One mechanism that can be used to correct, if not prevent, consumer dissatisfaction is a well-functioning dispute resolution system. Two types of appeals processes are available to Medicare HMO enrollees: one for disputes involving coverage of services within the basic Medicare HMO benefits package and one for other grievances.
Enrollee complaints are processed through Medicare's traditional five-step dispute resolution process if they involve (1) an HMO's refusal to pay for emergency or urgently needed services, (2) services rendered by out-of-plan providers that the enrollee believes are covered by Medicare and for which the enrollee believes the HMO should pay, and (3) an HMO's refusal to provide services an enrollee believes that Medicare covers and the that HMO should furnish (42 C.F.R. Section 417.606-417.638).
If an enrollee requests a service or payment for a service in one of these categories and the HMO denies the request, it must notify the enrollee within 60 days of receiving the request (24 days if the claim is complete [HCFA CMP/HMO Manual Section 2403]), specify the reasons for the determination, and notify the enrollee of the right to request reconsideration of the decision. Because some plans had not provided timely responses to enrollee requests, regulations issued in November 1994 permit a beneficiary to appeal without a formal written denial notice from the HMO. The enrollee or a representative may request reconsideration from the HMO within 60 days of the initial determination and must be allowed to present evidence in person or in writing. The reconsideration must be conducted by a person not involved in the initial determination. If the HMO recommends an action that is adverse to the enrollee's interest, it must forward the appeal to HCFA for reconsideration. HCFA has contracted with a private firm, the Network Design Group (NDG), to process these requests. Notice of the reconsidered determination must be mailed to all parties.