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Los Angeles Times

Rights on HMOs little used;

Survey finds patients and doctors are unaware of a state law granting independent appeals of insurer decisions.

by Daniel Costello, Special to The Times
May 5, 2003

Two years ago, California created an independent review process to give patients and their families a place to resolve disputes with their health insurers. But most Californians remain unaware of their rights to appeal medical coverage decisions, and many of those who have used the review program believe it is skewed in favor of their health plans, according to a study released last week.

"Many consumers still don't understand that the program is objective and free from health plan influence," says Margaret Laws, director of policy and planning at the California HealthCare Foundation, the Oakland-based philanthropic group that sponsored the study.

The independent medical review programs in California and many other states grew out of a public backlash against HMOs and frustration that patients had few places to turn if insurers deemed a medical procedure unnecessary. The law, which went into effect in 2001, was announced with much fanfare and predictions that a significant number of the state's 18 million managed-care consumers who disagreed with a denied claim would file for an independent review. But the number of requests has been anemic, totaling just 1,700 cases since 2001. While the study did include recommendations to increase awareness of the program, some experts predicted last week that it could be years before the public embraces the program, if at all.

"It's been a slow start. We need to do a better job of getting the message out and letting patients know that they now are in the driver's seat if they have a problem" with their insurer, says Steven Fisher, deputy director of the California Department of Managed Health Care, the state agency that regulates HMOs and oversees the review program.

Patients can request an independent review only after first having their complaints heard by their health plan itself. If they are dissatisfied with the insurer's decision, they can contact the DMHC and ask for further review. The cases are reviewed by an independent group of doctors not associated with the health-care plan who contract with the DMHC. There is no fee for filing, nor is there a minimum cost for a procedure to be considered.

Consumer groups contend that many patients never pursue their complaints past the health plan's internal review because the process can be cumbersome, confusing and frustrating. Insurers often have teams of doctors and lawyers on staff and may require a large amount of paperwork before conducting a review. Some advocates say that a significant number of consumers just give up. "The internal reviews are complicated and exhausting. Unless someone has help sorting through the process, the insurer has the upper hand. It's all the worse for the poorest patients and non-English-speaking patients, who often get overwhelmed," says Kevin Simpson, executive director of the Health Assistance Partnership, a Washington, D.C.-based center for consumer health assistance programs.

According to the study, which was compiled from interviews with 154 of the 610 people who requested reviews in 2001, two-thirds of all consumers and 75% of doctors were unaware of the program prior to their involvement with it. Seven health plans, representing 94% of the independent review requests, participated in the study. The independent reviewers ruled in favor of the consumer, overturning health plan denials of services, in 36% of the cases. One insurer, Aetna US Healthcare of California, declined to participate.

The DMHC's Fisher said the agency handles many complaints that never make it to external review. It has fielded 300,000 complaints during the last three years, from problems involving billing errors to delays in getting a doctor's appointment. The department has a 24-hour hotline, (888) 466-2219, and a Web site,, outlining the options available to consumers who come across problems with their providers.

The foundation's report included a set of recommendations, including the suggestion that the DMHC create a "how to" guide about the program to be distributed to doctor's offices and employers' human resource departments. It also suggests setting up a campaign to explain the program to doctors, as well as creating a way to verify that the external review committee's decision is implemented by health plans in a timely manner.