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Copyright 1999 Federal Document Clearing House, Inc.  
Federal Document Clearing House Congressional Testimony

March 24, 1999

SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 3003 words

HEADLINE: TESTIMONY March 24, 1999 RONALD F. POLLACK HOUSE COMMERCE HEALTH AND ENVIRONMENT PATIENT ACCESS TO HEALTH CARE INFORMATION

BODY:
Testimony by Ronald F. Pollack, Executive Director Families USA Foundation Before the Subcommittee on Health and Environment of the Committee on Commerce U.S. House of Representatives March 24,1999 SUMMARY OF TESTIMONY BY RONALD F. POLLACK To ensure that problems between consumers and health plans are resolved early and in the least confrontation manner, it is crucial that independent, external appeals systems be created and that ombudsman programs be established to enable consumers to pursue their appeals rights. The concept of the consumer assistance program is contained in S.6 and H.R.358 and has been more fully developed in S.496-the "Health Care Consumer Assistance Act"introduced in the Senate by Senators Jack Reed and Ron Wyden. We expect that comparable legislation will soon be introduced in the House by Rep. Frank Pallone. Consumer assistance programs help to resolve problems at earlier, less formal stages and obviate the need for more contentious proceedings, such as litigation. Consumers need to have someone to go to for help when they think they are not getting the care they need. A knowledgeable person who can explain the obligations of the patient and the plan may be able to run interference and solve a consumer's problem before a formal grievance is necessary-saving time and money for both plans and consumers. Additionally, providing assistance throughout the appeals process could make the system work more efficiently and thereby lessen the need for further proceedings, such as litigation. Any legislative proposal that seeks to deal with problems early and uses external review mechanisms to achieve that objective should include a provision for the creation of consumer assistance programs. We have ample, high-quality precedents in the states for these programs. An ombudsman program designed to assist consumers cannot, on its own, solve the serious problems patients face today when dealing with their managed care plans. It must be part of an overall consumer protection system, such as the one that would be created by H.R.358. It is a crucial element of patients' rights because it promotes prompt resolution of problems. Mr. Chairman and Members of the Committee: Thank you for the opportunity to testify. Families USA, the national organization for health care consumers, supports comprehensive, nationally enforceable managed care consumer protections. These protections must be designed to ensure that all health plan enrollees receive the care they were promised by their health plans, regardless of where they live or work. To this end, Families USA strongly supports S.6fH.R.358-the Patients' Bill of Rights Act of 1999. Today I would like to highlight the importance of one of these protections for you, the creation of a consumer assistance or "ombudsman" program. The concept of the consumer assistance program is contained in S.6 and H.R.358 and has been more fully developed in S.496 -the "Health Care Consumer Assistance Act'- introduced in the Senate by Senators Reed (DRI) and Wyden (D-OR). We expect that comparable legislation will soon be introduced in the House by Congressman Frank Pallone (D-NJ). Perhaps the most contentious issue facing members of Congress grappling with managed care reform is the ability of consumers to sue their health plans in court and receive a meaningful remedy. Families USA supports this right and believes it is an essential protection. However, no matter whether one supports or opposes the right of consumers to sue HMOs, there should be universal agreement that we want to solve consumer-health plan problems early-thereby reducing the impulse to litigate. That's why the establishment of effective independent, external review systems, coupled with an effective ombudsman program that enables people to pursue their appeal rights, are crucial. It is a way to provide non-litigative, non-lawyer remedies on a timely basis before significant damage is done. Today, there is a growing consensus about the need for a meaningful and effective external appeals system. We believe such an appeals system is crucial. Yet, from the consumer's perspective, a strong external appeals process may be meaningless if sick and frail people are unaware of their appeals rights and are incapable of pursuing them. A recent Henry J. Kaiser Fan-lily Foundation report, entitled External Review of Health Plan Decisions: An Overview of Key Program Features in the States and Medicare, indicates how important consumer assistance programs are in making external appeals systems work. In states where external appeals processes have been in existence, the number of people who availed themselves of these processes is very low-less than 250 cases per year in the largest states and fewer in the smaller states. The report cites studies indicating that these numbers are low because consumers often are unaware of their rights to an external review and, when they are sick, they are unable to pursue their appeals rights. Consumer assistance programs are needed to make the system work properly. I believe that one of the greatest frustrations that consumers experience today is that their problems with their health insurance companies or health plans usually begin when they get sick. Understanding the fine print on one's insurance policy is challenging in the best of times, and to have to do battle with managed care bureaucrats when one is sick or frail is in many instances a war of attrition which the HMO is well positioned to win. Most consumers don't know about the limited rights they do have and, short of turning to expensive legal advice, they have nowhere to turn for help. In addition, as health care systems and products become more and more complex, patients across the country need help from trusted sources as they navigate their health care choices. When people choose their health plans, help is needed to identify information that is available and to sift through such information. People increasingly need assistance to understand complex terms, to decipher their options, and to assess the implications of plan choices on their families' specific health needs. This is why it is critical that Congress creates an ombudsman program. FUNCTIONS OF OMBUDSMAN PROGRAMS I would like to turn now to a discussion of the role and functions of such consumer assistance programs. The structure of these programs is contained in S.496, the Reed-Wyden bill. The establishment of ombudsman or consumer assistance programs would serve the information, counseling and assistance needs of health care consumers in a number of ways. Ombudsman programs would provide consumers with the information they need to make a responsible, informed selection of insurance packages. Once consumers are in a plan, the ombudsman program could advise them of their nights and responsibilities. A toll-free telephone hotline set up and maintained by ombudsman programs would allow consumers throughout states to request information, advice or other health insurance related assistance easily and without cost. Consumer assistance programs would also be charged with producing and disseminating materials to further educate consumers about their rights in the health care system. A key function of an ombudsman program would be to provide direct assistance, including representation, to consumers who are appealing-either internally within a health plan or externally to an agency authorized to handle independent appeals---decisions that deny, terminate, reduce, or refuse to pay for health care services. This assistance and representation does not include involvement in litigation or other court proceedings. In an effort to effectively and efficiently resolve questions, problems and grievances, consumer assistance programs would make referrals to other existing resources, including, as appropriate, employers, health plans, insurance agents, public agencies, health plan regulators and health provider organizations. Finally, ombudsman programs would collect data regarding the inquiries, problems and grievances addressed by the office, as well as the resolution of those problems. This data would be disseminated to all stakeholders in our health system, including employers, health plans, health insurers, regulatory agencies, policyrnakers and the general public. WHY PROGRAM INDEPENDENCE IS IMPORTANT To work effectively and with the full trust of consumers, ombudsman programs need to be independent of health plans, providers of care, payers of care and state regulators. This is crucial so that ombudsman programs are, and are perceived to be, totally responsive to the needs of consumers and have no conflicts of interest. Thus, ombudsman programs should be independent entities, not connected to health plans or state agencies. A 1995 study of Long-Term Care Ombudsman Programs conducted by the Institute of Medicine concluded that ombudsman programs should be contracted out to independent nonprofit agencies in order to ensure program effectiveness. The Institute of Medicine found that this independence elicits confidence in consumers and makes them feel that the advice and help being provided is in their best interest. In order for consumer assistance programs to perform successfully, they must be perceived by consumers as having no interests other than informing, advising and assisting the public. It is imperative that these programs -am the confidence of consumers so that they will feel comfortable seeking assistance and be assured that this assistance will be provided C impartially. Programs associated with a health plan provide the least independence in that they are staffed by health plan employees, the very entity that consumers may have complaints against. While ombudsman programs housed within a state agency offer independence from health plans, the staff of such agencies often have related, sometimes even conflicting, agendas as they regulate health plans. Thus, a real or an apparent conflict of interest may arise if state agencies operate ombudsman programs. HOW TO ENSURE INDEPENDENCE One process of ensuring the independence of ombudsman programs is to have states, using funds provided by the federal government, contract with non-profit organizations to serve ID as ombudsmen. Grants from the Department of Health and Human Services (HHS) would enable states to enter into such contracts with eligible organizations. In requesting funds from HHS, a state should be required to submit an application containing the state's plan for soliciting proposals from eligible organizations, as well as the method the state would use to ensure that organizations provide high-quality assistance services. Grant amounts would be determined based on the ratio of the number of individuals in the state with health insurance coverage to the total number of individuals with health insurance coverage in all states. Eligibility of the non-profit organizations should be based on a number of factors, including the organization's demonstrated ability to meet the needs of health care consumers, particularly those most in need of assistance. The organizations should prepare and submit a proposal to the state in which they outline their technical, organizational, and professional capacity to oversee and run the ombudsman program. Eligible organizations should clearly demonstrate their independence from health insurance plans, providers, payers and regulators of care, eliminating any questions of conflict of interest, and they should substantiate their ability to assist and advise consumers throughout the state, regardless of the source of their coverage. HOW WE KNOW OMBUDSMAN PROGRAMS WORK There are a number of different health ombudsman-type programs that serve as models for the type of ombudsman programs that should be created in patients' rights legislation. Of the various types of health-related ombudsman programs in existence today, the oldest, largest and best known is the Lon- Jerm Care Ombudsman Program. Created more than two decades ago under the Older Americans Act as a result of well-publicized concerns about institutional care problems, states established ombudsman programs to serve people in long-term care facilities. These ombudsman programs are designed to advocate for nursing home residents, to help solve problems between patient/residents and institutional care facilities, and to bring systemic problems to the attention of state administrators and regulators. Long- Tenn Care Ombudsman Programs exist in all 50 states, the District of Columbia and Puerto Rico. A myriad of different health-related and specialized ombudsman programs also exist around the country. The most significant types of these programs include the so-called Information, Counseling and Assistance (ICA) programs that were funded under the Omnibus Budget Reconciliation Act of 1990 to serve Medicare beneficiaries. These programs differ significantly from state to state and are also heavily dependent on the use of volunteers. There are also a significant number of state and/or local-based ombudsman programs serving low-income people in the Medicaid program, especially those in the states of California, Michigan, Minnesota, Oregon, Tennessee, Texas and Wisconsin. More recently, a number of ombudsman programs have been created that are designed to serve the health care information, education, counseling, referral and assistance needs of the public and patients irrespective of the source of payment for their care. Three states-Florida, Vermont, and Virginia-recently enacted legislation for the purpose of establishing ombudsman program services. Vermont enacted legislation requiring state officials to contract with a nonprofit organization to handle ombudsman functions. The ombudsman program responsibilities under the Vermont legislation include assisting people with plan selections by providing information, referrals and assistance about different health plans; helping plan enrollees understand their rights and responsibilities; identifying, investigating and resolving complaints on behalf of patients; and assisting patients with the filing and pursuing of internal and external administrative appeals concerning service delays and denials. Since its opening on January 4 of this year, the Vermont Office of the Health Care Ombudsman has received nearly 300 calls from consumers within the state. The majority of the calls have been from consumers seeking assistance dealing with commercial insurance purchased through employers, individual plans, or Medicaid managed care. As of mid-February, 40 percent of the consumer inquiries received by the office have required counselors to take some kind of action on behalf of the consumer, such as calling the client's insurance company or health plan, assisting consumers in preparation for plan appeals or air hearings, and helping consumers draft letters. Of the inquiries received, only 23 percent could be answered during the initial phone call to the office. Florida's ombudsman program is a volunteer-based entity that consists of local ombudsman committees that serve consumers in their specific areas. Consumers are referred to their local ombudsman committees by the state's Agency for Health Care Administration. The state of Virginia enacted legislation last month that creates a state-based managed care ombudsman to assist policyholders with appeals to health insurance companies. It is financed by a premium assessment on health plans. There has been tremendous support for the establishment of ombudsman programs across the country. The President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry made several references to the need and importance of creating ombudsman programs. Several HMO executives-including the chief executive officers of Kaiser Permanente, HIP Health Plans, and the Group Health Cooperative of Puget Sound joined to-ether in a statement indicating that patients "should have access to an independent, external nonprofit ombudsman program" and that health plans should cooperate with those programs. Approximately one dozen states have bills pending in their legislatures to create such ombudsman programs. Clearly, this is a mechanism that is receiving growing recognition as an effective way of helping consumers at an early time and in a non-confrontational manner. CONCLUSION Consumer assistance programs help to resolve problems at earlier, less formal stages and obviate the need for more contentious proceedings, such as litigation. Consumers need to have C, someone to for help when they think they are not getting the care they need knowledgeable person who can explain the obligations of the patient and the plan may be able to run interference and solve a consumer's problem before a formal grievance is necessary-saving time and money for both plans and consumers. Additionally, providing assistance throughout the appeals process could make the system work more efficiently and thereby lessen the need for further proceedings, such as litigation. As a result, any legislative proposal that seeks to deal with problems early and uses external review mechanisms to achieve that objective should include a provision for the creation of consumer assistance programs. We have ample, high-quality precedents in the states for these programs, and we should implement them as part of a patients' rights system. I would like to close by stating the obvious. A consumer assistance program designed to assist consumers cannot, on its own. solve the serious problems patients face today when dealing with their managed care plans. It must be part of an overall consumer protection system, such as the one that would be created by H.R.358-the Patient's Bill of Rights Act of 1999. As part of such a system, consumer assistance programs can help ensure that patients get the care they need, when they need it.

LOAD-DATE: April 6, 1999




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