Testimony
Statement of Diane Archer, Esq.
Executive Director, Medicare Rights Center
Before the United States Senate
Special Committee on Aging
Improving Accountability in Medicare Managed Care:
The Consumer's Need for Better Information
April 10, 1997Thank you very much for the opportunity to testify today. I am the Executive Director of the Medicare Rights Center, a national not-for-profit organization based in New York. MRC assists seniors and people with disabilities on Medicare through counseling and public education. MRC operates an Insurance Counseling and Assistance telephone hotline with partial support from the New York State Office for the Aging. Last year, we fielded more than 42,000 calls to our Medicare counseling hotline. (Appendix A)
The proportion of hotline callers with questions about Medicare Health Maintenance Organizations has exploded from one in twenty just two years ago to one in five this year. Clients call us with all sorts of questions that we are unable to answer. Which HMO is best? Which ones will take good care of me when I get ill? Can I go to St. Vincent's Hospital with this HMO? Is this HMO the Cadillac of health care or the Ford Pinto? While we provide a general overview of Medicare HMOs, we advise callers to research specifics by requesting information directly from the HMOs.
In an effort to help our clients with the legwork of shopping for HMOs, we performed our own survey of the HMOs in downstate New York. We asked each of them 90 questions on plan benefits, costs, rules, restrictions, structures and measurements of quality. (Appendix B) We found the process of shopping for HMOs to be tremendously time-consuming. Moreover, much of the information provided by the HMOs was not useful for making comparisons. (Appendix C)
- The survey took far more resources and time than most people on Medicare can devote. We made over 100 telephone calls and sent over 50 faxes and mailings to get answers from 11 Medicare HMOs. Even though we were able to bypass the customer service department, response times ranged from 2 weeks to 8 1/2 months. A person on Medicare slogging through customer service voicemail would have had even more difficulty.
- Answers to the survey were often not useful for making comparisons. Data related to quality of care, such as the rate of appeals for denials of care, the rate at which HMO members left the plan, and member satisfaction were collected in different ways and thus not comparable. And benefits such as prescription drugs and point-of-service coverage for out-of-network care were hard to compare. Confusing terminology and confusing answers also made comparison difficult. (Appendix D)
- There were many questions that HMOs refused to answer. HMOs wouldn't reveal clinical guidelines or utilization review guidelines that could give people an idea of what care they would get if they became ill. The majority wouldn't reveal which drugs were covered in their formularies. Of those that did, only HIP volunteered the conditions under which the drugs would be covered. One HMO, CIGNA, even refused to provide a list of doctors in the network, stating it was only available to people on Medicare if a sales representative were allowed to visit them.
- The answers changed constantly. Throughout the project we had to constantly update our chart to incorporate changes in HMO benefits, costs, rules and restrictions. Doctors in the HMO networks and drugs in the HMO formularies also changed regularly.
So, even with the survey results, our counselors are hard-pressed to distinguish among HMOs. We still don't have useful information about quality, and the answers on the chart are too misleading to release without an accompanying explanation. Consumers need comparison charts, but comparison charts alone are not enough. In order to help consumers to make meaningful choices among competing HMOs, they need:
- Comparison charts that are based on standardized, audited, HMO data.
- Up-to-date information on HMO network providers, formularies, and rules and restrictions on care.
- Standardization of additional HMO benefits.
- Easy availability of HMO data and comparison charts, and public education to help them use the comparative information.
1. Comparison charts must be compiled that are based on standardized, audited, HMO data.
The answers that HMOs gave for our survey questions on rates of appeals, grievances and disenrollment were not useful for comparison. HMOs had different methods of collecting and reporting data, and no outside agencies reviewed the accuracy of their information. Other information that HMOs use to advertise quality, such as consumer satisfaction surveys and National Committee for Quality Assurance data on plan performance, is neither audited nor standardized and thus of limited value for comparing HMOs.
People on Medicare today get the majority of their HMO information from marketing materials and presentations. They have very little objective information about HMOs and aren't educated about what they should look for beyond the glossy brochures. HCFA already collects or should collect much of the information that people on Medicare could use to choose among HMOs, such as disenrollment rates, benefits and costs, and it is developing standardized measures of consumer satisfaction. HCFA should release comparison charts based on this information as a needed first step towards informed choice for people on Medicare.
2. Up-to-date information on HMO network providers, formularies, and rules and restrictions on care should be made available to the public on a frequent and regular basis.
In order to make smart choices, consumers also need detailed information, such as the drugs covered in HMO formularies, that can't be included in a comparison chart. Much of this information is unavailable and constantly changing. While some consumers may be satisfied to compare copayments and caps on prescription drug benefits, others will need more specific and up-to-date information on which drugs the HMO will cover. For example:
Mr. P of West Palm Beach joined Humana, a Florida Medicare HMO, for its prescription drug benefit. However, the drug used to control his prostate enlargement was taken off the HMO formulary, and he was left to pay for his medication out-of-pocket.
Many people pick HMOs based on the doctors or hospitals in the HMO network. They want to know before they enroll which doctors are in an HMO, whether they accept new HMO patients, and whether they have referral privileges to other doctors or hospitals that they want to see. Consumers need this information to make informed choices, just as they need information on how HMOs oversee the care that doctors give their patients. Such information includes clinical guidelines with recommendations on how doctors should care for different illnesses, and utilization review guidelines describing the conditions under which HMOs will approve particular treatments for different conditions. For example:
Mr. K of Bridgeport joined Keycare 65, a Pennsylvania Medicare HMO, after the HMO told him that his doctor would deliver exactly the same care in the HMO for his cardiac arrhythmia as he did in traditional Medicare. After he joined, his doctor told him that he could no longer obtain the tests that he needed for his heart condition twice a year, as he did under traditional Medicare, because the HMO would only authorize them once a year unless he became significantly ill. Mr. K returned to traditional Medicare to get the tests he needed. Without access to up-to-date descriptions of what HMOs cover and their conditions for coverage, consumers are vulnerable to a bait-and-switch game.
HCFA should regularly make available to consumers current information on providers, formularies, clinical guidelines and treatment restrictions. HMO information for consumers should also include notification that benefits and provider networks may be subject to change.
3. Additional HMO benefits should be standardized to allow consumers to make more meaningful comparisons, just as Medicare supplemental insurance was standardized several years ago.
Our clients tell us that shopping for an HMO today is unnecessarily complicated. Our own experience compiling the comparison chart for New York City HMOs confirms their opinions:
- HMO benefits are difficult for our clients to compare by cost. How are they to weigh Elderplan's eyeglass benefit with a $10 copay against PHS's eyeglass benefit with a $100 maximum?
- HMO benefits are difficult for our clients to compare by coverage. How are they to know that the "point-of-service" benefit for out-of-network coverage can mean $100 every three months at NYLCare and 80% of the Medicare-approved amount for an extra $87.50 premium each month at USHealthcare?
The additional benefits of Medicare HMOs should be standardized in simple, easy-to-understand packages which still allow room for HMOs to offer new innovations and benefits. Standardized benefits, along with disclosure of information like drug formularies that is difficult to standardize, are needed in order to help people on Medicare make better comparisons among competing HMOs.
4. The HMO data and comparison charts should be made widely available, and funding should be committed for public education to help people on Medicare use the information.
While some comparison charts of Medicare HMOs have been created, the commitment to systematically create and disseminate them has not been made. HCFA should collect and verify the necessary data to compile comparison charts, and make the charts and information on providers, formularies and treatment restrictions available on the Internet, in publications and through the media. People on Medicare should be able to find information on HMO benefits, costs and restrictions as easily as parents are able to find test scores for school districts in the newspaper.
Public education efforts must accompany the comparison charts as well. Most people on Medicare have little experience with managed care and do not understand the relevance of many HMO quality measures to their own health care. Preliminary results from our survey of low-income elderly reveals that most do not even fully understand that HMO members can only see HMO doctors and hospitals for their care. (Appendix E) Many people on Medicare need public education in order to understand what a Medicare HMO is before they can try to choose among HMOs. Information must be disseminated in a way that is meaningful to consumers, and appropriate resources for insurance counseling programs across the U.S. should be secured.
Thank you for your time and interest.