Medicare Managed Care Appeal Process for Denials of Care:

A Comparison With Recommendations From the President's Quality Commission

HEHS-98-155R: Published: May 8, 1998. Publicly Released: Jun 8, 1998.

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William J. Scanlon
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Pursuant to a congressional request, GAO reviewed information on Medicare managed care appeals to help Congress consider legislation on national appeal rights for private-sector health care consumers, focusing on: (1) comparing the President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry's recommended appeal process with that required by the Medicare program; and (2) describing the appeals reviewed by Medicare's external appeals contractor, the Center for Health Dispute Resolution (CHDR).

GAO noted that: (1) the Quality Commission recommended an appeals process that is very similar in structure to the process used by the Medicare managed care program in that both require that individuals receive timely notification of appeal rights and appeal decisions and both require an expedient process for certain kinds of cases for internal and external appeals; (2) virtually all internal appeals that are not completely favorable to the beneficiary are automatically subject to Medicare's external review process, while the Quality Commission restricts external review to appeals that involve experimental issues, circumstances that jeopardize the health or life of the patient, or services that exceed a significant financial threshold that has not been specified; (3) the effect of these differences on the number and types of appeals seen in the Quality Commission's appeal process would depend on how its recommendations are implemented; (4) while appeals from fewer than three-tenths of one percent of Medicare managed care enrollees actually reach the external review process, GAO's review of CHDR appeals indicates that it provides an important protection for beneficiaries at a modest cost to the program; (5) the majority of CHDR's decisions uphold a managed care plan's denial of a service; (6) in about two-thirds of the overturned cases, CHDR found that the plans had made an inappropriate clinical decision and that the care involved in the appeal was medically necessary and met Medicare's clinical coverage criteria; (7) because of differences between Medicare enrollees and the commercially insured, Medicare's experience with external appeals may not apply to this population; (8) while Medicare enrollees can disenroll in any given month and therefore may choose to disenroll rather than appeal a dispute with their plan, many commercially insured managed care enrollees may not have this option; (9) the commercially insured population may also have fewer appeals per capita; and (10) these differences make it difficult to predict the volume or type of appeals that would be seen in the external appeals process for the commercially insured based on Medicare's experience.

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