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1994.
12.05 :  Appeal Rights for HMO Enrollees

Contact:  Anne Verano   (202) 690-6145
December 5, 1994

               APPEAL RIGHTS DEFINED FOR HMO ENROLLEES


     The federal Health Care Financing Administration has
announced a regulation that strengthens the rights of Medicare
beneficiaries to appeal coverage and payment decisions by
managed-care plans in which they are enrolled.

     More than 2.8 million Medicare beneficiaries are enrolled in
222 plans affected by the regulation.  The number of Medicare
enrollees in managed-care plans has increased 27 percent in the
last two years.

     HHS Secretary Donna E. Shalala said the final regulation,
published in the Federal Register, provides the managed-care
enrollees with appeal rights similar to those available to
beneficiaries in traditional Medicare fee-for-service
arrangements.

     The new rules require immediate reviews by Medicare Peer
Review Organizations when the managed-care enrollees protest that
they are being prematurely discharged from hospitals.  A
beneficiary may not be charged by the hospital or by the health
plan for the inpatient days allowed for the review. 

     The regulation also specifies that Health Maintenance
Organizations and Competitive Medical Plans must respond within
60 days to requests from Medicare enrollees for reconsideration
of coverage and payment decisions.

     "This reinforcement of appeal rights corrects a deficiency
in existing regulations," said Bruce C. Vladeck, administrator of
the  Health Care Financing Administration.  He explained,
however, that "most managed-care organizations are already
responsive to their enrollees and conduct requested
reconsiderations in a timely manner."

     Although the 60-day time limit for answering appeals has
been a policy set forth in a Medicare manual for HMOs and CMPs,
the policy gains the force of law as part of the Code of Federal
Regulations.  

     The appeals process entitles Medicare beneficiaries to
reconsideration of cases when:

     o    They believe they have been denied services to which
          they are entitled under Medicare, and 

     o    They are billed for amounts they believe should be the
          responsibility of the HMOs or CMPs.

     If the HMO or CMP reaffirms its denial of payment or
services, the case is then referred to the federal Health Care
Financing Administration, which reviews the entire case history
to make a new and independent judgment on the issues.  Enrollees
retain the right to take their appeals to the higher levels of
administrative law judges and the courts. 

     The regulation also requires organizations known as Health
Care Prepayment Plans (HCPPs), which cover only Medicare Part B
services by physicians and other non-institutional providers, to
establish appeal procedures similar to those of HMOs and CMPs,
which offer comprehensive benefits.

     HCFA contracts with managed-care plans for the care of
Medicare beneficiaries, makes monthly payments and requires that
the benefit packages include all services mandated by law for the
Medicare program.

     HMOs and CMPs frequently offer extra benefits -- such as
routine physical examinations and prescription drugs -- that are
not covered by the Medicare program.  The appeal rights of
Medicare beneficiaries extend to all services in the basic
benefit packages of the managed-care plans.
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