TEXAS: Few Appeal HMO Decisions Under New Law
Only sixteen Texas residents "have appealed treatment decisions by their health insurers under a much-publicized state law that took effect Sept. 1," which according to the Dallas Morning News "is adding fuel to a growing national debate about whether HMOs deny medically necessary care." State lawmakers "approved the measure last spring after hearing numerous patients testify that HMOs denied them medical care to reduce costs and improve earnings." They had expected "up to 4,400 requests for external reviews in the first year," but "[t]he latest figures suggest the year's total will be far less than 100." Leah Rummel, deputy insurance commissioner in charge of HMOs, said, "This is well below our expectations. Many people don't yet know what it is or what to ask for. And some of the insurance companies are still in the process of informing their enrollees of the option to appeal." The law allows patients "to ask for an independent review after they exhaust their insurer's internal appeals process. Only nine states, including Texas, currently give patients that right."
Consumer vs. Insurer
Consumer groups and trial lawyers "say the few cases submitted to state regulators confirm their worst fears about managed-care companies," since in nearly "half the cases reviewed -- six of 14 -- the independent panel overturned HMO decisions." But insurance industry representatives "read the figures far differently. They say the low number of appeals shows that folks are happy with their health plans and do not feel that treatment denials are unjustified." They also said that "many complaints are resolved long before any state appeal." Texas Medical Association officials believe that "many insurers have changed their internal practices to avoid the expense of independent reviews," as "the insurance company is billed between $460 and $650" per claim, but patients are not charged. Connie Barron, a TMA lobbyist, said, "It's a lot easier to deny things if nobody is going to look over your shoulder. Perhaps they're looking at those cases more carefully and approving care that might have been more readily denied in the past."
The impact of Texas' appeals law will "figure in the national debate of managed-care reform legislation in Washington," according to the Morning News. "Opponents of congressional action" to mandate external patient appeals on a national basis say that "more time is needed to study the impact of different states' regulations." However, supporters of the measure say that the Texas experience could actually "boost" the chances of an external appeals bill passing because "the Texas law has had a minimal impact on costs." John Stone, a spokesperson for Rep. Charlie Norwood (R-GA), sponsor of the leading proposal in Congress to mandate consumer protections, said, "It hasn't broken the backs of the managed-care industry. It just provides a safety valve that's not going to drive up costs on insurance premiums, and it's not going to push people out of managed care" (Ornstein, 3/18).