The Rising Number of Complaints
Against HMOs, and What to Make of It
By Mary Anderlik
Health Law & Policy Institute
Several recent news reports note a sharp
increase in the number of complaints registered against health maintenance
organizations (HMOs). To make sense of the reports, it is important to
understand the different kinds of information that may be released with
the heading "consumer complaints." That information includes:
In addition to state regulators, consumers
have the option of turning to special regional or national hotlines to
register a complaint or request assistance. Examples of such hotlines include
the Health Rights Hotline, maintained by the Center for Health Care Rights
for consumers in the Sacramento area, and the National HMO Appeals Hotline
(888-HMO-9050) maintained by the Medicare Rights Center to assist Medicare
beneficiaries. Both periodically release information on the nature and
frequency of calls.
Formal complaints against HMOs and
other health insurers filed with state regulators. In many states, both
patients and providers can file complaints with the state. Insurance regulators
in Connecticut, Illinois, Maryland, New York, Ohio, and Texas have reported
increases of over 50% over the last 1-3 years. In June of 1998, the Texas
Department of Insurance became the first state regulatory agency to make
information from its database of complaints available online. Information
can be accessed through the department’s web site at www.tdi.state.tx.us.
The web site includes tables showing the number of "justified complaints"
per 10,000 by HMO.
Consumer requests for assistance from
state regulators. A request for assistance is not equivalent to a complaint,
since the reason for the request may be confusion rather than dissatisfaction.
For example, in September the New Hampshire Department of Insurance projected
that it would receive 9,360 calls concerning manage care for 1998, a 44%
increase over 1997. However, an analyst with the department attributed
much of the change to an increase in managed care enrollment in the state.
He noted that many callers are simply seeking the name of someone to call
within their HMO.
Patient requests for independent review
of coverage denials. The laws of a number of states, including Texas, make
this service available to consumers. State regulators track the number
of requests and outcomes. In August, the Texas Department of Insurance
reported that the total number of requests since introduction of the service
in 1997 was lower than expected, but that the number of requests per week
had increased from 2 to 25.
Patient complaints registered with HMOs.
Many states require HMOs to report this information to regulators on an
annual basis. For example, records made publicly available by the Indiana
Department of Insurance showed 5,500 complaints registered with HMOs in
1997 (only 258 formal complaints against HMOs were filed with the state
for the same period). The numbers of complaints varied widely among HMOs.
Some suggested that the variation was due to different definitions of complaint,
with some counting only written complaints while others counted every communication
of dissatisfaction, including calls about rude receptionists.
An increase in complaints—in any category—does
not necessarily reflect a worsening in the quality or availability of care
in HMOs nationwide. In states where managed care enrollment has increased
dramatically, such as New Hampshire, the increase in complaints is predictable
if not welcome. In more mature managed care markets, regulators attribute
much of the change to greater consumer willingness to challenge unfavorable
decisions by HMOs and efforts by regulators and others to publicize consumer
Many regulators are nonetheless troubled
by a shift in the kinds of disputes brought to their attention. In the
past, disputes typically concerned who would pay for services already delivered.
Now, more and more disputes concern whether a service will be delivered.
An HMO or other managed care company’s denial of coverage often translates
into a denial of the service, since patients usually lack the resources
to pay out-of-pocket. The same shift has troubled judges, even (or perhaps
especially) those judges who feel that the law compels them to rule against
a patient. Complaints that relate to confusion over the workings of managed
care are likely to diminish over time. Complaints that relate to unproven
treatments and "last chance therapies" are likely to increase.