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Chapter 5 of TAP 16: Purchasing Managed Care Services for Alcohol and Other Drug Treatment: Essential Issues and Policy Issues

Chapter 5–Consumer Protections

The relatively recent emergence of behavioral healthcare companies has resulted in this type of health care being largely unregulated by both States and the Federal government. Although States and the Federal government regulate health maintenance organizations (HMOs), health insurers, and alcohol and other drug (AOD) treatment providers, few such regulations govern the activities of managed care firms. While many firms act in good faith and provide quality services to those served, some do not and thereby damage the overall reputation of the industry.

In the absence of such regulation, several problems have occurred at different times in the implementing of managed care programs. These include:

• Failure to have adequate staff with specific skills and training in AOD diagnosis and referral

• Failure to use acknowledged AOD patient placement criteria

• The use of financial arrangements that create incentives to undertreat

• Inadequate grievance procedures

• Inadequate emergency procedures

• Incomplete coverage for approvals in the evenings and weekends

• Inappropriate shifting of costs to public funding sources

Without consumer protections in place, this combination of factors can potentially lead to inadequate and sometimes dangerous care. In response to this, the Model Managed Care Consumer Protection Act was established to provide reasonable protections to consumers. It sets a standard that allows responsible managed care firms to continue to carry out their functions, but creates much-needed consumer protections for those firms whose policies or fiscal incentives can lead to less than adequate care (President's Commission on Model State Drug Laws 1993, pp. D75-D95; D. Gates, Pennsylvania Health Law Project, personal communication, March 1994).

Focal Points for Consumer Protection

The following are some key consumer protection areas that should be incorporated into a contract with a managed care entity. Exhibit 3 provides sample contract language pertaining to consumer protection.

Openness of Systems

MCOs differ substantially regarding how available, specific, and/or valid their patient placement criteria are to providers and enrollees. Public access and input to these processes can lead to improved quality, accountability, and provider/consumer relations.

Out-of-Plan Services

It is important that enrollees have reasonable access to appropriate treatment services. Systems need to be set in place to ensure this access if providers cannot, at a given time, offer these services within the formal system.

Consumer-Friendly Materials

Written information from MCOs is sometimes difficult to obtain and challenging to read. It is essential that all necessary materials be readily available and be written in clear and simple language(s).

Disenrollment Protections

The extent to which services are covered and the amount of that coverage vary greatly. Limits on coverage can include maximum number of days, number of visits, or dollar amounts.

MCOs often have incentives to disenroll or to encourage disenrollment of individuals perceived as expensive or difficult to treat. Additionally, in highly competitive markets, MCOs sometimes use dubious procedures as they compete for enrollment.

In general, contracts should make disenrollment by the provider or MCO very difficult. This can be done by requiring that the provider or MCO take multiple and monitored steps in disenrollment, while making disenrollment by the consumer a relatively easy, single-step process (Boyer 1993; President's Commission on Model State Drug Laws 1993). All disenrollments should be documented and reviewed by the financing agency and/or the State AOD authority.

Appeals

Legitimate differences of opinion regarding the clinically appropriate level, length, or intensity of care for a given problem are inevitable. Every MCO must have a user-friendly vehicle for handling appeals and grievances.

Staffing and Gatekeeping

The training, experience, qualifications, and overall sensitivity of "gatekeepers" is crucial when addressing the needs of individuals with AOD problems. Gatekeeping is a central component within the managed care environment. MCOs should be required to provide ongoing training of gatekeepers.

The MCO should be able to demonstrate knowledge of all relevant Federal/State laws and governing provisions regarding AOD treatment. Such relevant laws and regulations include the Americans with Disabilities Act and confidentiality regulations.

References

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Center for Substance Abuse Treatment. Annotated Bibliography of Managed Care Readiness Materials. Rockville, MD: U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, 1994.

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Bibliography

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Last Updated 11-7-02