Resolving Complaints in Medicaid Managed Care:
The "Brutal Need" for Consumer Protections
© 2000 by National Health Law Program
By Jane Perkins
Staff Attorney
National Health Law Program
RJ is a nine-year-old boy who lives with his mother in North Carolina. He suffers from bipolar disorder and attention deficient disorder, conditions that have made his daily care and education extremely difficult. RJ is poor and enrolled in the Medicaid program. Medicaid is the largest health insurance program for the poor in the United States. It is designed to serve population groups that private insurers avoid and covers more disabled and medically fragile children than any other health insurance program in the country. RJ's Medicaid program has contracted with another entity to manage the health care services used by RJ and other children with mental health needs.
Last year, following a stay in the hospital, RJ's doctor decided it was medically necessary that RJ be immediately readmitted for additional treatment. While his mother went home to get RJ's cloths, his doctor telephoned the managed care program for permission to readmit. Upon returning to the hospital, the mother was told that admission was denied and that RJ would be sent home with increased medication. Although the mother disagreed with the decision, no one explained to her what she could do. At home, RJ's condition declined; he developed side effects from the medication, which increased his impulsiveness, aggression, insomnia, and destructiveness. His mother had to leave her job to care for him and to repair parts of her home that were destroyed during aggressive outbreaks. She called a utilization reviewer at the managed care plan and asked how to complain. The plan representative told her that her complaint started and stopped with him. RJ's mother turned to a legal aid lawyer to get her son the inpatient treatment that he needed.
The State of North Carolina is not atypical. The vast majority of state Medicaid agencies are contracting with private companies, and in some cases other public entities, to manage health care for Medicaid beneficiaries. While debate has centered on whether Medicaid managed care improves access and saves money, there has been little focus on how these programs affect long-standing constitutional rights of beneficiaries -- particularly the rights that arise when there is a complaint about covered services.
The standards that guide complaint resolution for Medicaid beneficiaries were settled over 25 years ago in a U.S. Supreme Court case called Goldberg v. Kelly. Goldberg held that, because they are destitute, poor people have a "brutal need" for public assistance, and this assistance is guaranteed until constitutionally-required "due process" protections are met. As described by Goldberg and implemented in Medicaid law, due process requires that the state and its agents provide:
Over the years, these procedures have been invoked against state Medicaid programs, but the states have not questioned their underlying validity. Nothing about Medicaid managed care alters these protections. And innovation in resolving managed care disputes, while welcome, must conf2002orm to them.
Notwithstanding all this, due process protections are being lost in the day-to-day operation of Medicaid managed care programs across the country. This article focuses on how managed care is affecting the complaint process, describes the problems that most often are encountered by Medicaid managed care enrollees, and offers recommendations for how these problems can be addressed. (While this article focuses on Medicaid, its reasoning applies equally to the federal government's other major public insurance program, Medicare.)
Managed care is affecting the process for resolving complaints.
As it is affecting many other aspects of health care delivery, managed care also is changing the dynamics of the complaint process for Medicaid beneficiaries. In traditional fee-for-service Medicaid, beneficiaries are on their own to find a health care provider. For the most part, the state, as the insurer, passively waits for the provider's claim for a service that already has been delivered to the beneficiary.
As a result, most Medicaid fee-for-service complaints involve a claim for payment after the beneficiary has received care. The individual making the claim has a record of service from which to work; the provider and payer must be accountable to that record; and the decision maker is dealing with a fairly complete picture. It is also a critical feature of these fee-for-service complaints that the provider has a financial incentive to assist the beneficiary to pursue a claim so that the provider can get paid.
By contrast, under the managed care arrangements focused on in this article, the state Medicaid agency actively requires the beneficiary to receive care from a provider who is part of the managed care organization's network of providers, and this provider controls the services that the beneficiary gets. The provider, in turn, is monitored by the plan to make sure that his clinical practices and treatment decisions do not involve excessive costs. Notably, the managed care organization (MCO) has signed a contract with the state that requires it to provide the medical care covered by the contract, and it is being paid a fixed prospective "capitation" payment for each beneficiary who enrolls. In other words, the MCO is taking on the role of both insurer and clinical provider and it, rather than the state, is at risk for the patient's care.
These business arrangements have implications for complaint processing. To begin with, risk-based capitation means that, when there is a complaint, payment is generally not the primary issue. Courts have noted that managed care creates "pecuniary incentives . . . for . . . denying, suspending, or terminating care."(2) So, complaints are more likely to involve services that are being denied or delayed. As a result, disputes need to be resolved quickly, since the patient must await the resolution of the complaint process in order to obtain the service. Because they cannot afford to go "out of the network" and purchase services at private pay rates, Medicaid beneficiaries who are denied services urgently need strong due process protections. This is particularly true for Medicaid beneficiaries with ongoing, severe, or chronic needs who are denied services.
To complicate matters, the record in managed care cases probably will not contain complete information because (unlike fee-for-service) the care has not yet been rendered. Absent consumer protections, the MCO's justification for its actions can become a moving target as the reasons for the denial are adjusted to counter what the patient has claimed. This situation can leave the patient shooting in the dark when it comes to responding to a denial of service. Moreover, the network providers have signed contracts with the MCO that probably condition their payment and future participation in the network on limiting care. As a result, the managed care system has made "strange bed-fellows" of providers who, in the fee-for-service system, had advocated for their patients when claims were denied.(3)
In addition, the MCO's contract with the state may place new, increased responsibilities on the MCO and its providers to assure that care is accessible, readily available, and of high quality. An MCO can violate these provisions. For example, the delay in scheduling an appointment may have exceeded the time frames set forth for obtaining referrals, or an enrollee may have seen a specialist on a one-time basis and felt ill-treated by him or her even though the contract required network providers to treat members with courtesy and respect. These disputes regarding the manner of service delivery may not need individual prospective relief, as does a denial or delay of services. Nevertheless, a member should be able to complain when there is a problem and to know that the plan will be held accountable for a breach.
As compared with fee-for-service settings, managed care clearly represents a dramatic increase in both state and MCO responsibility for assuring that appropriate and high quality care is received by Medicaid beneficiaries who must use the managed care system. There is an increased need for Medicaid managed care grievance processes that guarantee that beneficiaries can obtain speedy resolution of disputes by someone who can respond to their cases objectively. The MCO, because of its direct pecuniary interest, is not an objective arbiter. As noted by one court, when complaining to the MCO, the consumer is "playing against a stacked deck with a significant possibility of deprivation."(4)
Beneficiaries Encounter Numerous Barriers to Successful Complaint Processing
The National Health Law Program's work with low income consumers and consumer advocates has repeatedly identified roadblocks to successful complaint resolution and due process in Medicaid managed care settings. In a recent national survey conducted by the National Health Law Program, respondents across the board -- consumers, consumer advocates, plan administrators -- expressed a high degree of dissatisfaction with complaint procedures, on more than one occasion describing them as existing on paper, but non-functional in practice. There are a number of problems:
1. The initial stages of managed care development may ignore due process.
Some states and MCOs appear explicitly motivated to minimize due process protections. When Ohio organized the Dayton Area Health Plan in the late 1980s, it envisioned using an MCO grievance process that would replace impartial, state-level fair hearings -- a proposal that was halted only after litigation was filed against the state. One California MCO's provider handbook recently has instructed primary care providers to inform the beneficiary of needed services only after prior approval for the services is first obtained from the plan. This type of provision virtually eliminates the chances that members will ever learn of denials.
Also of concern are some recent activities to require binding arbitration. The California Medicaid agency, for instance, is using a health plan choice form that tells beneficiaries, in very small print, that they may be enrolled in a health plan that requires them to give up their right to a jury or court trail and to use binding arbitration for any medical malpractice issue. At the time they select a plan, individuals are not informed of which plans require binding arbitration. People who fail to choose a plan are being automatically enrolled by the state into plans with binding arbitration without knowing it. Given that the arbitration process can cost up to $1000, up front, and one-half the arbitration fees thereafter, this is important information for a poor person to know when selecting a plan.
As they design and implement Medicaid managed care, state administrators have been quoted as saying that "extravagant" complaint systems are not needed because, in managed care, members just work things out informally with their plans. Even those states that recognize the need for some consumer protections often label some complaints as "inquiries" that are funneled into an informal, plan review that operates without due process. Still other state representatives have told consumer advocates that they are not willing to exercise the type of oversight over local health plans that is necessary to ensure due process.
2. MCOs don't understand the constitutional rights of Medicaid beneficiaries.
Many states do not include clear guidelines for complaint processes or train MCOs about due process requirements. The Medicaid Act mentions two levels of review, plan-level grievances and fair hearings. Federal Medicaid regulations provide only minimal guidance for the in-plan procedure: The state's contract with the MCO must provide for an internal grievance procedure that is approved by the state and provides for "prompt resolution" of disputes by someone in the plan with the authority to require corrective action.(5) Although federal regulations do not give a specific time frame beyond "prompt," a decision at the other level of review, the fair hearing, must occur no later than 90 days after the initial request to be heard. Unfortunately, while states' contracts with MCOs may go further than the federal requirements for plan-level grievances, the provisions often are vague.
To complicate matters, the MCOs with whom states are contracting may have no previous experience with Medicaid and, as a result, have never dealt with the due process protections that apply in government contracting. These MCOs are familiar with the dispute resolution mechanisms they use for commercial members -- protections which are not rooted in constitutional law and which, in most cases, are not as exacting. Even the MCOs that have experience with Medicare may be unprepared for the stronger protections that apply to Medicaid. For instance, only the Medicaid laws explicitly require continued benefits pending resolution of a dispute.
Unfortunately, without a proper understanding of the law, MCOs are on a collision course that will lead them to violate Medicaid beneficiaries' due process rights as they go about their daily activities. As noted by a recent Tennessee court, managed care systems must include MCOs that understand constitutional due process because, given their limited financial resources, Medicaid beneficiaries must depend upon "fastidious adherence to Medicaid requirements" to ensure they are not wrongfully denied needed benefits.(6) Clear government guidance is needed to assure consumer protection in these programs.
3. Medicaid beneficiaries don't understand the processes for resolving complaints.
Problems also arise because beneficiaries do not know of the complaint process. For example, an enrollee survey in Tennessee found that, more than a year-and-a-half into the TennCare program, 42 percent of beneficiaries still had not received even basic information about the grievance process or how to invoke their right to appeal to the state Medicaid agency.
Even when consumers do receive information about the complaint process, it may not be complete or easy-to-understand. For example, while a plan's member handbook may inform the member that disputes can be handled by contacting the plan, it may fail to inform the member that she also has rights to complain to the state Medicaid agency and to receive services pending the resolution of the dispute. Or, the MCO may provide Medicaid beneficiaries with a copy of the internal grievance process that is used for commercial enrollees -- which, as explained above, will not address the constitutional due process rights of Medicaid beneficiaries. Members who do not speak English or who have limited sight or hearing ability are even less likely to receive an adequate explanation of their due process rights.
4. MCOs say their decisions do not trip "due process."
Some states and MCOs have attempted to side-step beneficiaries' due process protections by claiming that the MCO's decisions about services are the judgements of private parties and, as such, do not involve "state action." This argument is significant because, absent state action, constitutional due process protections do not arise.
If accepted, this argument would mean that by privatizing the delivery of services, the state also could privatize the complaint process and repudiate its responsibility to accord constitutional due process when a denial occurs at the plan level. So far, the courts that have considered this argument have rejected it. In one Arizona case, the court quite sensibly found it "patently unreasonable to presume that Congress would permit a state to disclaim federal responsibility by contracting away its obligations to a private entity."(7) Rather, courts have found a "symbiotic relationship" between the state and the MCOs. As such, the MCOs are state actors which must adhere to the requirements for complaint processing, and the state must maintain responsibility for ensuring that the MCOs do, in fact, adhere to the due process laws.
5. Using an "enrollment broker" to resolve disputes can make matters worse.
A number of states are signing contracts with private or public entities to act as enrollment brokers, or "health benefits managers." The enrollment broker is paid by the state to provide education to beneficiaries on their managed care options and assist them with choosing and enrolling in a managed care plan. Some states are using their enrollment broker to hear and resolve disputes. These arrangements raise a number of concerns: By routing the complaint to the enrollment broker, the state is adding yet another layer -- and yet another contractor -- between the state and its customers (Medicaid beneficiaries). Moreover, serious conf2002licts of interest can arise. The enrollment broker is responsible for using non-biased information to help beneficiaries choose a health plan. What process does this counselor follow if there are one or more plans about which he has received numerous beneficiary complaints? Is he to provide this information to beneficiaries so they can make a fully informed decision?
6. Service denials/delays may not be accompanied by the proper notice.
The U.S. Constitution and the federal Medicaid Act require beneficiaries to receive a written notice that describes the basis for the action, the process for appealing and obtaining continued benefits, and that is timely. Problems can arise because many enrollees do not receive notices. Moreover, some notices are "so vague and illegible as to hide the ball."(8) Other times, the member receives a verbal denial without written notification of her rights. Or, the MCO might send a letter to the enrollee telling her only that the course of treatment is going to end on a certain date, even though due process requires that benefits continue pending the resolution of a complaint if the member contests the termination in a timely manner. Still other states continue to allow MCOs to use letters that simply inform the member that services are denied and to contact the member services department with any questions.
7. Service reductions/terminations may not be accompanied by continued benefits.
One of the most common problems occurs when MCOs reduce or terminate a service without first notifying the member of the right to receive continued benefits pending the resolution of the dispute, subject to recoupment by the state if the denial is conf2002irmed.
There are numerous examples of the harm that Medicaid beneficiaries have suffered when coverage has been denied during a protracted dispute resolution process. Beneficiaries in Tennessee are illustrative: During the course of HB's dispute, her condition deteriorated to the point where she faced the prospect of needing a liver and small bowel transplant. HG, another beneficiary, suffered a stroke while contesting her MCO's refusal to cover specialty care needed to clear arteries in her neck. Noting these horrible cases, a Tennessee judge concluded: "The potential damage to Plaintiffs in this situation is much worse than the potential damage to the state if the state continues providing benefits pending the completion of a hearing by an impartial adjudicator and then subsequently recoups the benefits if it prevails."(9)
8. States rely too heavily on MCOs to settle disputes.
Consumers want to have their complaints resolved in the quickest and least costly manner. States and MCOs argue this means that disputes should be contained at the plan level. While MCOs should have the opportunity to change their minds, this does not mean that the entire due process system can be privatized. The plan has a pecuniary bias and cannot be a neutral decision maker. Constitutional law requires impartiality and that full due process protection attach to a complaint when it is first voiced by the beneficiary. There are repeated examples of shortcomings, however.
Members who complain to their MCO have been routed endlessly to the member services department for "informal" resolution rather than having their complaint treated like a formal grievance. The complaints often go unrecorded, and members are not allowed access to a neutral decision maker. In Florida, Medicaid beneficiaries have reported being unable to register complaints with their managed care organizations because the phone lines are perpetually busy, and complaint forms are "lost in the mail" or ignored.
In some instances, members are caught in a multi-tiered grievance process that involves numerous plan-level personnel -- provider(s), the managed care organization member services department, the managed care organization grievance committee, not to mention numerous levels of grieving -- inquiry, reconsideration, first tier review, final plan review.
Notably, in-plan grievance processes -- even if they are not overly complex -- provide no substitute for constitutional due process. Constitutional law requires an impartial hearing officer: Hearings at the plan level are not impartial -- the MCO decision makers are deciding claims that are going to be paid out of the MCO's own pocket, and the decision maker is paid by the MCO. Not surprisingly, the courts have reasoned that these types of decisions -- made by an adjudicator who has a "direct, personal, substantial pecuniary interest" in ruling against one party to the action -- do not substitute for the impartial fair hearing process described in the Medicaid laws.(10)
Another problem occurs in those states that condition a state-level fair hearing on exhaustion of the plan's internal grievance procedure. Problems arise here if the grievance becomes stalled at the plan level while the member's health is placed in serious jeopardy. This situation may, in fact, occur with much more frequency than is apparent because initial responsibility for processing complaints rests with the very managed care organization which is saving money every day it denies the disputed service. Unfortunately, there is no federal requirement for expedited reviews where badly needed services are being denied. This is not surprising, given that the regulations were drafted when fee-for-service payments dominated. A number of states have implemented expedited review processes on their own accord. And at minimum, the Medicaid regulations require that final administrative decisions must be made within 90 days of the date that the request for a hearing is first made. In managed care settings, this time frame will be triggered either by the member's request directly to the state for a fair hearing or his request to the plan for resolution of the complaint. Thus, the grievance process will violate due process if it, either on paper or in fact, delays the decision from an impartial decision maker beyond this 90 day time frame. As simply stated in a recent court opinion: "To the extent that a claim in dispute remains unresolved for longer than ninety days from the time the enrollee requests review of the dispute, the procedures violate the Medicaid Act."(11)
9. States are not integrating their dispute resolution mechanisms.
Managed care has spawned innovation in dispute resolution. For example, some states are channeling disputes to hotlines and/or ombudsprograms that avoid formality and stress prompt resolution. These mechanisms play an important role in educating consumers and MCOs about managed care and giving information to consumers that will help them solve their problems "up stream."
However, problems can occur if descriptions of the managed care program and outreach materials emphasize only these mechanisms, thus leaving the complaint process as an extraordinary mechanism to be used only by those beneficiaries who can push aggressively for their due process rights. While needed, hotlines and ombudsprograms should exist along with -- and not substitute for -- a formal complaint resolution process. Due process, hotlines, and ombudsprograms should all be part of an integrated system that aims to get beneficiaries the services they need.
10. Beneficiaries' complaints go unheard.
The lack of information and due process protections cause beneficiaries' complaints to go unheard. Meanwhile, the member goes without or gets the service "out-of-plan" by paying for it from her own limited funds. Other members become "non-utilizers" who do not use the plan at all but rather wait for the first opportunity to disenroll from it. In states with monthly disenrollment, leaving the plan may, in fact, be the quickest course for a member to take. However, there are a number of reasons why disenrollment should not be used as a substitute for the grievance process. First of all, there may be no follow-up to determine why the disenrollment occurred, and quality control suffers. Second, this use of disenrollment could allow MCOs to engage in adverse selection of high utilizers -- to push high cost patients out of the plan when they begin to complain. Third, the MCO already has been paid to provide the service and should not be allowed, through disenrollment, to avoid its responsibilities and destabilize the financial assumptions that have gone into the state's calculation of system costs. Moreover, as states increasingly impose "lock-in" periods, which require beneficiaries to stay in the plan for six months to a year, disenrollment becomes an even less appropriate substitute for due process. Simply put, allowing disenrollment, rather than working through complaints, is "poor public policy" because it means that Medicaid (and, thus, the taxpayers) will pay twice: once to the MCO ostensibly to cover the service and again to another provider once the beneficiary has disenrolled from the MCO and received the service from that provider.(12)
At any rate, it is not surprising that states report formal systems of complaint processing, while needed, are rarely used. For example, in the entire first year of the TennCare program, not a single state-level fair hearing decision was issued, despite numerous reports of improper service denials and conf2002usion.
Recommendations to improve Medicaid dispute resolution in managed care settings.
In Mathews v. Eldridge, the U.S. Supreme Court recognized, "'Due process' unlike some legal rules, is not a technical conception with a fixed content unrelated to time, place and circumstances. . . . [D]ue process is flexible and calls for such procedural protections as the particular situation demands."(13) The rapid expansion of managed care and the effects that managed care is having on the complaint process demand that all participants in the Medicaid system take another look at how complaints should be handled in "the best interests of the recipients."(14) Consumers and consumer advocates are voicing a number of consistent bottom lines:
Consumer involvement. Consumers and consumer advocates need to be involved in the development of complaint procedures. There must also be ongoing consumer-based education and information about complaint procedures and the nature of the complaints that are being filed.
Uniformity of processes. Grievance procedures must be the same from plan to plan. From the start, all complaints should be filed: (1) on a standardized grievance form, and (2) at a single address within the state Medicaid agency. As Tennessee now does, the agency can log in the complaint and send it immediately to the MCO that is involved. This process simplifies matters for consumers (who may not know their plan's name or address), provides the state with important information for monitoring purposes, and clearly starts the meter running on the time frame for reaching a final decision.
Notices. Consumers must receive a timely and easy-to-read notice of complaint procedures at the time they enroll and promptly whenever a service or referral requested by a health care provider, enrollee, or person acting on his or her behalf is delayed or denied, or before an ongoing course of treatment is reduced or terminated. Consumers and MCOs need to know about the circumstances when benefits will continue pending resolution of the dispute, and consumers need to know what steps to take to trigger continued benefits. State and plan personnel and ombudspersons should be readily available to assist consumers with grievances.
The notice should be clear. It needs to include all of the information that the federal laws require for notices. In addition, it needs to provide instructions on how to obtain supporting evidence, including medical records and supporting affidavits from the attending physician.
If, as in California, a state insists on allowing binding arbitration, Medicaid beneficiaries should be informed what arbitration is and the implications of losing a trial by jury; which plans require arbitration; what are the fees for arbitration; and whether there are any circumstances under which fees are waived.
Time frames for prompt resolution of disputes. There should be clearly defined time frames for complaints to be processed and resolved and provisions for expedited reviews of urgent matters. If a dispute is not resolved within the defined time frame, it should be automatically decided in the member's favor.
Exhaustion of in-plan grievance procedures should not be required prior to a state-level fair hearing. An in-plan grievance process is constitutionally defective because it is not before an impartial decision maker. Moreover, the MCO can change its mind at any time pending the state hearing. (The beneficiary might still have a complaint about whether the services were covered in the manner required by the contract.)
The process needs to honor the state Medicaid agency's role as final decision-maker. Consumers must be guaranteed access to a final impartial decision on their dispute within the time frame required for expedited review and, otherwise, within 90 days of the date they first file their complaint with the MCO or state.
"Manner-of-delivery" disputes. To address manner-of-delivery disputes that may not require prospective injunctive relief, the state should make it clear to MCOs and beneficiaries that the impartial decision maker has the authority to order corrective actions to prevent recurrence of a problem, including payment of fines, and to report periodically to the Medicaid agency's quality monitoring staff regarding actions taken. New Hampshire and Vermont, for instance, include provisions in their contracts with MCOs informing them that the complaint process can include a wide range of issues that are under the plans' control, including availability, accessibility, and perceived quality of or satisfaction with care.
Hearings before an impartial decision maker. Medicaid managed care enrollees must be guaranteed the right to a hearing before an impartial decision maker who is not connected in any way to an MCO that is participating in the Medicaid program. The beneficiary will have the right to review their case file prior to the hearing, attend the hearing in-person, present evidence, and cross-examine witnesses. The decision maker will not engage in ex parte communications with one side or the other. As is required in California and North Carolina, Medicaid beneficiaries should be notified of the availability of free legal assistance. Special needs should be accounted for, so that both notices and fair hearings are able to accommodate disabled persons, persons with limited English proficiency, and persons with limited reading skills.
Integrating the system. The complaint process should not exist in isolation but rather should be integrated with other dispute resolution mechanisms, such as hotlines, ombudsprograms, and advisory boards.
Sanctioning MCOs. The complaint process needs to recognize the ability of the state to levy sanctions against MCOs that withhold needed care. Otherwise, an MCO can act in bad faith to deny care that it has been paid to provide, and the needed care simply will be lost during that time period. Even if the MCO ultimately is required to provide the care, the MCO has still profited from the period of delay because it has continued to receive its fixed, prospective payment for that member. Thus, financial penalties need to be used to counteract the fiscal incentives on the part of the MCO to inappropriately deny services. The financial sanctions need to be large enough to deter the MCO from withholding care in the future.
Reporting. Complaint data should be reported uniformly by MCOs to the state and used by the state in selecting MCOs, in negotiating with MCOs, to impose sanctions, and in creating and monitoring corrective action plans. A number of states, including Colorado, Connecticut, Delaware, Maine, Massachusetts, Michigan, Nebraska, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Tennessee, Texas, Vermont, and Washington, already include contract provisions stating that grievance data will be used for quality improvement. In addition, the contracts with MCOs should provide that complaint data will be disclosed publicly, as is the case in Missouri and North Carolina contracts.
Conclusion
Once enrolled in Medicaid managed care, there are a number of decisions that a beneficiary might want to contest. And with thousands of beneficiaries enrolled in managed care, it is impossible that these systems will work perfectly one hundred percent of the time. Currently, managed care programs are using a variety of methods for processing complaints -- varying from informal inquiries with plan administrators to state-level fair hearings before an impartial decision maker. There is interest in some states in implementing group telephone hearings and mediation of disputes. Currently, these activities are associated with the breach of due process and not its observance. To the extent that such processes can be done quickly and without foregoing the constitutional rights of beneficiaries, they may be worthwhile pursing. However, it is critical to recognize that the United States Constitution and Medicaid laws demand that all complaint processing meet minimum requirements, including: a pre-termination notice, the opportunity to review the evidence in the case, an in-person hearing before an impartial decision maker, and a final decision on the dispute within set time frames. These protections, in addition to assuring a fair and objective process for resolving disputes, are needed for the protection of beneficiaries and quality control. States and managed care organizations should begin to honor them immediately.
Endnotes
1. Goldberg v. Kelly, 397 U.S. 245, 267-71 (1970). See 42 U.S.C. § 1396a(a)(3) (1997) (fair hearing before state Medicaid agency required for any individual whose claim is denied or not acted on with reasonable promptness); 42 C.F.R. § 431.200 et seq. (1996) (implementing Medicaid regulations).
2. Daniels v. Wadley, 926 F. Supp. 1305, 1308 (M.D. Tenn. 1996).
3. Grijalva v. Shalala, 946 F. Supp. 747, 758 (D. Ariz. 1996).
4. Daniels, 926 F. Supp. at 1308.
5. 42 C.F.R. § 434.32 (1996).
6. Daniels, 926 F. Supp. at 1312.
7. J.K. v. Dillenberg, 836 F. Supp. 694, 699 (D. Ariz. 1993). See also Daniels v. Wadley, 926 F. Supp. 1305 (M.D. Tenn. 1996); Perry v. Chen, No. CV 95-140-TUC-RMB, reported at 1996 WL 159808 (D. Ariz. 1996); Rodriguez v. Chen, No. CV 95-130-TUC-RMB (D. Ariz., Feb. 6, 1996); Everling v. Wynia, No. C6-87-494044 (D. Minn., Apr. 30, 1990) (consent decree). See also Catanzano v. Dowling, 60 F.3d 113 (2d Cir. 1995) (concerning certified home health agencies). Compare Grijalva v. Shalala, 946 F. Supp. 747 (D. Ariz. 1996) (applying due process protections in Medicare managed care settings).
8. Grijalva, 946 F. Supp. at 758.
9. Daniels, 926 F. Supp. at 1312.
10. E.g. Id. at 1313 (quoting Tumey v. State of Ohio, 273 U.S. 510, 523 (1927)); Schweiker v. McClure, 456 U.S. 188, 195-99 (1982) (regarding Medicare Part B hearing process).
11. See 42 C.F.R. § 431.244(f) (1994); Daniels, 926 F. Supp. at 1305.
12. Grijalva, 946 F. Supp. at 753.
13. Mathews v. Eldridge, 424 U.S. 319, 334 (1976).
14. 42 U.S.C. § 1396a(a)(19).