Summary of Section Five  MANAGED CARE OMBUDSMAN PROGRAM

Background - Consumers need help navigating the new world of managed care, particularly vulnerable populations who have the greatest health care needs and the most to lose under managed care arrangements.

Consumers have very basic questions about managed care: What is managed care? How is the delivery of health care services different in a managed care plan? Will I have a choice of my own physician? Can I receive care outside the network of plan providers? How do I select a plan? Is there comparative information on plans to guide my selection? What does this comparative information tell me? What are my rights as a member of a health plan? What do I do if I have a complaint about the plan or believe that services are being denied me? How do I file a complaint or appeal a treatment decision? Can I leave a plan at any time if I am dissatisfied? What is the process of enrollment in a new plan? Consumers need an advocate to help answer these important questions and guide their participation with managed care programs.

The concept of an ombudsman has a long and treasured history in health care. In the context of managed care, an independent ombudsman program could play a valuable role for health care consumers. An ombudsman program could educate, train and assist consumers in selecting managed care plans and help individuals resolve complaints and understand their rights as members of a plan. An ombudsman program could also help consumers organize around managed care issues and advocate for needed consumer protections and quality oversight initiatives.

The State Long Term Care Ombudsman Program created by the Older Americans Act represents a useful model that could help inform the design of an ombudsman initiative under managed care. The current program is more narrowly focused on patient advocacy in long term care facilities but its functions and responsibilities can be easily translated to managed care settings.

Another relevant program created by the Older Americans Act and funded by the Health Care Financing Administration (HCFA) is the Health Insurance Counseling Assistance Program (HICAP). HICAPs assist the elderly in understanding Medicare's insurance and payment policies, Medigap insurance policies, and the Medicare HMO option available to seniors. As Medicare HMOs become more broadly available to beneficiaries, HICAPs have experienced a marked increase in inquiries and requests for assistance. HICAPs, particularly those that are linked to legal assistance programs, are also involved in identifying systemic problems that the elderly consumers encounter with managed care plans and have become effective advocates for consumer rights in these settings.

With the dominance of employer-based insurance in the private sector, employers typically assume the role of an ombudsman for their employees. This is particularly true for large employers, where personnel and benefit administration offices organize information for employees on plan selection, provide education on health plan member rights, and often play interference for employees that have concerns and complaints with their plan. Small employers have a more difficult time providing needed assistance to employees because of limited resources and might be convinced of the advantage of a publicly sponsored ombudsman program. Employees working for large or small employers would benefit from an independent ombudsman program.

Conclusion - The ombudsman model is well accepted in health care and needed to help consumers navigate the uncertain and new world of managed care. Consumers often lack the knowledge and resources to understand and assert their rights as enrollees of managed care organizations. An active ombudsman program will fill this void and become a critical consumer protection under managed care.

Model Legislation Highlights

The state is directed to contract with an independent organization, organizations, or consortia of organizations for the performance of ombudsman functions.

Responsibilities of an ombudsman organization include:

• assisting consumers in selecting health care plans appropriate for their needs;
• training consumers to understand and use the annual consumer guide on plan performance and marketing information prepared by plans;
• educating plan enrollees about their rights and responsibilities;
• identifying, investigating, and resolving enrollee complaints about health care services in a plan;
• assisting enrollees with filing formal appeals of plan determinations, including preservice denials and the reduction and termination of services.

• represent the interests of consumers before government agencies and legislative bodies considering consumer protections and quality assurance under managed care;
• analyze, comment on, and monitor the development and implementation of managed care public policies and programs;
• promote the development and provide technical support for consumer organizations organized to advance consumer protections and quality under managed care.

Private sector, non-profit entities, with public member majorities on their governing boards are eligible to become ombudsman organizations under contract with the state. Contracts with ombudsman organizations will be for a term of three years, renewable by the state based on satisfactory performance. The state will ensure that ombudsman organizations have access to all appropriate health plan information and data, including the medical records of enrollees (with enrollee permission), to carry out designated functions. Funding for the independent ombudsman program will be based on a small assessment of managed care plan premiums in the state.

Consumer Coalition for Quality Health Care

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