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