A few days ago, HHS Secretary Kathleen Sebelius came forth with one more goodie from the new reform law: the right to appeal a coverage decision made by a health plan. It’s yet another in a series of positive talking points to soften up the electorate before they realize that the punitive parts of the law are yet to come—the tax penalty for not buying insurance, and potentially huge out-of-pocket costs for required coverage not subsidized by the government. Said the Secretary:
The Affordable Care Act puts patients in control of their healthcare. Today, if your health plan tells you it won’t cover a treatment your doctor recommends…you may not know where to turn. The Affordable Care Act provisions announced today will provide patients with new important new rights and resources that will help ensure they get the care they need.
The media did what presumably the administration had hoped: they wrote stories following the White House script (PDF), and passed along the notion that somehow letting people appeal adverse coverage decisions by their health plan would give them control of their health care, as if they have all the choice in the world. In reality, all but five states have had an external appeals process for years, an outgrowth of the managed care backlash of the 1990s.
Consumers must first appeal a denial of service to the HMO; then, if they are turned down, they can appeal to an independent external review panel. In most states, the panels have worked pretty well, although a study done in 2004 by Consumers Union and the Kaiser Family Foundation found that consumers too often made mistakes—like not appealing first to their health plan, failing to follow the time limits, and not providing enough documentation for reviewers to judge their case. Generally, they must prove why a treatment is medically necessary. About half the time consumers win; half the time insurers do.
As one state insurance department official told me: “The new regulations simply preserve the status quo and get someone else enforce them.” In other words, the feds—not the states—will make sure the appeals mechanisms run smoothly and conform to some national standards. They also force the missing states into the fold, and give appeal rights to workers in self-insured plans—the kind where employers bear the risk and hire an insurer to pay claims.
But unless you live in one of these states—according to Kaiser, North and South Dakota, Nebraska, Alabama, and Mississippi—or belong to a self-insured plan, the new regs probably won’t mean very much. And if you are in a “grandfathered plan,” that is, one that existed before the law passed in late March, you won’t be able to appeal any decision period. In fact, the administration says it expects consumers to file only 2600 appeals in 2011.
The press coverage was disappointing, given that a track record for external appeals exists. Most reporters didn’t offer context or make the calls necessary to give the full picture of what Madame Secretary was really offering.
Even a story by Kaiser Health News did not refer to the substantial and credible work done by its parent organization, the Kaiser Family Foundation. I know the news service says it’s independent, but here was a time to reach back into the files. Instead of digging into how consumers fared when they filed appeals, it relied on the White House and reported that “On average, about 40 percent of denials are reversed on external appeal, according to commentary that was issued along with the regulations today.”
So 60 percent are not? Why? Reasons why patients are successful or not would have been far more interesting and useful than the weak anecdote stuffed into the story about a man who found the appeals process “exhausting.” Duh! Any kind of legal proceeding usually is, and the new rules won’t change that.
Several news outlets relied on flimsy quotes from consumer advocates to dress up their stories. The advocates who have their own agendas which include presenting health reform in a positive way did just that. Many reporters turned to Families USA and the ever-quotable Ron Pollock, who told USA Today that the rules “will enable people to deal with problems that in the past have really caused dire consequences.” He told The Wall Street Journal that “states are all over the lot in terms of what the right to an external review means. So this is very meaningful.” The executive VP for the AARP, Nancy LeaMond, issued a statement picked up by The Hill, which said the changes will help “anyone who has had to go it alone against an insurance company.”
It would have been better had the media left out the empty quotes and concentrated on what was a glaring omission in most of their stories—why people file grievances in the first place. The White House fact sheet says consumers can use the review procedure if an insurer has rescinded their policies. But if rescissions will be outlawed, what’s the big deal? A major reason people file grievances is over the question of medical necessity—whether a proposed treatment is really therapeutic, and whether it’s covered by the policy. Under current state arrangements, disputes must usually involve medical necessity, and not every state allows appeals for experimental treatments. Good stories might have looked at what kinds of treatments are denied, and why, and explored why policies may or may not cover them—in other words, might have given consumers some real guidance.
What rights do the new regulations give consumers in these matters? The language in the regulations of the National Association of Insurance Commissioners which sets the new standards is fuzzy says a state insurance official. It does not provide a clear definition of what is experimental. “I am not seeing a definition of medically necessity either,” he told me. “The federal regulations are all about process, not substance.” The substance of a dispute is governed by the health plan’s requirements for medical necessity, appropriateness, and effectiveness of a covered benefit.
So it seems that there is far more to the story than the media or the White House has told. Consumers may have the same problems getting redress they’ve always had, and making sure they get a clear reason for the denial (which the rules provide) is not the same. Disputes over medical necessity will no doubt continue. Local reporters, not Washington types, should take it from here.