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CHAPTER VIII

Consumer Protections

# Financial arrangements that do not transfer excessive levels of risk or create other deterrents to medically necessary care; and

# Quality assurance systems based on carefully developed practice guidelines and procedures for external review and review of complaints and grievances.

This chapter focuses on additional matters pertaining to the protection of the interests of consumers and their families in publicly funded managed behavioral health care plans:

# Managed care consumers’ rights with respect to managed care plan enrollment, confidentiality, involvement in treatment planning, and other areas; and

# MCOs’ procedures for handling consumers’ complaints, grievances, and appeals.

In publicly funded programs, consumers with mental and addictive disorders and their families are typically low-income people who often lack resources such as reliable transportation, child care, and stable living arrangements. Consumers in publicly funded programs include individuals who are homeless, adults with severe mental illness, caregivers of children with serious emotional disturbances, and individuals with long-term substance use disorders. Some of them have severe impairments, so obtaining access to services and advocating on their own behalf is particularly difficult or virtually impossible. As many MCOs lack experience with consumers in publicly funded programs, it is up to the purchaser of managed care services to consider the interests of all of these consumers in drafting requests for proposals (RFPs) and contracts.

A. Managed Care Consumers’ Rights

Past practices by MCOs that ignored or minimized consumers’ rights sometimes resulted in inadequate or dangerous care. This led the President’s Commission on Model State Drug Laws in 1993 to develop the Model Managed Care Consumer Protection Act, which sets a standard that “allows responsible managed care firms to continue to carry out their functions, but creates much-needed consumer protections [against] those firms whose policies or fiscal incentives can lead to less than adequate care” (CSAT, 1995c). In addition, many advocacy and professional organizations have established comprehensive “bills of rights” linked to the full spectrum of services to which the consumers of managed behavioral health care and their families may be entitled. Current Medicaid law provides Medicaid enrollees in managed care plans with “a wide variety of [rights], many of which are not enjoyed by most commercial enrollees” (Fried, 1996).

The discussion below focuses on several rights of consumers of managed substance abuse and mental health services that are often touched upon in consumers’ bills of rights:

• The right to be given choices and protections in the managed care plans;

• The right to confidentiality;
• The right to be involved in treatment planning;
• The right to be protected from disenrollment by a health plan; and
• The right to representation.

The section closes with a discussion of involuntary commitment and court-ordered treatment.

Two examples of consumers’ bills of rights—one developed by the Bazelon Center for Mental Health Law and one developed by the American Managed Behavioral Healthcare Association (AMBHA)—are shown in Exhibits VIII-1 and VIII-2 below. The general themes of these documents are that the basic rights of consumers (and, by implication, of consumers’ families) are to be protected, that consumers and families have an easy way to file grievances with an MCO, and that a system of appeals ensures speedy resolution of problems (Bazelon Center for Mental Health Law, 1995).

Both the Bazelon Center’s bill of rights and AMBHA’s bill of rights assert that consumers and families have the right to choose health plans, as well as to choose the services, service settings, practitioners, and providers within a health plan. Disregarding consumer preferences in these matters can adversely affect consumers’ adherence to a treatment plan, resulting in poorer outcomes.

MCOs routinely make decisions that have an impact on consumers’ choices. MCOs that arbitrarily assign consumers and families to a practitioner or practitioners are denying consumers and families the right to have as much choice as possible within the system.

The size of an MCO’s provider panels, including group practices, may affect the number of options for consumers and families from which to select (IOM, 1996). Some States have enacted “any willing provider” laws that require MCOs to contract with any provider willing to meet the terms and conditions of the MCO’s contract (AMBHA, 1997), thus giving consumers a greater choice among providers and services. It should be noted, however, that requiring MCOs to subcontract with any willing provider does not necessarily mean that every provider the MCO contracts with will receive referrals from the MCO.

Although the need for confidentiality is not an issue unique to managed care arrangements, consumers of substance abuse and mental health treatment services and their families are especially vulnerable to being stigmatized by information that may be disclosed when they seek authorization for treatment or are referred from one practitioner or provider to another. On the other hand, the use of multiple practitioners (and prescription drugs) by consumers without an integrated service plan may be dangerous to the consumer and not cost effective. The right of consumers and families to confidentiality often conflicts with the MCO’s need to access information about the consumer, through utilization and case management activities designed to ensure appropriate and coordinated care.

Purchasers must be aware of all Federal and State laws and regulations affecting confidentiality. Federal substance abuse treatment regulations (42 C.F.R. Part 2) require that providers of substance abuse services maintain confidentiality of consumers and families, prohibit unauthorized disclosure of consumer-specific information, and limit ways in which disclosure can occur. These regulations protect the privacy of individuals entering treatment and help ensure that information about participation in treatment, even the fact of participation, cannot be disclosed without consent (IOM, 1996).

Whereas regulations governing substance abuse treatment are based on Federal law, mental health confidentiality regulations are based on State law, and they may be quite different from the laws governing substance abuse treatment. Furthermore, the degree of confidentiality of data from one jurisdiction to another may also be affected by a number of other relevant laws, such as HIV confidentiality statutes, Aduty to warn@ court decisions and statutes, abuse, and neglect reporting and decisions about the special status of provider-patient communications (privilege decisions).

Confidentiality in a managed care setting can be particularly problematic when MCOs ask for extensive disclosure of a consumer’s records. Even though the Federal confidentiality regulations state that disclosures must be limited to only that information needed to accomplish the disclosure’s purpose, MCOs sometimes ask for years’ worth of records. Many MCOs will not approve care or reimburse for services delivered unless they obtain those records. Therefore, the purchaser may wish to stipulate in the contract the extent of information an MCO is allowed to ask a provider to disclose.

A Arecovery-oriented@ philosophy views adult consumers and their caregiving families as partners with professionals in planning for treatment and service delivery, as long as the consumer consents to family involvement. Many believe that involving consumers and their families will generally facilitate consumer decisionmaking, help shape viable service plans, and lead to better consumer cooperation. As a partner in treatment, a consumer may face the difficult decision of refusing treatment if he or she feels that the recommended treatment is inappropriate.

In reviewing RFPs for managed behavioral health care, NAMI found that most RFPs did not specifically stipulate participation by either the consumer or the family in treatment planning or service delivery. Three States that did stipulate such participation included the following provisions (Huskamp, 1996):

Consumers of behavioral health services may be difficult to treat, and appropriate treatments may be very expensive, creating incentives for MCOs to disenroll them. Disenrollment from a managed care plan can cause problems for consumers if there is only one plan (that is, if re-enrollment in another plan is not an available choice) or if there is no default to fee-for-service reimbursement. Rosenbaum and her associates found numerous examples of State Medicaid managed care contracts in which disenrollment for noncompliance with the treatment plan was permitted (Rosenbaum, et al., 1997). This contract provision was particularly common for health plans that integrated general and behavioral health care.

If the purchaser of managed care services decides to allow the MCO to disenroll clients, the process should include multiple, well-monitored steps. Conversely, the process allowing consumers to voluntarily disenroll from a health plan should be simple and easy.

Purchasers may want to ensure that consumers and families retain the right to representation, whether by an independent organization or a community advocate, to help them understand their rights and benefits. The Protection and Advocacy System, for example, is a federally funded, nationwide initiative to provide legal advocacy to persons with disabilities. Many public health agencies also provide community representation by trained individuals with a history of mental and/or addictive disorders. These individuals are often effective in working with consumers and families, who are likely to have more confidence in someone who has had similar experiences.

A court may order treatment and hold entities in contempt if the court’s orders are not met. The two types of court treatment orders are (1) orders of involuntary commitment; and (2) orders requiring offenders, especially drunk drivers, to get addiction treatment. Orders for addiction treatment of offenders are far more common than orders for involuntary commitment. In the case of addiction treatment orders, the legal requirement is on the offender/client, not the MCO or provider, but such orders pose a potentially significant demand for services.

Court-ordered treatment often evokes much discussion and strong sentiments among the parties involved. Some consumers and families contend that use of involuntary treatment signifies a breakdown in a care system and that a well-functioning system should not have many involuntary treatment episodes. It is essential that purchasers make thoughtful decisions consistent with State laws and regulations about this particular aspect of behavioral health care treatment.

A key issue related to court-ordered treatment is who, ultimately, will be financially responsible. If the State or county remains financially responsible for involuntary substance abuse and mental health commitments, the MCO may have an incentive to shift its costs to the State by seeking commitment in cases where the appropriate response is not clear cut. This situation may hinder consumers from getting appropriate voluntary treatment and act as an incentive to allow consumers’ conditions to deteriorate to meet involuntary commitment criteria. In the case of court-ordered treatment, MCOs often object to being forced to pay for services they do not deem medically necessary and/or that the consumer may not want (IOM, 1996).

Purchasers, MCOs, and the criminal justice system must work together from the beginning of a managed care initiative to ensure clear lines of responsibility. The first step is to create a forum where courts can participate in discussions with the purchaser and the MCO. The MCO’s responsibility in terms of assessment and treatment for responding to court-ordered referrals must be clarified. The courts must understand that the system provides medically necessary care and does not function as a secure alternative to incarceration. Each may need to adopt a new orientation to court-ordered treatment.

B. MCOs’ Consumer Complaint, Grievance, and Appeal Procedures: Intersection With the Medicaid Fair Hearing Process

When there are open avenues for managed care enrollees to express their questions, disputes, disagreements, and challenges, it is possible for consumers and families to challenge an MCO’s decisions about eligibility, diagnoses, medical necessity determinations, types and levels of services, provider choice, and provider treatment procedures. If MCOs have procedures for resolving difficulties that are Aeffective, expeditious, accessible, fair, and uniform@ (Bazelon Center for Mental Health Law, 1995), consumers will gain reassurance that the MCO is responsive to their concerns. This reassurance may help encourage consumer participation and cooperation and lead to satisfactory settlement of disputes.

Protecting the rights of consumers and families to file grievances and appeals allows purchasers of managed care to have final control over issues that arise from the MCO’s performance and its approach to problems related to quality of care. In addition, a well-functioning grievance and appeal process can also provide the purchaser with evidence of problems in the quality of care. Such information can be used to monitor the degree to which the MCO has addressed these problems.

Medicaid recipients are entitled to fair hearings in accordance with constitutional principles of due process and fundamental fairness whenever a State agency makes a fact-based decision to deny, reduce, or terminate Medicaid benefits. (Across-the-board reductions in Medicaid benefits resulting from changes in a State plan necessitate advance notice but not a fair hearing.) The denial, reduction, or termination of medical assistance that is considered medically necessary constitutes the type of State action that triggers the constitutional fair hearing requirements.

Extensive regulations governing fair hearings for Medicaid recipients are set forth in the Federal Regulations (42 C.F.R. '431.200). When a fair hearing is requested in a timely fashion (within 10 days of the notice of intended action), services must be continued until a decision following the fair hearing is reached. The initial notice of intended action must state the actions being taken and the reasons for them. The fair hearing itself must comport with due process standards.

Enrollment in an MCO does not annul Medicaid beneficiaries’ fair hearing rights, because the MCO is acting as an agent of the State in making coverage determinations. Several court decisions have now held that managed care enrollment leaves Medicaid recipients’ fair hearing rights untouched (Wadley v. Daniels [926 F. Supp. 1305 (M.D. Tenn., 1996)]; J. K. v. Dillenberg [836 F. Supp. 694 (D. Ariz., 1993)]. A rapid and fair managed care complaint and grievance process represents an important means for reducing the number of fair hearing requests and achieving more rapid resolution of enrollees’ problems.

Federal regulations require MCOs to maintain internal grievance procedures that are approved in writing by the agency, provide for prompt resolution, and ensure participation by individuals with the authority to order corrective action (42 C.F.R. '424.53).

State Medicaid agencies should consider adopting for their Medicaid contracts the expedited review procedures required for Medicare+Choice plans, which procedures apply to Medicare beneficiaries enrolled in managed care arrangements. The expedited review procedures are designed to ensure rapid determinations and reconsiderations in situations where a health maintenance organization (HMO) determines that Athe application of the normal time frame [60 days] for making a determination (or a reconsideration following a determination) could seriously jeopardize the life or health of the enrollee or the enrollee’s ability to regain maximum function@ (Social Security Act '1852(g)(3)). The provision gives the HMO 72 hours from the date of the request to make a determination or a reconsideration of the need for the expedited review, as well as a decision on the merits of the Medicare beneficiary’s claim. Coverage denials are then reviewed by an independent organization.

Purchasers should be aware of the challenges that managed care procedures and requirements present to those in need of substance abuse and mental health services. These are the same consumers who challenge the system because of their extensive need for services. Consumers, their families, and advocates want to be, and should be, involved in designing plans of care for these individuals. Purchasers should make consumer protection a top priority and be vigilant in ensuring that systems are in place to guarantee that these vulnerable populations receive needed service in a timely, efficient, and competent manner.

Last Updated 11-7-02