussed below, is often not understood and is always lengthy, an HMO's denial of coverage may result in the service not being provided. In some cases, by the time that an appeal is decided in favor of an enrollee, the service, such as short-term rehabilitation, may no longer provide benefit (U.S. General Accounting Office, 1995a). Summary of Evidence of Medicare HMO Enrollee Satisfaction and Dissatisfaction Research on what makes Medicare HMO enrollees happy enough to stay in their plans or unhappy enough to desire to leave them reveals the following: Most people are satisfied with their managed care plans (Ferguson, 1995; Minnesota Health Data Institute, 1995; Rossiter et al., 1989), but a substantial fraction (perhaps 20 percent) are dissatisfied and some plans have experienced annual turnover of up to 20 percent (Dallek et al., 1993), although disenrollment rates vary widely and may be lower in mature HMOs. Although instances of deliberate misrepresentation are probably rare, even marketing information approved by HCFA can be confusing to some Medicare beneficiaries and sales tactics can be intimidating (Dallek, 1995; Dallek et al., 1993). Salespeople may not spend enough time answering questions thoroughly or satisfying themselves that each enrollee fully understands the HMO's features, limits, and procedures for use. People who do not understand the nature of the HMO, its limited network, its gatekeeper restrictions, its process for referral to care, the actual availability of primary care physicians, how they can change providers, and limits on out-of-area and emergency care appear likely to be unhappy and disenroll quickly, particularly if they are satisfied with their personal physicians outside the HMO (Office of Inspector General, 1995). Although the vast majority of enrollees are happy, some

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--> who understand and accept the general limitations of an HMO still report problems, whose prevalence is not well documented but which can be grouped into four categories: poor provider technical quality, such as thoroughness of exams (Rossiter et al., 1989); poor provider interpersonal quality, such as unwillingness to discuss problems and explain diagnoses and treatments or lack of sympathy toward the patient (Rossiter et al., 1989; U.S. Department of Health and Human Services, 1995); inconvenience, such as the time required to obtain an appointment or the time that one must wait on the phone or in the office (U.S. Department of Health and Human Services, 1995); and access, including geographic proximity to offices, ability to see specialists, disputes over emergency care (in and out of the plan), and access to posthospital recovery and rehabilitation services or durable medical equipment (Dallek, 1995; Dallek et al., 1993; U.S. Department of Health and Human Services, 1995; U.S. General Accounting Office, 1995a). Persons eligible for Medicare because of disability who disenroll from HMOs report considerably less satisfaction than elderly disenrollees on measures such as obtaining referrals to specialists or obtaining covered services, suggesting that HMOs may not all meet the needs of people with chronic illness and other serious health problems. Most disabled Medicare HMO enrollees report that they want to leave the HMO but are unable to do so because of inability to afford needed care under the fee-for-service system (Office of Inspector General, 1995). Although fewer studies have attempted to discover what HMO enrollees really like about their plans that keep them enrolled, it appears that Medicare enrollees, like those in commercial plans, prefer HMOs for their cost containment and preventive orientation. They especially value additional services such as prescription drugs. They also seem to appreciate the opportunity that HMOs offer to coordinate care-the positive side of a gatekeeper requirement (Ferguson, 1995; Frederick/ Schneiders, Inc., 1995; Gibbs, 1995; Minnesota Health Data Institute, 1995; Rossiter et al., 1989).

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--> does not guarantee that they will be referred to such providers. It also may be useful for prospective enrollees to understand how HMOs pay their physicians in order to evaluate disincentives to provide needed care (Stocker, 1995), although this information might be difficult to convey in a simple and comprehensible way. It is not entirely clear what kind of information Medicare beneficiaries want in order to choose among managed care plans and other options. Research under way at NCQA to learn from focus groups and other sources what plan information consumers would like. Some Medicare beneficiaries not enrolled in HMOs who participated in two recent focus group studies were skeptical about consumer satisfaction ratings and indicated that this information would not be useful to them in choosing among plans unless the reports included specific questions of interest to them, information on who responded, and the sponsoring organization (Frederick/Schneiders, Inc., 1995; Gibbs, 1995). Medicare consumers appear similar to other prospective health plan enrollees recently surveyed by GAO who reported wanting more information on health plan outcomes and quality but expressed skepticism about reliability and validity of plan-generated "report cards" (U.S. General Accounting Office, 1995b). Counseling and Advocacy Services Even with better-trained and motivated plan sales staff and improved marketing and enrollment materials, prospective health plan enrollees may need the assistance of independent counselors to answer questions about the nature of managed care and specific plans. Although some people may be misled by plan marketing, others doubt that a plan's information will be objective and would value access to an outside source of information. Such assistance is provided by information, counseling, and assistance (ICA) programs funded by HCFA. Omnibus Budget Reconciliation Act 1990 provided federal funding for ICA programs (operating through a combination of paid staff and volunteer counselors at the state and local levels) to assist Medicare beneficiaries with obtaining appropriate public and private health insurance coverage (McCormack et al., 1994). Participants in a recent set of Medicare focus groups said that they

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--> trust and would use such organizations (Gibbs, 1995). Currently, all states have established ICA programs. Departments of Aging administer the grants in two thirds of the states, whereas Insurance Commissioners operate the remainder. Through individual counseling, group presentations, and written materials, the programs provide information about Medicare, supplemental insurance products, long-term-care insurance, managed care plans, and eligibility for Medicaid and other public programs. They also can help Medicare beneficiaries complete claims forms and file appeals. Programs in half of the states have developed consumer guidebooks. An evaluation of the first year of ICA program experience reported that it provides a valued service and has attracted committed volunteers and in-kind support, although evaluators recommended increased publicity and outreach and more standardized data collection and sharing of materials. For many years, some states had developed a spectrum of senior information and counseling services financed with state funds (Davidson, 1988; U.S. General Accounting Office, 1991). California, for example, funds its counseling programs through an earmarked portion of insurance agent and broker licensure fees. Neither the ICA program evaluation nor the few assessments of earlier programs for providing health insurance information to Medicare beneficiaries has demonstrated a clear effect on knowledge, attitudes, or decision making (Davidson, 1988). It is likely that most plans employ customer service representatives and other staff who can assist enrollees with access or other problems, but one plan providing information for this paper reported its intention to create a formal Medicare ombudsman position in 1996. An ombudsman can be either a neutral mediator or, as with long-term care ombudsmen, a patient advocate (Harris-Wehling et al., 1995). PROs in some states act as patient advocates. Wisconsin requires plans enrolling Medicaid beneficiaries to employ an independent enrollee ombudsman. ICA programs with sufficiently large paid or volunteer staffs function as mediators or patient advocates in some states. Quality, Access, and Information Standards In view of the types of problems reported by some Medicare

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--> HMO enrollees, the U.S. Congress and HCFA should consider adopting some additional standards to ensure access to appropriate care. They could draw upon state HMO licensure laws and regulations in defining more precisely the adequacy of provider networks, definitions of medical necessity and emergency care, standards for specialty referrals, and time or distance standards. Requiring verification of new enrollment and including cautions about whether physicians with HMO contracts are accepting new patients also could prevent or eliminate some sources of dissatisfaction. Which Level of Government Is Best Qualified to Set and Enforce Medicare Health Plan Standards? The choice of the level of government that should regulate Medicare health plans raises several competing considerations. Unlike the federal government, states have historically regulated the insurance industry, authority sanctioned by the U.S. Congress in the 1945 McCarran-Ferguson Act. Furthermore, all states have experience regulating the ''delivery system" aspects of managed care through their HMO licensure laws. Although managed care organizations are often national in operation, care delivery itself is inherently local, and state governments may be more responsive to local consumer concerns. Despite this state experience, however, the federal government should retain a significant role in Medicare health plan oversight. Medicare is a national program. As plans become more regional or national in organization, regulatory differences across state lines may complicate health plan operations. Model laws developed by NAIC can enhance the likelihood that state laws will be similar, although GAO points out the existence of many NAIC model laws does not guarantee that all states will adopt them (U.S. General Accounting Office, 1993a). Each level of government has strengths and weaknesses. GAO has criticized both federal Medicare HMO oversight (U.S. General Accounting Office, 1995a) and insurance regulation and Medicaid HMO oversight by some states (U.S. General Accounting Office, 1993a, U.S. General Accounting Office, 1993b). Consequently, consumers might best be served by a federal-state partnership similar to that used to certify health care institu-

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--> tions' compliance with federal law. The Medicare statute sets standards for hospitals, nursing homes, home health agencies, and other providers that the states are primarily responsible for applying and enforcing. Because state HMO licensure is currently required for Medicare risk contracts, it forms a floor for solvency and other standards and provides jurisdiction for state managed care regulators to monitor compliance with consumer protection standards. As the number and types of Medicare risk-bearing health plans increase, this relationship could be formalized so that states monitor compliance with federally established standards. As it does for health care facility certification, the federal government could oversee state performance of this responsibility and accept consumer complaints. Government standards and periodic audits could be coordinated with private accreditation to the extent that private standards serve Medicare consumer interests. Proposed Statutory Changes in Medicare Managed Care As part of a restructured Medicare program, the U.S. Congress considered changes to current policy regarding enrollment in or standards for managed care organizations. Some of these proposals could have enhanced consumer protections. For example, as discussed above, the conference bill would have required the federal government to provide comparative plan information on benefits, premiums, and quality indicators. The U.S. Senate's version of the bill (but not the conference bill) would have required an expedited process of appeal to HCFA for disputes over services or payment that would result in "significant harm" to an enrollee. On the other hand, several of these proposals would not benefit Medicare consumers. Door-to-door solicitation and gifts to encourage enrollment would no longer have been prohibited, which would likely lead to marketing abuses found in Medicaid managed care enrollment more than 25 years ago (D'Onofrio and Mullen, 1977) and Medicare Supplemental markets before 1990 congressional changes (U.S. General Accounting Office, 1991). Substituting accreditation (which typically involves review only every 2 or 3 years) for currently required annual ex-

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--> ternal review would have eliminated a more frequent source of oversight of plan performance. Because quality problems early in the life of these Medicare market changes could undermine the program's future, federal policy makers should ensure that quality and consumer satisfaction are paramount objectives in any move to increase Medicare managed care enrollment and that policy development and enforcement are adequately funded. Finally, permitting disenrollment only within 90 days after initial enrollment or at an annual open enrollment period, although increasing a plan's ability to budget and manage an individual's care, would eliminate an important safety valve for enrollees. In contrast to the current right to disenroll monthly, the conference bill would have permitted disenrollment after 90 days only if the plan misrepresented plan requirements or "substantially" violated a "material" contract provision. At least in the short term, the latter standard may be too restrictive. About 40 percent of Medicare beneficiaries filing appeals disenroll within 2 years of the disputed services (U.S. General Accounting Office, 1995a) and would not be able to disenroll under this standard. Recommendations for Further Research Information on Enrollee Satisfaction Additional research is needed on health plan enrollee sources of satisfaction and dissatisfaction. Of particular interest would be information from people recently disenrolled and from both enrollees and disenrollees who have actually used services and those who have poor health status. Satisfaction surveys can serve several functions and should be designed to meet multiple objectives. If they elicit information that prospective enrollees could use to compare plans, such as features that both satisfy and dissatisfy, they can enhance consumer choice. Surveys are also an important source of information for government monitoring agencies in deciding whether plans are meeting contract requirements and should be retained as contractors. Although regulatory sanctions would rarely seem appropriate for poor consumer ratings, survey responses (like other outcomes measures) could suggest patterns of poor care or access barriers

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--> that require further public agency investigation into actual care delivery or administrative systems. Multiple sources of information on satisfaction, such as routine enrollee surveys, targeted surveys of vulnerable groups, disenrollee "exit interviews," and information from appeals and grievance processes, are more likely than any single source to provide an accurate picture of reasons for satisfaction and dissatisfaction. National and plan-specific data on the prevalence of complaints and problems could be important to government monitoring agencies as well as plans that want to improve their performance. Valid and reliable measures of the construct of consumer satisfaction are needed. NCQA has begun a study to determine what information Medicare consumers would like in order to choose among health plans. Some plans have developed their own Medicare enrollee assessment tools (Hanchak et al., 1996). Both HCFA and the Prospective Payment Assessment Commission are developing surveys for Medicare managed care enrollees and disenrollees. It would be useful to collect such information routinely over time. Under a grant from the Agency for Health Care Policy and Research, the Research Triangle Institute is developing survey modules on consumer satisfaction that will generate information that consumers can use in choosing among health plans. Although that project does not include Medicare beneficiaries, the instruments could provide models that could be tested on them in order to develop model Medicare consumer satisfaction survey tools. These current research efforts may be able to shed light on an issue not addressed in the literature, the cost to administer consumer satisfaction surveys and to compile and distribute their results. HMO "Best Practices" Perhaps because of the competitive nature of the current market, it was difficult to obtain information from Medicare HMOs regarding enrollee complaints and policies to solicit and address them. (Only three of seven plans contacted for this paper responded to a request for a telephone interview.) A few plan administrators, however, did report that their plans conducted Medicare member surveys (some as often as quarterly) that reveal very high levels of satisfaction. These plans use

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--> information from surveys, member forums, and their grievance processes to inform physicians about enrollee concerns, educate members about plan features, and change policy. For example, one plan uses the results of consumer surveys in determining physician incentive pay and another uses the results in determining management incentive pay. One requires each of its contracting physician groups to include as part of its annual work plan a means of addressing at least one consumer satisfaction problem identified in the survey responses. Another decided to provide additional coverage of out-of-plan use in response to enrollee complaints about limits on such payment. Although competition creates incentives for plans to determine what makes enrollees happy or unhappy, information on the state-of-theart of Medicare HMO managed care could be useful to policy makers to set contract standards and promote innovation. It would be interesting to know, for example, whether more mature HMOs or those with more experience enrolling the elderly have more satisfied enrollees. How Best to Provide Information and Facilitate Its Use It also is important to determine not only what kinds of information Medicare beneficiaries say they want and will use (as discussed in other papers prepared for the committee) but also what channels of information are trusted and actually used. More research is needed on how plans should provide information. Because some enrollees will not avail themselves of even the most accessible outside information sources, it is imperative that plan sales staff provide accurate information in an atmosphere that fosters consumer trust, the opportunity to ask questions, and full understanding. Furthermore, it may be necessary to mandate that each salesperson use a checklist to disclose key information, such as lock-in restrictions, gatekeeper requirements (including in-plan and out-of-plan service use), referral procedures, and definitions of what emergencies will be covered. Research on ICA programs and other senior information and counseling programs could reveal what programs are best able to provide information and facilitate its use. Of particular interest could be the advocacy/ombudsman role of these programs and whether a conflict exists between responsibilities to provide

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--> unbiased information and to assist enrollees in resolving disputes. It would also be useful to study whether these programs reach not only better-educated beneficiaries but also those with less education, experience, and sophistication, who need them most. For these more vulnerable elderly, additional resources, including representatives who can actively facilitate decision making, may be necessary. If managed care enrollment increases as rapidly as some proponents expect, support for information and counseling services must grow as well. Consequently, research is needed on the costs of these programs and the levels of funding required to provide accessible and useful consumer information. It is difficult to measure the effectiveness and cost-effectiveness of these programs in affecting decision making. Yet such an assessment seems worth some effort, particularly to determine what features are associated with the most efficacious programs. Effectiveness of Government Consumer Protection Standards Government contracting and licensure standards should be evaluated. It would be useful to know, for example, whether the quality and access standards in innovative state HMO laws and various enforcement strategies are effective in improving quality and enrollee satisfaction. Of particular interest is how to strike the appropriate balance between adequately protecting consumers while not unduly micromanaging health plans. Conclusion Policy makers need to understand the sources of satisfaction and dissatisfaction of Medicare health plan enrollees. Such information can be useful to help prospective enrollees understand plan features in order to enroll in plans most likely to meet realistic expectations, provide the basis for establishing Medicare contract standards, and monitor contract compliance. Because plan performance will not always meet expectations, it is important to establish mechanisms to accept and resolve enrollee complaints in a time frame that does not impede access to needed care.

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--> In a more competitive health plan market, Medicare beneficiaries will be asked to be much more active consumers. Although consumer empowerment may be a laudable goal, policy makers should recognize that not all Medicare beneficiaries are equally comfortable with or able to perform such a role. Given adequate and well-presented information, some will be happy to make choices with little outside help. Others will have less confidence or ability to do so (because of age, education, or limited past experience with managed care) and will need independent information sources and possibly other assistance. It will be particularly important to monitor the health plan choice and enrollment experiences of the most vulnerable Medicare beneficiaries, especially those who are sick or frail, to determine whether a market system works for them. Some of the confusion, concern, and dissatisfaction about Medicare managed care may subside as working Americans currently familiar with managed care plans age into Medicare. However, especially during the transition to a system very different from that which most elderly people have previously experienced, public agencies have a responsibility to set and enforce standards to protect Medicare beneficiaries and to ensure expeditious disenrollment and expedited grievance mechanisms. References Adler, G. A. 1995. Medicare beneficiaries rate their medical care: New data from the MCBS. Health Care Financing Review 16(4):175-187. Booth, M., and E. Fuller. 1995. Quality improvement primer for Medicaid managed care: Final report. National Academy for State Health Policy: Portland, Maine. Brown, R. S., J. W. Bergeron, D. G. Clement, J. W. Hill, S. M. Retchin. 1993. The Medicare risk program for HMOs—Final Summary Report on Findings from the Evaluation—Final Report. Mathematica Policy Research, Inc.: Princeton, N.J. Dallek, G., Testimony before the Special Committee on Aging, United States Senate, 104th Congress, 1st Session, August 3, 1995. Serial No. 104-6. U.S. Government Printing Office: Washington, D.C. Dallek, G., A. Harper, C. Jimenez, and C. N. Daw. 1993. Medicare risk contracting HMOs in California: A study of marketing, quality, and due process rights. Center for Health Care Rights: Los Angeles, Calif.

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--> Dallek, G., C. Jimenez, and M. Schwartz. 1995. Consumer protections in state HMO laws. Volume 1: Analysis and Recommendations. Center for Health Care Rights: Los Angeles, Calif. Davidson, B. N. 1988. Designing health insurance information for the Medicare beneficiary: A policy synthesis. Health Services Research 23(5):685-720. D'Onofrio, C. N., and P. D. Mullen. 1977. Consumer Problems with Prepaid Health Plans in California . Public Health Reports 92(2):121-134. Ferguson, G. 1995. BlueCross and BlueShield Association national Medicare surveys: Summary of findings. BlueCross BlueShield Association: Washington, D.C. Frederick/Schneiders, Inc. 1995. Analysis of focus groups concerning managed care and Medicare. Henry J. Kaiser Family Foundation: Washington, D.C. Freund, D. A., L. F. Rossiter, P. D. Fox, F. A. Meyer, R. E. Hurley, T. S. Carey, and J. E. Paul. 1989. Evaluation of the Medicaid competition demonstrations. Health Care Financing Review 11(2):81-97. Gibbs, D. A. 1995. Information needs for consumer choice: Final focus group report. Research Triangle Institute: Research Triangle Park, N.C. Group Health Association of America. 1995. PHOs and the assumption of insurance risk: a 50-state survey of regulators' attitudes toward PHO licensure. Group Health Association of America: Washington, D.C. Hanchak, N. A., S. R. Harmon-Weiss, P. D. McDermott, A. Hirsch, and N. Schlackman. 1996. Medicare managed care and the need for quality measurement. Managed Care Quarterly 4(1):1-12. Harris-Wehling, J., J. C. Feasley, and C. L. Estes, eds. 1995. An evaluation of the long-term care ombudsman programs of the Older Americans Act. Institute of Medicine. National Academy of Sciences: Washington, D.C. Hurley, R. E., B. J. Gage, and D. A. Freund. 1991. Rollover effects in gatekeeper programs: cushioning the impact of restricted choice. Inquiry 28(4):375-384. McCormack, L. A., J. A. Schnaier, A. J. Lee, S. A. Garfinkel, and M. Beaven. 1994. Information, counseling, and assistance programs: Final report. Health Economics Research, Inc.: Waltham, Mass. Miller, R. H., and H. S. Luft. 1994. Managed care plan performance since 1980: A literature analysis. Journal of the American Medical Association 271(19):1512-1519. Minnesota Health Data Institute. 1995. You and your health plan: 1995 statewide survey of Minnesota consumers. Minnesota Health Data Institute: St. Paul, Minn. Network Design Group. 1995. Special report of HMO/CMP Reconsideration Results (January 18, 1995). Health Care Financing Administration: Baltimore, Md. Office of Inspector General. 1992. Medicaid HMO quality assurance standards (March 1, 1992). U.S. Department of Health and Human Services: Washington, D.C.

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--> Office of Inspector General. 1995. Medicare: beneficiary satisfaction. No. OEI-06-91-0073. U.S. Department of Health and Human Services: Washington, D.C. Physician Payment Review Commission. 1995. Annual Report to Congress. Physician Payment Review Commission: Washington, D.C. Robert Wood Johnson Foundation. 1995. Sick people in managed care have difficulty getting services and treatment, new survey reports (June 28, 1995). Robert Wood Johnson Foundation: Princeton, N. J. Rolph, Elizabeth S., P. B. Ginsberg, and S. D. Hosek. 1987. Regulation of Preferred Provider Arrangements. Health Affairs 6(3):32-45. Rossiter, L. F., K. Langwell, T. T. H. Wan, and M. Rivnyak. 1989. Patient satisfaction among elderly enrollees and disenrollees in Medicare health maintenance organizations. Journal of the American Medical Association 262(1):57-63. Saucier, P. 1995. Federal barriers to managed car for dually eligible persons. National Academy for State Health Policy: Portland, Maine. Shaughnessy, P. W., R. E. Schlenker, and D. F. Little. 1994. Home health care outcomes under capitated and fee-for-service payment. Health Care Financing Review 16(1):187-222. Stocker, M. A. 1995. The ticket to better managed care (October 28, 1995). New York Times. U.S. General Accounting Office. 1991. Medigap Insurance: Better consumer protection should result from 1990 changes to Baucus amendment. GAO/HRD-91-49. Government Printing Office: Washington, D.C. U.S. General Accounting Office. 1993a. Health insurance regulation: Wide variation in states' authority, oversight, and resources. GAO/HRD-94-26. Government Printing Office: Washington, D.C. U.S. General Accounting Office. 1993b. Medicaid: States turn to managed care to improve access and control costs. GAO/HRD-93-46. Government Printing Office: Washington, D.C. U.S. General Accounting Office. 1995a. Medicare: Increased HMO oversight could improve quality and access to care. GAO/HEHS-95-155. Government Printing Office: Washington, D.C. U.S. General Accounting Office. 1995b. Health care: Employers and individual consumers want additional information on quality. GAO/HEHS-95-201. Government Printing Office: Washington, D.C. U.S. General Accounting Office. 1995c. Medicare Managed Care: Growing Enrollment Adds Urgency to Fixing HMO Payment Problem. GAO/HEHS-96-21. Government Printing Office: Washington, D.C. Ward, R. A. 1987. HMO satisfaction and understanding among recent Medicare enrollees. Journal of Health and Social Policy 28(4):401-412.