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Consumer Protections

The methods used to compensate managed care providers can encourage them to provide less, rather than more, care to plan participants. Public disclosure of financial arrangements with doctors as well as information on utilization review standards and decisions, grievance or appeals procedures, and limitations on coverage are of vital importance. Consumer oversight boards, that include health care workers, can be a vital part of protecting patients’ rights.

Enrollment Procedures

Q. What information is provided to employees during the open enrollment period?

A. At a minimum, the plan should provide information on:

  • the panel of physicians and their credentials;
  • cost-sharing requirements, including deductibles, copayments and total maximum out-of-pocket costs;
  • benefits provided;
  • limitations and exclusion of services, including pre-existing condition limitations;
  • limitations on dollar coverage or the number of days or visits for specific illnesses;
  • limitations on procedures covered;
  • utilization decision-making procedures;
  • the grievance process;
  • waiting times;
  • quality measures;
  • reasons people leave the plan;
  • consumer rights and responsibilities;
  • procedures for emergency and after-hours treatment;
  • procedures for referrals to specialists;
  • whether services provided by non-participating doctors are covered, and at what level; and
  • restrictions on prescription drug coverage.

Most plans cover only medically necessary services. Plans will generally refuse to cover experimental treatments. Ask the plan to define these terms.

Physician Contracts

Q. Does the plan’s contract with physicians prohibit them from discussing all treatment options with patients regardless of cost or coverage?

A. Some plans prohibit doctors from giving patients information on more expensive treatment options or sources of care (i.e., non-participating facilities with better outcomes history), or options not covered by the plan, prior to attempting to cure the illness or injury with less expensive treatments. This may be true even if the doctor feels that the more expensive or uncovered treatment is advisable. Ask if the plan has any type of formal or informal “gag clause” which would prohibit physicians from discussing all possible treatment options, even those that are costly or not covered by the plan. Some states have passed laws prohibiting gag clauses and the federal government prohibits gag clauses in Medicare and Medicaid contracts.

Q. How are physicians paid? Are there any incentives or penalties for staying within certain cost or service levels?

A. Currently, about 60 percent of managed care plans pay physicians on a capitation basis. Some pay a bonus to those who keep costs below a certain level, withhold some funds and pay them out later for keeping costs low, or apply penalties to those who exceed specified costs. Many plans restrict physicians from disclosing incentives to limit patient care. Some states prohibit bonuses and/or withholds. Medicare prohibits these practices if linked to a specific individual.

Q. Do any doctors in the plan have a financial interest in facilities to which they refer patients?

A. Studies show that physicians who own labs perform more tests than physicians who don’t. In a true HMO, where doctors are paid on a capitated basis, it is unlikely that they will order unnecessary lab work. However, there may be reason for concern if a PPO or POS doctor sends patients to a lab in which he or she has a financial interest, and then is paid on a per-service basis.

Grievance Procedures

Q. Does the plan provide written explanations of any claim denials within a specified period of time?

A. The plan should provide a complete written explanation of denials at the time the claim is denied.

Q. Does the plan have an established grievance or appeals procedure which is clearly communicated to enrollees? How long does the plan take, on average, to answer grievances?

A. Ask for statistics on the number of complaints per 1,000 members and how they are resolved, including average time for resolution.

Q. Does the plan establish shorter time frames for grievances or appeals in urgent cases?

A. Some states require plans to respond to grievances within one to three days where denial of care could lead to serious harm. Others require responses to all grievances within specified time periods, and some have no standards at all.

Q. Does the plan provide for review by an outside arbitrator or entity with medical training? If so, is the outside decision advisory or binding? How are reviewers selected?

A. If an outside arbitrator or entity is used, he or she should be an impartial party selected jointly by the plan and a representative of the plan participants.

Financial Disclosure

Q. Is the plan financially healthy?

A. The NCQA (see Appendix) has developed measures of financial performance designed to evaluate plan solvency and to determine whether there are pressures to reduce services. The measures allow for a uniform comparison of plans’ fiscal health.

Q. What assurances does the plan make that services will continue to be provided in the event of bankruptcy, re-organization or merger?

A. The plan should guarantee payment of all hospital and medical bills for any patient until the course of treatment is complete.

Confidentiality/Privacy

Americans have long assumed that only their health care providers have access to their medical records. While this once may have been true, now individual medical records are transmitted through large electronic networks, potentially allowing unauthorized persons access to confidential patient information. Although medical databases can be valuable in diagnosing and monitoring disease and illness, unrestricted availability of individual patient information can be harmful to health care consumers. The possibilities of abuse will likely increase as computerized medical records and genetic testing become more common. Confidentiality issues that should be addressed include the following:

Q. What precautions does the plan take to maintain confidentiality of patient visits and records?

A.  The plan should limit access to confidential patient information to essential persons only, and precautions to safeguard electronically transmitted information should be taken. Employees who have access to information should be subject to strict policies regarding the maintenance of confidentiality and provided with training on the policies. Ask the plan to provide written disclosure of confidentiality procedures for their medical records and the conditions under which records are shared.

Q. Are there times when it is appropriate for a plan to provide access to confidential information to outside parties?

A. In most cases, the plan should obtain written consent prior to releasing individually identifiable medical information. However, in some cases, such information must be available for public health reporting, investigation of health care fraud and, in limited situations, medical research for which anonymous records are not sufficient. The plan should have a system in place for tracking who has had access to individual records, and that list should be available to patients and their families.

Q. What about transmitting prescriptions electronically? Does the plan do this and, if so, what precautions are taken to maintain confidentiality?

A. Electronic prescriptions can reduce errors in prescribing and save time and money. However, the plans and its affiliated pharmacies need to take precautions similar to those discussed above.

Q. What about employers that self insure their health plans? Do they have access to confidential, individual information?

A. Self-insured employers may have access to individual medical and pharmacy records. It is legitimate for an employer to use aggregate medical utilization data in making decisions concerning health care cost containment provisions. However, the union should fight for safeguards against employer use of medical information for non-health care purposes, such as decisions over hiring, firing and promotions. In some cases, employer consideration of such information is illegal.

Q. What about genetic testing? What are the risks and what, if any, protections are available?

A. Increasingly, tests that identify an individual’s predisposition to certain diseases are being developed. The results of these tests can sometimes be used in preventive treatment decision making. Unfortunately, employers and insurers may also use this information to identify individuals with potentially expensive diseases or illnesses. As with other confidential information, ask the plan to identify who has access to genetic testing information.

Q. Have any laws been passed concerning privacy of medical records?

A. Various state laws restricting medical privacy have been passed. Currently, there are no federal laws specifically addressing the confidentiality of health care information. However, the Health Insurance Portability and Accountability Act (HIPAA) mandated Congress to address medical confidentiality by August 1999. It is likely that a federal privacy law that will limit disclosure of medical information and provide for legal remedies in the event of abuse will be passed in the near future. The secretary of the Department of Health and Human Services (DHHS) has drafted guidelines and submitted them to Congress. If congressional action does not occur by the deadline established by HIPAA, the DHHS regulations will prevail.

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