Most Medicare HMO enrollees report having few problems accessing care—in a 1996 survey, 6 percent said that they did not get a desired referral to a specialist. People with chronic illnesses, disabilities, or functional impairments were, however, more likely to report problems of access (Gold et al., 1997). Medicare beneficiaries enrolled in HMOs are generally satisfied with their plans, and those whose cancer is diagnosed after they enroll are no more likely than others to disenroll and opt for fee-for-service care (Riley et al., 1996).

When patients (or their physicians) disagree with a plan's coverage decision, a resolution procedure is available, but the timeliness and processes (e.g., option of external review) may vary greatly from plan to plan. Licensed health plans are subject to numerous state and federal laws, and many also comply with standards of private accrediting bodies (e.g., National Committee for Quality Assurance, Joint Commission on Accreditation of Healthcare Organizations) (see Box 2.3) (President's Advisory Commission, 1998).

BOX 2.3 Selected Federal and State Regulations Regarding Resolution of Complaints or Appeals*


Under the Medicare fee-for-service system, fiscal intermediaries and carriers must provide a two-step internal review and notification of their final decision before a beneficiary is entitled to seek reconsideration from the Social Security Administration (SSA) and the Health Care Financing Administration (HCFA). HMOs that participate in Medicare are required to provide meaningful internal procedures for resolving complaints about the quality of care, untimely provision of care, or improper demeanor of health care personnel. HMO decisions to deny coverage for certain treatments, referral outside a plan, or reimbursement for emergency or out-of-area care are subject to an external review and administrative appeal. HCFA has contracted with a private organization, the Center for Health Dispute Resolution, to perform these reconsiderations. After external review, a Medicare beneficiary dissatisfied with the results of the review has a right to SSA review.


The federal Medicaid statute requires state agencies to provide beneficiaries with a fair hearing and an administrative appeal when their eligibility or requests for services are denied or not acted upon within reasonable time. These determinations can be challenged in state court under state administrative procedure acts or in federal court. In addition, HMOs that contract to serve Medicaid beneficiaries must establish an internal complaint procedure that will resolve disputes promptly. These internal procedures are subject to review and approval by the state.


A "complaint" is any expression of dissatisfaction to a health plan, provider, or facility by a consumer made orally or in writing, for example, concerning waiting times, the demeanor of health care personnel, respect paid to consumers, or provision of services. An "appeal" is a consumer's request for a health plan, facility, provider, or other body to change an initial decision.

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