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:

1. 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.

 
2. 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.

 
3. 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.

 
4. 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 assistance services.

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.

10/15/98