Medicare+Choice Appeal Procedures: Reconciling Due Process Rights and Cost Containment

Jennifer E. Gladieux

doi:10.1017/S0098858800009497

1 See 42 U.S.C. § 1395(1992).

2 See Medicare Program; Establishment of the Medicare+Choice Program; Final Rule, 63 Fed. Reg. 34,968 (1998) [hereinafter Mega-Reg]. This regulation is an interim final rule effective on July 27, 1998. See id. The Mega-Reg is binding on Medicare risk contracting arrangements, but is subject to change. See id. The comment period ended September 24, 1998. See id.

3 Prior to the passage of Balanced Budget Act of 1997, Pub. L. No. 105-33, 111 Stat. 251 (BBA), persons enrolling in the Medicare Program had two basic coverage options: traditional fee-for-service (FFS) or enrollment with a managed care organization (MCO) that had entered into a direct contract with Medicare. See 42 U.S.C. § 1395mm(b) (1994). Under the BBA sec. 4001, § 1851(a)(2), three types of MCOs have the authority to contract with Medicare: an entity having a risk contract with Medicare such as a health maintenance organization (HMO), an entity having a cost contract directly with Medicare, or a health care prepayment plan having a cost contract to provide Medicare Part B services.

4 Even with a balanced budget, the need to restructure Medicare continues. See Rochelle Sharpe, Greenspan Addresses Medicare Overhaul; Fed Chief Says Cost Cutting Found in Private Market May Help Ailing System, Wall St. J., Apr. 21, 1998, at A2 (stating the Congressional Budget Office forecasts Medicare to grow at 7.5% per year for the next decade).

5 For further discussion of the options considered during the passage of BBA, see H.J. Aaron & R.D. Reichauer, The Medicare Reform Debate: What is the Next Step? Health Aff., Winter 1995, at 8, and P.M. Ellwood & A.C. Enthoven, Responsible Choices: The Jackson Hole Group Plan for Health Reform, HEALTH AFF., Summer 1995, at 24.

6 The BBA sec. 4001 provides for a new type of Medicare plan: the Medicare+Choice plan. There are several kinds of Medicare+Choice plans: (a) coordinated care plan; (b) combination Medical Savings Account and a high-deductible plan (offered on a demonstration basis only); and (c) Medicare+Choice private FFS plans. See BBA sec. 4001, § 1851. The plan must permit selection of any willing provider. See id. § 1859(b)(2)(C). Payments for services (including deductibles, coinsurance, copayments and balance billing) to Medicare providers or suppliers may not exceed 115% of the provider's or supplier's Medicare contract rate. See id.

7 By allowing flexibility in contracting requirements and payment methods, Medicare+Choice will be able to test the receptivity and suitability of delivery system innovations. See General Accounting Office, Medicare Managed Care: Growing Enrollment Adds Urgency to Fixing HMO Payment Problem 16 (1996) [hereinafter Growing Enrollment Adds Urgency].

8 Preferred provider organizations (PPOs) are defined as joint ventures that entail contractual agreements to deliver care to a defined group of patients at discounted FFS rates and to submit to certain controls and utilization or membership restrictions based on quality and utilization criteria. See Barry R. Furrow et al., Health Law 526 (3d ed. 1997).

9 Section 4001 of the BBA broadly defines a provider sponsored organization (PSO) as any “public or private entity that (A) is established or organized, and operated, by a health care provider, or group of affiliated health care providers, (B) provides a substantial proportion … of the health care items and services under the contract under this part directly through the provider or affiliated group of providers, and (C) with respect to which the affiliated providers share, directly or indirectly, substantial financial risk with respect to the provision of such items and services and have at least a majority financial interest in the entity.” BBA sec. 4001, § 1855(d)(1). The Department of Health and Human Services (HHS) attempted to further clarify the definition of PSOs in Medicare Program; Definition of Provider-Sponsored Organization and Related Requirements, 63 Fed. Reg. 18,124 (1998). In PSOs, the health care providers must control not only health care decisions but also administrative decisions. See id. at 18,127. Control is defined in 42 C.F.R. § 422.350(b) as having the “power, directly or indirectly, to direct or influence significantly the actions or policies of an organization or institution.” Id. at 18,126. The rulemaking also created 42 C.F.R. § 422.352(b), which defines substantial proportion as “(1) For a non-rural PSO, not less than 70% of Medicare items and services covered under the contract, [and] (2) For a rural PSO as defined in 422.354, not less than 60% of Medicare items and services covered under the contract.” Id. at 18,135.

10 Health Care Financing Administration (HCFA) defines an integrated delivery system (IDS) as “health care delivery systems that are owned or controlled and operated by a provider or group of providers within a community… . [IDSs] are most commonly formed by physicians and hospitals and can provide an array of health care services to patients under a variety of payment mechanisms, including risk-sharing arrangements through contracts with HMOs.” 63 Fed. Reg. at 18,125.

11 In the Medicaid section of the BBA, sec. 4701(a)(2), primary care case management is defined as “case-management related services (including locating, coordinating, and monitoring of health care services) provided by a primary care case manager under a primary care case management contract” and a primary care case manager is defined as a “physician, a physician group practice, or an entity employing or having other arrangements with physicians to provide such services.”

12 See Growing Enrollment Adds Urgency, supra note 7, at 1 (1996) (fixing cost saving recoupments is important in light of “recent deficit reduction proposals aimed at slowing Medicare spending growth by moving more beneficiaries into managed care”).

13 Medicare risk contracting added over 100,000 beneficiaries in April 1997 in an unprecedented growth spurt with midsize plans in nontraditional managed care states. See Health Market Survey, May 9, 1997, at 3.

14 Id. at 5. Congress began allowing HMOs to enroll Medicare beneficiaries on a risk contract basis without retrospective cost adjustment in 1982 with the passage of the Tax Equity and Fiscal Responsibility Act. See Pub L. No. 97-248, 96 Stat. 324 (1982).

15 Health Market Survey, supra note 13, at 4. This broad geographic growth trend is a recent phenomenon. See General Accounting Office, Medicare HMOs: Rapid Enrollment Growth Concentrated in Selected States (1996). Medicare risk contractor enrollment has traditionally been highly concentrated geographically and by health plan. See id. In 1995, 55% of Medicare risk enrollees lived in just two states, Florida and California, and ten HMOs accounted for 44% of total Medicare risk enrollment. See id.

16 See Growing Enrollment Adds Urgency, supra note 7, at 8, 10 (1996) (stating that the [adjusted average per capita’ cost] formula may discourage plan participation by setting payments that are too low in some areas and by causing rates to vary greatly both among geographic areas and over time); GENERAL ACCOUNTING OFFICE, MEDICARE: CHANGES IN HMO RATE SETTING METHOD ARE NEEDED TO REDUCE PROGRAM COSTS 20 (1994) (suggesting a risk-adjusted capitated payment system to reduce HMOs’ financial incentive to enroll only healthy patients). Congress has attempted to address these geographic and demographic payment problems in the BBA by amending § 1853 of the Social Security Act to pay risk contractors in the Medicare+Choice program a blended capitated rate that reflects area-specific characteristics. See W. Pete Welch, Growth In HMO Share Of The Medicare Market, 1989-1994, Health Aff., Fall 1996, at 201 (using data to show that payment rate reform is likely to have only a modest impact on Medicare HMO growth in the short term).

17 While the payment methodology problem is being addressed by Congress either by lowering the payment percentage from 95% to 90% of FFS in some areas or using competitive bidding, “[tjhere is another, more fundamental problem with Medicare risk plans: Medicare beneficiaries don't seem eager to join them, and if they do enroll, many of them don't want to stay.” Marcia Angell, Fixing Medicare, 337 N. ENG. J. Med. 192, 193 (1997).

However, a recent Kaiser Foundation report found that “most Medicare beneficiaries enrolled in a Medicare risk plan are satisfied with the availability and quality of care they receive.” Harriet Komisar et al., Medicare Chart Book 74 (1997). “Indeed, 74.4% of Medicare risk plan enrollees would recommend their plan to a family member or friend.” Id. Of Medicare risk plan enrollees in fair or poor health, only 8.8% felt they were not referred to a specialist when they needed it and only 5.6% felt they were not referred to needed home health services. See id. In another survey of consumer satisfaction, a vast majority of Medicare beneficiaries enrolled in risk plans were satisfied with their care, but one in four would not recommend their plan to someone with a serious or chronic health problem. See Lyle Nelson et al., Access to Care in Medicare HMOs 1996, HEALTH AFF., Mar./Apr. 1997, at 148, 155.

18 In making payments to affiliated providers and physicians, prepaid health plans … commonly use financial arrangements that incorporate an incentive to utilize health resources efficiently. Some believe these incentives, which are designed to achieve quality outcomes without overutilizing the health care system, could have the untoward result of underutilization or failure to furnish medically necessary covered services in some situations. Thus, an important protection for beneficiaries enrolled in HMOs … is the right to appeal denials of care (also known as preservice denials) and to seek reimbursement for the costs of services received out of plan following a preservice denial.

Medicare Program; Establishment of an Expedited Review Process for Medicare Beneficiaries Enrolled in Health Maintenance Organizations, Competitive Medical Plans, and Health Care Prepayment Plans, 62 Fed. Reg. 23,368, 23,371 (1997) (final rule with comment period) [hereinafter Expedited Review]. For an example of a patient who suffered through the process of a preservice service denial, see George Anders, Don ‘t Take No … If at first they turn you down, try, try again, WALL ST. J., Oct. 24, 1996, at R16 (relating one patient's story of trying to obtain payment for post-heart surgery physical therapy from his HMO).

19 See Office of Inspector General, Department of Health and Human Services, OEI-06-95-00430, Beneficiary Perspectives of Medicare Risk HMOs 9 (Mar. 1998) [hereinafter Beneficiary Perspectives]. In 1996, 27% of enrolled beneficiaries were unaware of their rights to appeal a payment or coverage issue. See Office of Inspector General, Department of Health and Human Services, OEI-07-94-00281, Medicare HMO Appeal and Grievance Processes: Beneficiaries’ Understanding 5 (Dec. 1996). See id. These levels are higher than in 1993 when only 25% of enrolled beneficiaries were unaware of their rights. See id.

20 In 1996, 36% of those who did file appeals perceived that their complaint, was handled unfairly. See Beneficiary Perspectives, supra note 19, at 10.

21 See generally Grijalva v. Shalala, 946 F. Supp. 747 (D. Ariz. 1996), aff'd, Grijalva v. Shalala, 152 F.3d 1115 (9th Cir. 1998) (rehearing en banc denied Nov. 11, 1998).

22 See Medicare Program; Appeals of Individual Claims, 62 Fed. Reg. 25,844, 25,844 (1997) (final rule with comment period) [hereinafter Individual Appeals]; Expedited Review, supra note 18.

23 946 F. Supp. 747 (D. Ariz. 1996), aff'd, Grijalva v. Shalala, 152 F.3d 1115 (9th Cir. 1998).

24 See Mega-Reg, supra note 2.

25 See 29 U.S.C. §§ 1001-1461 (1994). The Employee Retirement Income Security Act (ERISA) was intended to preempt the state regulation of employer benefit plans. See 29 U.S.C. § 1144(a) (1996) (“provisions of this title … shall supercede any and all state laws insofar as they may now or hereafter relate to any employee benefit plan”).

26 See 42 U.S.C. § 1395mm(c)(2)(A) (1994).

27 See id. Usually, Medicare risk contractors offer additional benefits at no charge or for an additional charge. Enrollment in a Medicare risk contract is a voluntary choice made by the beneficiary. See Health Care Financing Administration, Handbookette—Patient Rights (visited Feb. 26, 1999) <http://www.medicare.gov/publication/yourmb.pdf>. In 1997, the extra benefits available from Medicare risk plans most often included preventive services such as annual physicals, eye and ear exams and immunizations. See KOMISAR ET AL., supra note 17, at 68. Outpatient prescription drugs were offered by 69% of Medicare risk plans. See id.

28 See 42 U.S.C. § 1395d(a) (1994).

29 See id. § 1395k(a)(2), (x).

30 Id. § 1395mm(c)(4).

31 Id. § 1395mm(c)(5)(A). Note that a grievance is a procedure internal to an HMO regarding the quality of services received and includes issues such as the HMO's failure to provide services in a timely manner. See Health Care Financing Administration, U.S. Department of Health and Human Services, Medicare Health Maintenance Organization/Competitive Medical Plan Manual §§ 2400.2(b), 2400.4, 2410 (1997) (CCH) [hereinafter HMO/CMP MANUAL]. HMO S do not have to report grievances to the federal government. See Joe Baker, Medicare Health Maintenance Organizations: Nuts and Bolts, 253 PLI/EST 99, 113 (July 1997). In comparison, an appeal occurs when the HMO denies access to treatment, denies authorization for outside care, or denies reimbursement for urgent or emergency services. See id. Before an appeal can occur, an HMO must make an initial denial determination known as an organization determination and provide the beneficiary with notice of the denial. See id.; HMO/CMP Manual, supra, at § 2403.1. After an appeal, a beneficiary may then request a reconsideration by the HMO. See Baker, supra, at 113; 42 C.F.R. § 417.616(a) (1997). The beneficiary may then appeal to an administrative law judge (ALJ) and for judicial review if the amount in controversy requirements are met. See Baker, supra, at 113.

32 For an excellent graphic depiction of the FFS grievance and appeal procedure and the cumulative time it takes for an appeal to reach a federal district court, see General Accounting Office, Medicare: Increased HMO Oversight Could Improve Quality and Access to Care 15 (1995) [hereinafter Increased HMO Oversight].

33 Reconsiderations and appeals for Part B claims are covered by 42 C.F.R. §§ 405.801—.812 (1992). This section only considers the regulations in effect as of 1992, before Grijalva. The procedures for Part A and Part B of Medicare are essentially the same. See Gray Panthers v. Schweiker, 652 F.2d 146, 149 n.6 (D.C. Cir. 1980).

34 See 42 C.F.R. §417.600.

35 See 42 C.F.R. § 417.606(a)(1).

36 See id. §417.630.

37 See id. §417.636.

38 Gray Panthers, 652 F.2d at 149 (assessing identical provisions pertaining to initial coverage denials rendered by Medicare carriers).

39 42 C.F.R. § 417.606(a).

40 See id. § 417.608(a). Unlike the FFS system where coverage is determined after services are rendered, the HMO system generally entertains an enrollee's request for medical services prior to rendering care, although exceptions to the HMO prospective payment system do exist where emergency, urgent care, and out-of-area services are at issue. Therefore, HCFA requires that the initial determination notice issue when a member requests payment or services. See HMO/CMP MANUAL, supra note 34, § 2403.2.

41 See 42 C.F.R. § 417.608(b).

42 See id. § 417.608(c).

43 See id. §417.612.

44 See id. §§ 417.614, 417.616(a)-(b).

45 Id. §417.618.

46 Id. § 417.620(b)(1).

47 See id. § 417.620(b)(2). The enrollee need not provide a written request to obtain this external review. See Expedited Review, supra note 18, at 23,370. HCFA had formerly contracted with Network Design Group to make its reconsidered determination within 30 days.

48 See 42 C.F.R. § 417.624(a).

49 See id.

50 See id. § 417.624(b)(l)-(2).

51 See id. § 417.624(b)(3).

52 See id. §417.626.

53 See id. § 417.632. This procedure essentially duplicates the same procedure FFS Medicare beneficiaries follow. See generally Expedited Review, supra note 18, at 23,369.

54 See 42 C.F.R. § 417.634 (1992).

55 See id. § 417.636(a)(2) (1992).

56 See Anders, George, Medicare HMOs Get Fewer Complaints—But Some Big Plans Still Draw Large Share of Gripes, Wall St. J., Mar. 4, 1996Google Scholar, at B3.

57 Id.

58 See id.

59 See id.

60 See id.; see also Mark A. Hall et al., Judicial Protection of Managed Care Consumers: An Empirical Study of Insurance Coverage Disputes, 26 Seton Hall L. Rev. 1055 (1996) (finding that very few disputes in the managed care setting reach the court system).

61 See Anders, supra note 56, at B3.

62 See Managed Care Resource Information Directory, Section I: Beneficiary Rights and Information, Health Care Financing Administration (visited Feb. 26, 1999) <http://www.hcfa.gov/medicare/.mancptOl.htm.tmp>.

63 See id.

64 See id.

65 This category also includes durable medical equipment.

66 See id.

67 See 42 C.F.R. § 422.66 (1998). Retroactive disenrollment must be approved by HCFA. See id.

68 Lock-in provisions generally stipulate that “HMO members only have coverage for services received from physicians, hospitals and other health care providers in the HMO's network, except for emergency and urgent care received outside their service area and for emergency care received within their service area.” See Baker, supra note 31, at 109.

69 See id. at 107.

70 See id.

71 See id.

72 See Morgan, Robert O. et al., The Medicare-HMO Revolving Door—The Healthy Go in and the Sick Go Out, 337 N. Eng. J. Med. 169, 174 (1997)CrossRef Google Scholar PubMed. In this study of Medicare risk contractor disenrollment and reenrollment, the researchers found that “there was a concentrated period of use of inpatient services immediately after disenrollment from HMOs, with reenrollment occurring at about the same time that the admission rate approximated the standardized rate for the Medicare beneficiaries who remained in the fee-for-service system.” Id. at 173. The study concluded that this suggests beneficiaries “move into the fee-for-service system in order to obtain needed services, returning to Medicare HMOs after they have obtained those services.” Id. at 174. This bias in enrollment could be used by Medicare risk contractors to game HCFA's payment methodology and avoid having to pay for high-cost services.

A proposed partial solution is to change the payment methodology to competitive bidding. See id. The BBA sec. 4001, amending § 1851(e) and (f) of the Social Security Act, also addresses this problem. Under the Medicare+Choice coordinated care plans, Medicare beneficiaries’ opportunities to change their enrollment will be strictly limited. See BBA § 4001(c). After choosing coverage during the election period, beneficiaries will be permitted to change their plans only at the beginning of their coverage period, initially set at six months. See id. The effect is that Medicare+Choice enrollees will be unable to engage in strategic behavior because they will have only one opportunity within each coverage period to change their plan.

73 See generally Rodwin, Marc A., Consumer Protection and Managed Care: Issues, Reform Proposals, and Trade-offs, 32 Hous. L. Rev. 1319, 1348 (1996)Google Scholar (suggesting that the problem of grievance and appeal procedures became more evident because of the expansion of managed care, but was not caused by managed care).

74 See id. at 1349.

75 See id.

76 George Annas, Patients’ Rights in Managed Care—Exit, Voice, and Choice, 337 N. ENG. J. Med. 210, 213(1997).

77 946 F. Supp. 747 (D. Ariz. 1996).

78 The district court judge certified the plaintiffs as a class. See Grijalva v. Shalala, Medicare & Medicaid Guide (CCH) 43,523, at 45,476 (Aug. 24, 1995). Therefore, more than four million Medicare beneficiaries may be affected by this litigation. See Abstract, HHS Must Ensure That Medicare Beneficiaries Enrolled in HMOs Are Informed of Service Denials and Appeal Rights, 31 Clearinghouse Rev. 178,179(1997).

79 See Grijalva, 946 F. Supp. at 749.

80 See id.

81 See id. at 751.

82 See id. at 760.

83 See id.; infra note 215-15 and accompanying text.

84 See Grijalva, 946 F. Supp. at 751-52.

85 See id. at 760.

86 Id. at 756 (citing Mathews v. Eldridge, 424 U.S. 319 (1976)).

87 See id.

88 See id.

89 Id. at 757. The court found it significant that managed care Medicare beneficiaries had “no expedited appeal mechanism for acute medical care decisions.” Id. at n.33.

90 See id. at 759.

91 See id. at 758.

92 See id.

93 See id.

94 See id. at 759 (discussing 42 U.S.C. § 1395mm(i)(7)).

95 See id. at 759-60.

96 See id. at 753. The court declined to consider a Medicare enrollee's ability to disenroll from a Medicare risk contractor and to reenroll with a FFS provider for relief. See id. at n.8. “Such freedom of choice might serve to resolve disputes between treating physicians, but it would be poor public policy to offer such relief for service denials based on Medicare coverage determinations.” Id.

97 See id. at 755.

97 See id. at 753.

99 See id. at 760-61 (according to 42 U.S.C. § 1395mm(c)(l) and HMOs must meet certain notice and hearing requirements).

100 Grijalva v. Shalala, Medicare & Medicaid Guide (CCH) 1 45,124, at 53,175, 53,176 (Mar. 27, 1997).

101 Id. (citations omitted).

102 See id.

103 Id.

104 Id. at 53,176-177 (citations omitted).

105 See id.

106 See AARP, Other Consumer Health Groups File Amici Brief in HMO Appeals Case, Health Care Daily (BNA) (Sept. 5, 1997).

107 See id.

108 Pub. L. No. 104-191, 110 Stat. 1936 (1996).

109 See Health Insurance Portability and Accountability Act of 1996 (HIPAA), Pub. L. No. 104-191, § 215, 110 Stat. 1936, 2005 (1996).

110 See id.

111 See Individual Appeals, supra note 22, at 25,844 (codified at 42 C.F.R. §§ 405, 417, 473).

112 See Expedited Review, supra note 18, at 23,368 (codified at 42 C.F.R. § 417).

113 Individual Appeals, supra note 22, at 25,847. The rule clarifies changes to 42 C.F.R. §§ 417, 473(1998). See id.

114 See id. at 25,845 (discussing § 1869 of the Social Security Act).

115 See id.

116 See id.

117 See id. (discussing § 1876(c)(5)(B) of the Social Security Act). This section requires that the amount in controversy must be at least $100 to merit an administrative hearing before an ALJ and $1000 for judicial review. See id.

118 865F.2d468(2dCir. 1989).

119 See Individual Appeals, supra note 22, at 25,847. The carrier hearing process is a special procedure whereby a claims processor (under contract with HCFA) reviews the written documentation submitted by a health care provider to determine whether services rendered are reimbursable under the Medicare Program. Providers may appeal coverage decisions made by claims processors. For further discussion of the carrier hearing process, see General Accounting Office, Medicare Appeals Process: Part B Changes Appear to be Fulfilling Their Purpose (July 16, 1990). The U.S. Supreme Court has ruled that the carrier hearing process satisfied the due process rights of the U.S. Constitution. See Schweiker v. McClure, 456 U.S. 188, 200 (1982).

120 See Individual Appeals, supra note 22, at 25,847.

121 See id.

122 See Expedited Review, supra note 18, at 23,369; see generally supra Part II (describing the grievance and appeal procedures for dissatisfied Medicare enrollees).

123 See Expedited Review, supra note 18, at 23,369 (altering its implementation of 42 U.S.C § 1395mm(c)(5)). HCFA also pointed to the need for an expedited process to address certain preservice denials, as well as reductions and discontinuations of service in certain time-sensitive circumstances, is further supported by reports and studies. See Increased HMO Oversight, supra note 32, at 15.

A representative for the American Association of Retired Persons (AARP), Cheryl Matheis, stated that the sole motivating factor precipitating the new regulations is the Grijalva case: “[t]he agency was afraid the court might rule against it. At least it showed good faith by doing it on its own.” Medicare Coverage; New Rules, New Procedures, New Disputes, 26 Medical Utilization Management (IAC) (Jan. 15, 1998).

124 See Expedited Review, supra note 18, at 23,369.

125 See id. at 23,369-70.

126 See id. at 23,370.

127 Id. at 23,369.

128 See id. at 23,369-370.

129 See id. at 23,370.

130 Id. “Thus, expedited reviews could occur in 24 hours, 48 hours or another appropriate time period. Similarly, an expedited organization determination to deny a service could be issued in 48 hours, but the expedited reconsideration could take the full 72 hours allotted for making a determination.” Id.

131 Id.

132 See id.

133 See id.

134 See id.

135 See id.

136 See id.

137 See id.

138 See id.

139 See id.

140 Id.

141 See id.

142 See id.

143 See id.

144 See id.

145 See id.

146 See id. Currently, HCFA's contractor “has an expedited process for time-sensitive situations involving preservice denials and terminations of coverage.” Id. As part of this rulemaking, this process will be reviewed for possible improvement and assess the need for contract modification. See id.

147 See id.

148 See id.

149 See id.

150 See id.

151 Id.

152 See id. at 23,370-371; see also discussion infra Part V.B.

153 Expedited Review, supra note 18, at 23,369.

154 Id.

155 See id.

156 See id.

157 See id.

158 See id.

159 See id.

160 Id. at 23,370-71.

161 See id. at 23,371.

162 See id.

163 See id.

164 See id.

165 See id. at 23,370.

166 Id. at 23,371.

167 Health Care Financing Administration, Clinton Administration Guarantees Rapid Response to Medicare Beneficiaries’ Appeals of Treatment Denials (visited Feb. 26, 1999) <http://www.hcfa.gov/news/n970429.htm> (press release of Donna Shalala, HHS Secretary).

168 See Medicare HMO Regulation Consistent with Arizona Decision, Vladeck Says, BNA HEALTH CARE DAILY, Mar. 20, 1997 (Bruce C. Vladeck, former Administrator, HCFA).

169 Clinton Administration Guarantees Rapid Response to Medicare Beneficiaries’ Appeals of Treatment Denials, supra note 167.

170 See A Comparison of HCFA ‘s New Medicare Managed Care Expedited Appeal Regulations and Grijalva v. Shalala (visited Feb. 26, 1999) <http://www.nsclc.org/compare3.html>.

171 See id.

172 See id.

173 See Lisa M. Rockelli, HCFA Rule on HMO Appeals Fails to Comply with Court Order, Beneficiary Groups Say, Health Care Pol'y Rep. (BNA) (May 12, 1997).

174 See id.

175 See id. ™Id.

177 See id.

178 Grijalva v. Shalala, 946 F. Supp. 747 (9th Cir. 1998).

179 These groups are the AARP, Citizen Action, Families USA, American Federation of State, County and Municipal Employees, American Nurses Association, Brain Injury Association, California Advocates for Nursing Home Reform, Citizen Advocacy Center, Coalition of Advocates for the Rights of the Infirmed Elderly, Consumer Coalition for Quality Health Care, Gerontological Society of America, National Association of Protection and Advocacy Systems, National Multiple Sclerosis Society, National Osteoporosis Foundation, National Senior Citizens Law Center and the Older Women's League.

180 Brief of the American Association of Retired Persons and Other Groups Listed on Inside Cover as Amici Curiae in Support of Appellees at 9, Grijalva (No. 97-15877).

181 See id. at 30.

182 See id.

183 See id.

184 Id. at 31.

185 See id. at 32-33.

186 Id. at 11.

187 Id. at 12.

188 Id. (emphasis in original).

189 See generally Office of Inspector General, HHS, Medicare HMO Appeal and Grievance Processes: Overview (Dec. 1996) (discussing results of a study of HCFA's appeal procedures); Office of Inspector General, HHS, Medicare HMO Appeal and Grievance Processes: Beneficiary's Understanding (Dec. 1996) (same).

190 Brief of the Appellant in Grijalva v. Shalala at 16 (No. 97-15877).

191 Id.

192 See id. at 17.

193 See id.

194 Id.

195 See id.

196 See id. at 18.

197 Id.

198 Id.

199 Id.

200 See Grijalva v. Shalala, 152 F.3d 1115, 1121 (9th Cir. 1998).

201 See id.

202 See id. at 1122.

203 Id. at 1122-23.

204 See id. at 1123.

205 See id. at 1123-24; supra note 101 and accompanying text.

206 See id. at 1123-24; supra note 104 and accompanying text.

207 See Grijalva v. Shalala, 152 F.3d at 1123.

208 Id.

209 See id. at 1124.

210 HHS filed a petition for review of the Ninth Circuit's decision in Grijalva v. Shalala with the Supreme Court. See Lisa M. Rockelli, Medicare: HHS Seeks Supreme Court Review of Grijalva Managed Care Case, Health Care Daily Rep. (BNA) available in LEXIS, News Library, BNAHCD File (Feb. 18, 1999). The petition primarily discusses the issues of government action and due process.

211 See Grijalva, 946 F. Supp. 747, 751-52 (D. Ariz. 1996).

212 Id. at 755.

213 See Sullivan v. Barnett, 139 F.3d 158 (3d Cir. 1998); Catanzano v. Dowling, 60 F.3d 113 (2d Cir. 1995); Giron v. Corrections Corp. of Am., 14 F. Supp. 2d 1245 (D.N.M. 1998); J.K. v. Dillenberg, 836 F. Supp. 694 (D. Ariz. 1993).

214 Blum v. Yaretsky, 457 U.S. 991, 1004 (1982). See Jackson v. Metropolitan Edison Co., 419 U.S. 345 (1974) (holding that the public utility company's decisions are not state action).

215 For further discussion of how the court might decide the state action issue, see Henry C. Strickland, The State Action Doctrine and the Rehnquist Court, 18 HASTINGS CONST. L.Q. 586 (1991).

216 See generally Fondacaro, Mark R., Toward a Synthesis of Law and Social Science: Due Process and Procedural Justice in the Context of National Health Care Reform, 72 Denv. U. L. Rev. 303 (1995)Google Scholar (discussing various legal aspects of procedural due process, including constitutional issues); Carol S. Jimenez, Medicare HMOs: A Consumer Perspective, 26 Seton Hall L. Rev. 1195 (1996) (discussing due process protection given to Medicare enrollees and gaps in those protections); Timothy S. Jost, Administrative Adjudication Under Health Care Reform, 47 Admin. L. Rev. 425 (1995) (discussing the interaction between health care and administrative law); Eleanor D. Kinney, Medicare Managed Care from the Beneficiary's Perspective, 26 Seton Hall L. Rev. 1163 (1996) (discussing Medicare and efforts to reform the program with respects to how to protect beneficiaries rights); Eleanor D. Kinney, Procedural Protections for Patients in Capitated Health Plans, 22 Am. J.L. & Med. 301 (1996) (discussing constitutional law governing public and private capitated health plans); Eleanor D. Kinney, Protecting Consumers and Providers Under Health Reform: An Overview of the Major Administrative Law Issues, 5 Health Matrix 83 (1995) (reviewing constitutional and administrative law principles that affect health care).

217 See supra note 101 and accompanying text.

218 See supra note 104 and accompanying text.

219 Congress stated its intent that HCFA develop and monitor grievance and appeal procedures when Congress first permitted HCFA to contract with HMOs for the Medicare population. See supra note 12 and accompanying text. Congress has also stated its preference for HCFA to implement grievance and appeal procedures in the Medicaid program. See discussion infra Part IV.C. The delegation of authority to HCFA is again reiterated by Congress in the BBA. See discussion infra Part IV.A.

220 See Grijalva v. Shalala, 946 F. Supp. at 761.

221 See infra Part V.B.3.

222 See BBA sec. 4002(B) (§ 1876 of the Social Security Act is also known as the Federal HMO Act).

223 See supra notes 7-11 and accompanying text for a discussion of the different types of delivery options HHS can use under Medicare+Choice.

224 The Court of Appeals for the Ninth Circuit alluded to this in its decision. See supra note 208 and accompanying text. The Grijalva decision may be moot because Congress, in passing the BBA, specified the timeframes for appeal procedures. See supra Part III.B.2.

225 See supra notes 108-110 and infra notes 399-405and accompanying text for a discussion of HIPAA monetary sanctions.

226 See generally Gordon Bonnyman, Jr. & Michele M. Johnson, Unseen Peril: Inadequate Enrollee Grievance Protections in Public Managed Care Programs, 65 Tenn. L. Rev. 359 (1998) (discussing the costs and benefits of appeal procedures).

227 See Implementation of HCFA ‘s Quality Improvement System for Managed Care (QISMC) Interim Standards and Guidelines, OPERATIONAL POLICY LETTER #72 (Sept. 30, 1998), (visited Feb. 26, 1999) <http://www.hcfa.gov/medicare/OPL072.htm>; see also Part V.B.3 infra.

228 See Mega-Reg, supra note 2, at 34,968. This regulation is an interim final rule effective on July 27, 1998. See id. As such, the Mega-Reg is binding on Medicare risk contracting arrangements, but is subject to change. The comment period ended September 24, 1998. See id.

229 See generally id.

230 See id. at 35,109.

231 BBA sec. 4001, § 1852(g), describes the grievance mechanisms: “[e]ach Medicare+Choice organization must provide meaningful procedures for hearing and resolving grievances between the organization (including any entity or individual through which the organization provides health care services) and enrollees with Medicare+Choice plans of the organization under this part.”

232 See Mega-Reg, supra note 2, at 35,107 (codified at 42 C.F.R. § 422.560(b)(1)).

233 Id. (codified at 42 C.F.R. § 422.566(a)).

234 See id. (codified at 42 C.F.R. § 422.564).

235 See id. (codified at 42 C.F.R. § 422.562(b)(iii)). For a further discussion of the difference between internal and external appeal procedures, see infra note 280-87 and accompanying text.

236 See id. (codified at 42 C.F.R. § 422.580).

237 See id. (codified at 42 C.F.R. § 422.561).

238 See id. at 35,021.

239 Id. at 35,108 (codified at 42 C.F.R. § 422.566(b)).

240 See id. (codified at 42 C.F.R. § 422.566(c)).

241 See BBA § 4001(g)(3)(A); Mega-Reg, supra note 2, at 35,108 (codified at 42 C.F.R. § 422.570(a), (b)).

242 See BBA § 4001(g)(3)(B); Mega-Reg, supra note 2, at 35,108 (codified at 42 C.F.R. § 422.570(c)(2)). Note the similarity between these procedures and HHS's Expedited Review Rule discussed in Part I1I.B.2.

243 See Mega-Reg, supra note 2, at 35,109 (codified at 42 C.F.R. § 422.572(a)). If expedited review is denied, the Medicare+Choice organization must refer the case to an outside reviewer and notify the beneficiary orally within 2 days and follow up with a written letter explaining (1) the process for a 14-day standard review; (2) the right to file a grievance; and (3) provide timeframes for grievances. See id. at 35,108 (codified at 42 C.F.R. § 422.570(d)(2)).

244 See id. at 35,109 (codified at 42 C.F.R. § 422.572(b), (d)).

245 See id. (codified at 42 C.F.R. § 422.572(e)). Medicare+Choice organizations must inform enrollees annually of appeal procedures as well. “A Medicare+Choice organization shall disclose, in clear, accurate, and standardized form to each enrollee with a Medicare+Choice plan offered by the organization under this part at the time of enrollment and at least annually thereafter, the following information regarding such plan: … All plan appeal or grievance rights and procedures.” BBA sec. 4001, § 1852(c)(1)(H).

246 See Mega-Reg, supra note 2, at 35,109 (codified at 42 C.F.R. § 422.576).

247 See id. (codified at 42 C.F.R. § 422.582(a), (b)).

248 See id. at 35,110 (codified at 42 C.F.R. § 422.590(a)(1)).

249 See id. (codified at 42 C.F.R. § 422.590(a)(2)).

250 See id. (codified at 42 C.F.R. § 422.590(b)).

251 See id. (codified at 42 C.F.R. § 422.590(b)(2)).

252 See id. at 35,109 (codified at 42 C.F.R. § 422.584(a), (b)).

253 See id. at 35,108 (codified at 42 C.F.R. § 422.570(c)).

254 Id. (codified at 42 C.F.R. § 422.570(c)(2)(l)).

255 See id. (codified at 42 C.F.R. § 422.570(c)(2)(ii)).

256 See id. (codified at 42 C.F.R. § 422.570(d)).

257 Id. at 35,110 (codified at 42 C.F.R. § 422.590(d)).

258 See id. (codified at 42 C.F.R. § 422.590(d)(2)).

259 See id. at 35,111 (codified at 42 C.F.R. § 422.592).

260 See id. (codified at 42 C.F.R. §§ 422.600, .602).

261 See id. (codified at 42 C.F.R. § 422.612).

262 “Thus the authority in section 1852(g)(3)(B) has allowed us to retain the recently promulgated regulations on expedited determinations with only a few clarifications and minor technical changes .… “ MegaReg, supra note 2, at 35,026.

263 These timeframes were changed in response to legislative intent. See H.R. Rep. No. 105-217, at 604 (1997). To the extent Congress has indicated the length of time Medicare beneficiaries should have for appeal procedures, the Grijalva decision has been overturned legislatively.

264 See Mega-Reg, supra note 2, at 35,021.

265 See id. at 35,108-109 (codified at 42 C.F.R. § 422.572(a)).

266 See id. at 35,027-028.

267 See id. at 35,028.

268 Id.

269 See discussion infra Part V.A.2.

270 See supra notes 224 and accompanying text, discussing expedited appeals.

271 As a condition of participation as a Medicare risk contractor, Medicare+Choice organizations must comply with HCFA's marketing guidelines. See HCFA, Medicare Managed Care National Marketing Guide (1997). In addition to the model letters and forms, the Guide provides instructions for marketing materials and promotional activities related to the enrollment and retention of members, guidance to health plans regarding sales packages and language that may be used in advertising, and provider promotional activities. See id. The Guide is currently being updated to apply to Medicare+Choice. See id.; see also 42 C.F.R. § 422.80.

272 See supra note 93 and accompanying text.

273 See Mega-Reg, supra note 2, at 35,108 (codified at 42 C.F.R. § 422.570(b)).

274 See id. at 35,110 (codified at 42 C.F.R. § 422.590(d)).

275 See id. at 35,111 (codified at 42 C.F.R. § 422.592).

276 The specificity required by the states varies greatly as to exact grievance procedures that must be in place for consumers. For example, states with strict statutes typically require the state's Commissioner of Insurance to approve their procedures before licensure. Similarly, some states require annual reports. See ALA. Code § 27-21A-10 (1998); ALASKA Stat. § 21.86.100 (Michie 1998); ARIZ. Rev. Stat. § 20-2533 (1998); ARK. Code Ann. § 23-76-116 (Michie 1998); Cal. HEALTH & SAFETY Code § 1368 (West 1998); COLO. Rev. Stat. § 10-16-409 (1998); CONN. Gen. Stat. § 38a-182 (1997); DEL. Code Ann. tit. 18, § 332 (1998); D.C. Code Ann. § 35-4510 (1997); FLA. Stat. Ann. § 641.22 (West 1998); GA. Code Ann. § 32-20A-5 (1998); HAW. Rev. Stat. Ann. § 432D-2 (Michie 1998); IDAHO Code § 41-3918 (1998); 215 III . Comp. Stat. 125/2-1 (West 1998); IND. Code Ann. § 27-13-2-5 (West 1998); IOWA Code Ann. §§ 514B.3, .14 (West 1998); 1998 Kan. Sess. Laws 174 (amending Kan. Stat. Ann. § 40-3203 (1997)); KY. Rev. Stat. Ann. § 304.17A-070 (Michie 1998); LA. Rev. Stat. Ann. §§ 22.2004, .2022 (West 1998); Code ME. R. ch. 850, § 8 (1998); MD. Code Ann., HEALTH-GEN. I § 19-708 (1998); MASS. Gen. LAWS ch. 1761, § 3 (1998); MICH. Comp. LAWS § 333.21031 (1998); MINN. Stat. Ann. §§ 62D.03, .11 (West 1998); Miss. Code Ann. § 83-41-305 (1998); Mo. Ann. Stat. §§ 354.405, .445 (West 1998); MONT. Code Ann. § 33-31-201 (1998); NEB. Rev. Stat. § 44-32,117 (1998); NEV. Rev. Stat. §§ 695C.070, .260 (1998); N.H. Rev. Stat. Ann. § 420-B:ll (1998); N.J. Stat. Ann. §§ 26:2J-3, -12 (West 1998); N.M. Stat. Ann. § 59A-46-3 (Michie 1998); N.Y. PUB. HEALTH LAW § 4402 (McKinney 1998); N.C. Gen. Stat. § 58-67-10 (1998); N.D. CENT. Code § 26.1-18.1-02 (1998); OHIO Rev. Code Ann. § 1751.19 (Anderson 1997); OKLA. ADMIN. Code § 310:655-9-2 (1998); OR. Rev. Stat. § 743.804 (1998); 40 PA. CONS. Stat. Ann. § 1560 (West 1998); R.I. Gen. LAWS §§ 27-41-3, -11 (1998); S.C. Code Ann. §§ 38-33-30, -110 (Law Co-op. 1998); S.D. CODIFIED LAWS § 58-41-6 (Michie 1998); TENN. Code Ann. §§ 56-32-203,-210 (1998); Tex. INS. Code Ann. art. 20A.04 (West 1998); UTAH Code Ann. § 31A-8-205 (1994); VT. Stat. Ann. tit. 8, §§ 5102, 5102a (1993); VA. Code Ann. § 38.2-305 (Michie 1998); WASH. Rev. Code §§ 48.46.030, .100 (1998); W. VA. Code §§ 33-25A-12, -3 (1996); Wis. Stat. § 609.15 (1998); WYO. Stat. Ann. §§ 26-34-103,-112 (Michie 1997).

277 Some states regulate appeal procedures by the type of entity. For example, Maine regulates HMOs, PPOS and utilization review (UR) agents. See ME. Rev. Stat. Ann. tit. 24-A, §§ 2772, 4203, 4211, 4304 (1998). Other states have one law that covers all appeal procedures. For instance, Arizona's UR grievance and appeal procedures apply to all types of health insurers that perform UR, HMOs, PPOs and IDSs. See Ariz. Rev. Stat. Ann. § 20-2501 (West Supp. 1997). Georgia requires grievance procedures be included in the contracts of all managed care plans. See GA. Code Ann. § 33-20A-5 (West Supp. 1998). Other states have similar approaches to comprehensive managed care appeal procedures. See, e.g., 1998 Cal. Legis. Serv. 91 (West); Colo. Rev. Stat. § 10-16-113 (1998); Del. Code Ann. tit. 18, § 332 (West Supp. 1996); Idaho Code §§ 41-3905, -3918 (1998); Ind. Code § 27-8-16-6(1993); 1998 Kan. Sess. Laws 174; VA. Code Ann. §§ 38.2-5803,-5804 (Michie Supp. 1998).

278 The McCarran-Ferguson Act, 15 U.S.C § 1012(a) (1996) provides that the “business of insurance, and every person engaged therein, shall be subject to the laws of the several States which relate to the regulation or taxation of such business.” Preemption of state regulation is not to be inferred from an act of Congress unless the act “specifically relates to the business of insurance.” Id. § 1012(b). See also Union Labor Life Ins. Co. v. Pireno, 458 U.S. 119 (1982) (holding that use of a peer review committee is not the “business of insurance”); Group Life & Health Ins. Co. v. Royal Drug Co., 440 U.S. 205 (1979) (holding that agreements that do not involve underwriting or the spreading of risk are not the “business of insurance”).

279 All HMOs must have at least 5,000 commercial members prior to becoming a Medicare risk contractor. See Social Security Act of 1997, § 1876, 42 U.S.C. § 1395mm(g)(l) (1996). Also no more than fifty percent of the HMO's enrollment may be persons covered by the Medicare or Medicaid programs. See id. § 1395mm(f)(l). Section 4001 of the BBA allows the Secretary to waive this rule “to the extent that the Secretary finds that it is in the public interest” for contract periods beginning after December 31, 1996. See id. § 1395mm(f)(4). Beginning January 1, 1999, the 50% rule and the 5,000 commercial membership requirement will no longer be in effect.

280 See Mary Lord, Patience for a Bill of Rights, U.S. News & World Rep., Oct. 5, 1998, at 10; ARIZ. Rev. Stat. Ann. §§ 20-2533, -2537 (West Supp. 1998); Cal. Health & Safety Code § 1370.4 (West 1998); 3 COLO. Code REGS. § 4-2-17 (1998); Conn. Gen. Stat. § 38a-226c (West Supp. 1998); FLA. Stat. Ann. § 408.7056 (West 1998); Haw. Rev. Stat. §-432E-6 (1998); Ind. Code § 27-8-17-12 (1998); MD. Code Ann., Ins. § 15-10A-02 (1998); Mich. Comp. Laws Ann. § 333.21035 (West Supp. 1998); Minn. Stat. § 62Q.105 (1998); Mo. Rev. Stat. § 376.1387 (West Supp. 1998); N.J. Admin. Code. tit. 8, § 38-8.7 (1998); N.M. Stat. Ann. § 59A-57-4 (Michie 1998); N.Y. Ins. Law § 4910 (McKinney 1998); N.C. Gen. Stat. §§ 58-50-61,-62 (1998); Ohio Rev. Code Ann. § 1751.19 (Banks-Baldwin 1998); 1998 P. Laws. 68 § 2162; R.I. Gen. LAWS § 23-17.12-10 (1998); Tenn. Code Ann. § 56-32-227 (1998); Tex. Ins. Code Ann. § 20A.12A (West 1998); VT. Stat. Ann. tit. 8, § 4089A(a) (1998). The California, Ohio and Vermont laws do not mandate an external grievance procedures for all HMO members, rather they are limited to distinct groups. Also, parts of the Texas bill were recently found to be preempted by ERISA. See Corporate Health Ins. v. Texas Dept. of Ins., 12 F. Supp. 2d 597 (S.D.Tex. Sept. 18, 1998).

281 See Peter R. Kongstvedt, Member Services and Consumer Affairs, in Essentials of Managed Health Care 378, 386 (Peter R. Kongstvedt ed., 2d ed. 1997).

282 See supra Part III.D.

283 See Tracy E. Miller, Center Stage on the Patient Protection Agenda: Grievance and Appeal Rights, 26 J.L., Med. & ETHICS 89, 92 (1998).

284 See id.

285 See id.

286 See id.

287 See id.

288 Fla. Stat. Ann. § 641.21(e) (West 1996).

289 Fla. Admin. Code Ann. r. 4-191.066(b) (1998).

290 See supra Part III.B.l.

291 See FLA. Stat. Ann. § 641.511 (1), (7) (West Supp. 1999).

292 See id. §641.511(8).

293 See id. § 641.51 l(4)(d).

294 See Health Care—Managed Health Care Entities—Regulation, Registration, and Exemptions, 1997 Fla. Sess. Law Serv. Ch. 97-159 (West).

295 See id.

296 See id.

297 See id.

298 FLA. Stat. Ann. § 641.47(5) (West Supp. 1999).

299 Id. §641.47(10).

300 Id. §641.47(17).

301 See id. § 641.511.

302 See id. § 641.51 l(3)(a) requires the grievance procedures to provide “[a]n explanation of how to pursue redress of a grievance.”

303 See id. § 641.51 l(3)(b), (c) requires the grievance procedures to provide:

“[t]he names of the appropriate employees or a list of grievance departments that are responsible for implementing the organization's grievance procedure. The list must include the address and the toll-free telephone number of each grievance department, the address of the agency and its toll-free telephone hotline number, and the address of the Statewide Provider and Subscriber Assistance Program and its toll-free telephone number” and “[t]he description of the process through which a subscriber may, at any time, contact the toll-free telephone hotline of the agency to inform it of the unresolved grievance.”

Id.

304 See id. § 641.51 l(3)(d) requires the grievance procedures to provide a “procedure for establishing methods for classifying grievances as urgent and for establishing time limits for an expedited review within which such grievances must be resolved.”

305 See id. § 641.51 l(3)(e).

306 See id. § 641.51 l(3)(f) requires the grievance procedures to provide a “process whereby the grievance manager acknowledges the grievance and investigates the grievance in order to notify the subscriber of a final decision in writing.”

307 See id. § 641.51 l(3)(g) requires the grievance procedures to provide a “procedure for providing individuals who are unable to submit a written grievance with access to the grievance process, which shall include assistance by the organization in preparing the grievance and communicating back to the subscriber.”

308 See id. §641.51 l(4)(c).

309 See id. §641.511(5).

[t]hese time limitations are tolled if the organization has notified the subscriber, in writing, that additional information is required for proper review of the grievance and that such time limitations are tolled until such information is provided. After the organization receives the requested information, the time allowed for completion of the grievance process resumes.

Id.

310 See id. §641.511(4).

311 See id.

312 See W. §641.511(6).

313 Id. §641.511(6).

(d) In an expedited review, an organization shall make a decision and notify the subscriber, or the provider acting on behalf of the subscriber, as expeditiously as the subscriber's medical condition requires, but in no event more than 72 hours after receipt of the request for review. If the expedited review is a concurrent review determination, the service shall be continued without liability to the subscriber until the subscriber has been notified of the determination.

(e) An organization shall provide written confirmation of its decision concerning an expedited review within 2 working days after providing notification of that decision, if the initial notification was not in writing.

(f) An organization shall provide reasonable access, not to exceed 24 hours after receiving a request for an expedited review, to a clinical peer who can perform the expedited review.

Id.

314 See id. I 641.51 l(6)(g).

“In any case when the expedited review process does not resolve a difference of opinion between the organization and the subscriber or the provider acting on behalf of the subscriber, the subscriber or the provider acting on behalf of the subscriber may submit a written grievance to the Statewide Provider and Subscriber Assistance Program.”

Id.

315 See Harris Meyer, The Right to Appeal, HOSP. & Health Networks, May 1998, at 22.

316 See M.

317 See id.

318 See id.

319 See 1998 Pa. Laws 68, available in WL, 1998 Pa. Legis. As a result of the new law, both the Department of Health and the Insurance Department of the Commonwealth promulgated new regulations. See 28 Pa. Code § 9.501 (1999). Any complaint or grievance filed by an enrollee or provider on or after the first renewal date of the enrollee's HMO contract in 1999 should be processed in accordance with the new appeal system requirements. See id. § 9.508(a)(2).

320 See 1998 Pa. Laws 68, § 2101 (to be codified at Pa. Stat. Ann. tit. 40, § 991.2102).

321 Id.

322 See 28 PA. Code § 9.503(b); 31 PA. Code § 301.415(b) (1999).

323 See 1998 Pa. Laws 68, § 2102 (to be codified at PA. Stat. Ann. tit. 40, § 991.2102); 28 PA. Code § 9.504(a).

324 1998 Pa. Laws 68, §2102.

325 See id. §§ 2161(a), (c)(4) (to be codified at PA. Stat. Ann. tit. 40, § 991.2161(a), (c)(4) (grievances)); 2141(a), (c)(4) (codified at Pa. Stat. Ann. tit. 40, § 991.2141(a), (c)(4) (complaints)).

326 See id. §§ 2161(b)(2) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2161(b)(2) (grievances)); 2141(b)(4) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2141(b)(4) (complaints)).

327 See id. §§ 2161(c)(3) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2161(c)(3) (grievances)); 2141(c)(3) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2141(c)(3) (complaints)).

328 See id. § 2161(e) (codified at Pa. Stat. Ann. tit. § 991.2161(e)). Pennsylvania does not require an expedited review process for complaints.

329 See id.

330 See id. § 2161(b)(1) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2161(b)(1)).

331 See id. §§ 2161(c)(1) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2161(c)(1) (grievances)); 2141(c)(1) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2141(c)(1)); 28 Pa. Code § 9.503(b)(3)(i) (complaints).

332 See 1998 Pa. Laws 68, § 2152(a)(1) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2152(a)(1)).

333 See id. §§ 2162 (to be codified at Pa. Stat. Ann. tit. 40, § 991.2162 (grievances)); 2142 (to be codified at Pa. Stat. Ann. tit. 40, § 991.2142 (complaints)).

334 See id. §§ 2162(a) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2162(a) (grievances)); 2142(a) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2142(a) (complaints)). An attorney or other individual before the Department of Health or Insurance Department may represent the enrollee. See id. § 2141(c) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2141(c)); 28 Pa. Code § 9.503(d)(4) (1999).

335 See 1998 Pa. Laws 68, § 2162 (to be codified at Pa. Stat. Ann. tit. 40, § 991.2162).

336 See id. § 2162(a) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2162(a)). The Department of Health will randomly assign the utilization review entity on a rotational basis from a list maintained by the Department of Health to the grievance within two days of receiving the request. See id. § 2162(b).

337 See id. § 2182(a) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2182(a)). However, an HMO will not be fined for the same violation by the Department of Health or the Insurance Department. See id. § 2182(0 (to be codified at Pa. Stat. Ann. tit. 40, § 991.2182(f)).

338 See id. § 2182(c) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2182(c)).

339 See id. § 2182(d) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2182(d)).

340 See id. § 2182(e) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2182(e)).

341 See id. § 2182(b) (to be codified at Pa. Stat. Ann. tit. 40, § 991.2182(b)).

342 See id. § 2191 (to be codified at Pa. Stat. Ann. tit. 40, § 991.2191).

343 See Steve Zatkin, A Health Plans View of Government Regulation, Health Aff., Nov./Dec. 1997, at 35. “Large public purchasers such as the [HCFA], the Federal Employees Health Benefits Program (FEHBP), and state Medicaid agencies will likely want to continue monitoring activities on behalf of their programs and beneficiaries.” Id.

344 See 42 U.S.C. § 1396 (1994).

345 42U.S.C. § 1396(1996).

346 Id. § 1396(a)(3).

347 397 U.S. 254 (1970). Mathews v. Eldridge, 424 U.S. 319 (1976), further defined the due process requirements that were first addressed in Goldberg v. Kelly.

348 See 42 C.F.R. § 431.206(a)-(b) (1998).

349 See id. §431.210.

350 See id. §431.220.

351 See id.§ 431.223(b).

352 See id. §431.230.

353 See id. §431.232.

354 See BBA sec. 4703. An HMO could now have its enrollment consist entirely of Medicaid recipients.

355 See id. sec. 4704.

356 See id. sec. 4704(b)(4).

357 See id. sec. 4705(c)(l)-(2).

358 See id. sec. 4705(c)(2)(C).

359 See New York State Department of Health, 31 Counties Receive Federal Approval for Mandatory Medicaid Managed Care (visited Feb. 26, 1999) <http://www.health.state.ny.us/nysdoh/press97/waivers.htm>. Section 1915 of the Social Security Act was passed by Congress in 1981 “to permit the Secretary of HHS to waive Medicaid's freedom of choice guarantee in order to permit the states to mandate enrollment in managed care style plans for some or all beneficiaries in some or all portions of a state.” Center for Health Policy Research, Statewide Medicaid Managed Care Demonstrations Under Section 1115 of the Social Security Act: A Review of the Waiver Applications, Letters of Approval and Special Terms and Conditions 4 (May 1997) [hereinafter Medicaid Managed Care].

360 A § 1115 waiver of the Social Security Act authorizes the Secretary to waive certain provisions for Social Security grant-in-aid programs including Medicaid to conduct demonstrations that advance the Act's broad objectives. See Medicare Managed Care, supra note 359, at 4. A § 1115 waiver allows more extensive changes in a Medicaid program than a § 1915 waiver. See id. States must develop a plan for a waiver then apply to HCFA for its approval to have the Secretary of HHS approve the waiver. See id. at 6.

361 The State of New York, The Partnership Plan: A Public-Private Initiative Ensuring Healthcare for Needy New Yorkers 4-17 (1995).

362 Id.

363 Id. at 2-31 to 2-32. This information is expected to be used to create plan “report cards” that: “would serve as a valuable gauge of plan performance for consumers and could be used by them in selecting a health plan that meets their specific needs.” Id. at 2-32.

364 See id.

365 29 U.S.C. §§ 1001-1461 (1996).

366 ERISA does not govern individual health insurance policies or group plans sponsored by government entities or churches.

367 ERISA “supercede[s] any and all State laws insofar as they … relate to any employee benefit plan … .” 29 U.S.C. § 1144(a). State law is broadly defined to include “all laws, decisions, rules, regulations or other State action having the effect of law.” See id. § 1144(c)(1). The Supreme Court has stated, “[s]ection 514(a) [of ERISA] was intended to ensure that plans and plan sponsors would be subject to a uniform body of benefits law; the goal was to minimize the administrative and financial burden of complying with conflicting directions among the States or between States and the Federal Government.” Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 142 (1990).

368 The savings clause limits § 514(a) by providing that nothing in ERISA “shall be construed to exempt or relieve any person of any State which regulates insurance, banking or securities.” 29 U.S.C. § 1144(b)(2)(A).

369 The deemer clause prohibits states from enlarging the scope of their regulatory authority by prohibiting the deeming of self-insured ERISA plans to be insurance companies. See 29 U.S.C. § 1144(b)(2)(B).

370 “The phrase relate to … [is] given its broad common-sense meaning, such that state law relates to a benefit plan in the normal sense of the phrase, if it has a connection with or reference to such a plan.” Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47 (1987) (citations omitted).

371 514 U.S. 645 (1995). In Travelers, the Court found that the “relate to” language was a limit on the scope of ERISA's preemption, not the definition of the preemption. See generally id. The Court looked to Congress's intent to preempt state law (to avoid a multiplicity of state regulation) to define the scope of ERISA preemption. See id. at 656-58.

372 See, e.g., California Div. of Labor Standards Enforcement v. Dillingham Const., 519 U.S. 316 (1997) (“relates to” is determined by (1) whether state law has a connection with a plan or (2) whether state law has a reference to a plan); Boggs v. Boggs, 520 U.S. 833 (1997) (applying traditional preemption conflict principles).

373 ERISA also appears to preempt state law concerning claims handling in the managed care context. See Rodriguez v. Pacificare of Texas, Inc., 980 F.2d 1014 (5th Cir.), cert, denied, 508 U.S. 956 (1993); Spain v. Aetna Life Ins. Co., 11 F.3d 129 (9th Cir.), cert, denied, 511 U.S. 1052(1994).

374 Some commentators refer to ERISA's preemption scheme as semi-preemption because it gives states the authority to regulate some, but not all, aspects of health insurance. See Fox, Daniel M. & Schaffer, Daniel C., Semi-Preemption in ERISA: Legislative Process and Health Policy, 7 Am. J. Tax Pol'y 47, 55-56 (1988)Google Scholar. If employer-based health insurance is purchased through an insurance company, then under ERISA's semi-preemption, a state can exercise regulatory authority. See id. at 48. If, on the other hand, the same health insurance is provided through an employer's self-insured program, ERISA preempts any state involvement. Id.

375 H.R. 1415, 105 Cong. (1997) (allowing state causes of action against employer plans and insurers).

376 S. 1890, 105 Cong. (1997) (preempting only those state laws that conflict with the Patients’ Bill of Rights with respect to health insurers). However, the House of Representatives did pass the House a version of the Senate bill. See Amy Goldstein & Juliet Eilperi, Partisan House Swiftly Passes GOP Patients’ Rights Bill, WASH. POST, July 25, 1998, at A4 (requiring internal grievance procedures and the ability to appeal to an external board without binding authority over the insurer).

377 H.R. 4250, 105 Cong. (1997) (emphasizing external appeals without amending ERISA's preemption provisions).

378 The failure of this legislation is largely attributed to partisanship rather than the merits of the bills. See Pear, Robert, Senators Reject Bill to Regulate Care by H.M.O.s, N.Y. Times, Oct. 10, 1998Google Scholar, at Al; Amy Goldstein & Helen Dewar, Senate Kills ‘Patient's Rights’ Bill; Managed-Care Measure a Victim of Partisanship, Clinton Scandal, Lobbying, Wash. Post, Oct. 10, 1998 at Al.

379 See Meyer, supra note 315, at 22.

380 See id.

381 See Alice Ann Love, Move to Enhance Patient Rights Dead This Year, Associated Press, Oct. 8, 1998.

382 See Steve Zatkin, A Health Plan ‘s View Of Government Regulation, HEALTH AFF., Nov./Dec. 1997, at 33, 33.

383 See id. at 35.

384 See id.

385 See generally id. (discussing the valid government role in protecting consumers, but urging government to regulate in a manner consistent with business operations).

386 Medicare Coverage; New Rules, New Procedures, New Disputes, supra note 123; see also Emily Friedman, Managed Care, Rationing, And Quality: A Tangled Relationship, Health Aff., May/June 1997, at 174 (discussing the vested interest managed care has in convincing the public of the managed care's quality of care).

387 Medicare Coverage; New Rules, New Procedures, New Disputes, supra note 123.

388 See Part 11.B and Table 2 for a discussion of data indicating that while some appeals are inappropriate, some beneficiaries are using services appropriately and are being improperly denied coverage and/or payment by otherwise responsible plans.

389 Medicare Coverage; New Rules, New Procedures, New Disputes, supra note 123.

390 Id.

391 See Zatkin, supra note 343, at 34 (“Although the delivery of health care is a local activity, many health plans, through affiliations, are creating a national capacity to better respond to the service requirements of their customers. Variations in standards can increase the administrative costs of responding effectively to these needs.”).

392 Medicare risk contracting is a highly competitive market. Forty-eight percent of Medicare risk HMOs sampled recently by the Office of the Inspector General (OIG) compete with four or more other risk contractors within the same geographic market. See Beneficiary Perspectives, supra note 19, at 22 (Mar. 1998).

393 See David S. Hilzenrath & Amy Goldstein, Dozens of HMOs Quit Medicare, Patients Face Upheaval, WASH. POST, Oct. 4, 1998, at Al.

394 See id; Jim Ross, AvMed Medicare HMO Blames Payment Formula, ST. Petersburg Times, Oct. 9, 1998, at 1 (the withdrawal of AvMed as a Medicare HMO left enrollees in seven Florida counties without a managed care alternative).

395 See Medicare H.M.O.s, N.Y. Times, Oct. 10, 1998, at A14.

396 See id.

397 See Pear, Robert, Clinton to Announce Help as H.M.O. ‘s Leave Medicare, N.Y. Times, Oct. 8, 1998Google Scholar, at A28.

398 See Managing to Survive; Medicare HMOs Hang on in Houston, Houston Chron., Oct. 9, 1998, at 1. Under § 1876 of the Social Security Act, Medicare HMOs were required to follow state-mandated benefit laws such as prescription drug benefits. As the new Medicare+Choice program preempts state-mandated benefit laws, Medicare managed care entities are no longer required to follow such state laws.

399 See HIPAA § 215 (amending 42 U.S.C. § 1395(i)(6)). Under the BBA and Mega-Reg, civil monetary penalties ranging from $10,000 to $100,000, depending on the infraction, may now be imposed for Medicare+Choice violations.

400 See id.

401 See id.

402 See BBA § 1857(g)(2); Mega-Reg, supra note 2, at 35,115 (to be codified at 42 C.F.R. § 422.750).

403 See id.

404 See id. (codified at 42 C.F.R. § 422.755).

405 John K. Gorman, New Medicare Contract Requirements: Feeding the ‘800-Pound Gorilla’, in Managed Medicare & Medicaid: Facts, Trends and Data JAN. 1996 - JAN. 1997 323, 324 (Christopher J. Gearon ed., 1997). Gorman specifically addresses the sanctions HCFA could impose for Medicare risk contractors not complying with mandatory HEDIS 3.0 reporting requirements. See infra Part V.B.3.

406 Gorman, supra note 405, at 324. HCFA had previously been criticized for its lack of enforcement in regards to Medicare risk contractor monitoring. See Increased HMO Oversight, supra note 32; General Accounting office, Medicare: HCFA Should Release Data to Aid Consumers, Prompt Better HMO Performance, Oct. 1996. However, Sally Hart, attorney with the Center for Medicare Advocacy, remains skeptical on appeals process compliance. See Medicare Coverage; New Rules, New Procedures, New Disputes, supra note 123. “The overwhelming evidence is that most plans ignore HCFA regulations about the appeals process, and HCFA refuses to penalize HMOs that are out of compliance,” said Hart. Id. Hart asserts that the managed care industry will continue business as usual unless higher courts uphold Grijalva's mandated termination of Medicare contracts for noncompliant health plans. See id.

407 Whether the rules dictate 72 hours or 60 days, says Joe Baker of the Medicare Rights Center, “there's really nothing in these regs that speaks to increased enforcement.” Jane Bennett Clark, What if your Medicare HMO says ‘no’? Appeals are supposed to be quicker, but often aren't, Kiplinger's Personal Finance Mag., Oct. 1997, at 112. Although HCFA has promised to improve its overall appeals system, lack of funding and personnel make the task difficult, Baker says “[t]he government, if it's really committed to increasing enrollment in HMOs, also has to be committed to increasing funds for oversight.” Id. Baker recommends that Medicare beneficiaries thinking of joining an HMO obtain information on the HMO's disenrollment rate before joining. See id.

408 See Criteria for Implementing Permissive Exclusion Authority Under Section 1128(b)(7) of the Social Security Act, 62 Fed. Reg. 55,410, 55,411-12 (1997).

409 See id.

410 Id. at 55,411. The other purposes in publishing these criteria were to allow for more effective development of OIG investigations and investigative plans and to establish an objective basis for OIG's permissive exclusion decisions and evaluation of a provider's trustworthiness. See id.

411 See supra Part III.B. for a discussion of the Health Carrier Grievance Procedure Model Act (GPMA).

412 See Glenn Pomeroy, Vice President of National Association of Insurance Commissioners (NAIC), Testimony of The National Association of Insurance Commissioners’ Special Committee on Health Insurance Before the Committee on Finance of the United States Senate on Improving Medicare Choices (Mar. 20, 1997), available in 1997 WL 8220-8.

413 See, e.g., National Association of Insurance Commissioners, Proceedings of the Spring 1996 National Meeting (Mar. 23, 1996) [hereinafter 1996 Proceedings].

414 As of April 1997, variations of the GPMA have been enacted either by statute or regulation in 32 states: Alabama, Arizona, California, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Dakota, Oklahoma, Pennsylvania, South Dakota, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming. See National Association of Insurance Commissioners, Health Carrier Grievance Procedure Model ACT 72-13 to -16 (1998) [hereinafter GPMA].

415 See David Randall, Deputy Director, Department of Insurance, State of Ohio, Testimony of the National Association of Insurance Commissioners’ (EX) Special Committee on Health Insurance Before the Health Subcommittee of the Committee on Ways and Means of the United States House of Representatives on Medicare HMO Regulation and Quality (Mar. 6, 1997), available in 1997 WL 8219788.

416 These managed care models are: The Managed Care Plan Network Adequacy Model Act; GPMA; The Utilization Review Model Act (URMA); The Quality Assessment and Improvement Model Act; and The Health Care Professional Credentialing Verification Model Act. See 1996 Proceedings, supra note 413, at 630.

417 In a report of NAIC's Health Plan Accountability Working Group, John Conniff, an insurance regulator, reported that the Working Group had been developing these models for more than two years. See id. He stated that all the models have been modified as regulators made a number of concessions to industry. See id. Regulators also had been conscious of cost considerations in drafting the models. See id.

418 See Randall, supra note 415.

419 See id. While all of NAIC's managed care model acts work together, this Article only describes the GPMA. However, other models also deal with grievances. For example, NAIC's Health Maintenance Organization Model Act requires HMOs to have grievance and quality assurance procedures.

420 See GPMA, supra 413, § 3(Q).

421 See id.

422 See id. § 7. In the Drafting Note to this section, NAIC strongly encourages states to adopt URMA because it contains provisions governing standard and expedited appeals of adverse determinations.

423 See id. § 7(B).

424 See id.

425 See id. § 8.

426 See id. § 8(A).

427 See id. § 8(C)(1).

428 See id. § 8(C)(6).

429 See id. §8(C)(1), (7).

430 See W. § 10.

431 Id. at § 10(A). The “jeopardize” language is not unique to the GPMA; it is also used in: Expedited Review, supra notes 131 & 134 and accompanying text; in the BBA, supra note 248 and accompanying text; and in recent Florida legislation, supra note 304 and accompanying text.

432 See GPMA, supra 414, § 10(A).

433 See id. § 10(F).

434 See id. § 10(G).

435 See id.

436 See id. § 4.

437 See id.

438 See id.

439 See id.

440 See id.

441 HCFA has already started the process toward adopting deemed status for quality issues such as grievance and appeal procedures in the Quality Improvement System for Managed Care (QISMC). For a further discussion of how QISMC can be used to harmonize consumer protection in appeal procedures though the use of deemed status, see Part V.B.2-3. This program draws heavily from the NAIC Model Acts, private accreditation bodies and President Clinton's Consumer Bill of Rights.

442 See 42 C.F.R. § 422.156(a) (1999).

443 National Committee for Quality Assurance (NCQA) is a private, nonprofit organization dedicated to assessing and reporting the quality of managed care plans. See NCQA An Overview (visited Feb. 26, 1999) <http://www.ncqa.org/Pages/Main/overview3.htm>. NCQA is governed by a board of directors which consists of employers, consumer and labor representatives, health plans, quality experts, regulators and medical professionals. See id. NCQA's mission “is to provide information that enables purchasers and consumers of managed health care to distinguish among plans based on quality.” Id. The intent is that this information will enable informed health care purchasing decisions and encourage health plans to compete on quality and value, rather than on price and provider network. See id. NCQA performs two functions toward achieving this goal: accreditation and performance measurement. See id.

444 The Joint Commission on the Accreditation of Healthcare Organizations (JCAHO) is an independent, nonprofit organization that evaluates and accredits more than 18,000 health care organizations and programs including hospitals, health care networks, clinical laboratories, nursing homes and other long-term care facilities, and behavioral health facilities. See Facts About the Joint Commission on Accreditation of Healthcare Organizations (visited Feb. 26, 1999) <http://www.jcaho.org/about_jc/jcinfo.htm>. JCAHO is the nation's predominant standard-setting and accrediting body in health care. See id.

445 The American Medical Accreditation Program (AMAP), sponsored by the American Medical Association, is designed to enhance the health of the public by setting standards and improving the performance of individual physicians. See AMAP, JCAHO, NCQA Announce Plans to Merge Performance Measure Development Efforts (visited Feb. 26, 1999) <http://www.ncqaorg/pages/communications/news'pmccrel.htm>.

AMAP is also dedicated to replacing the current duplicative and fragmented patchwork of existing physician review and assessment programs. See id.

446 NCQA, JCAHO and AMAP recently established the Performance Measuring Coordinating Council, a 15-member group that will work to ensure that measurement-driven assessment processes are efficient, consistent and useful for the many parties that rely on them to help make important decisions about health care. See AMAP, JCAHO, NCQA Announce Plans to Merge Performance Measure Development Efforts, supra note 445.

447 See generally Wilensky, Gail R., Promoting Quality: A Public Policy View, Health Aff., May/June 1997CrossRef Google Scholar, at 77 (suggesting that standards jointly created by the public and private sector such as HEDIS will become the industry standard).

448 In a report of NAIC's Health Plan Accountability Working Group, Conniff noted that there were any number of accrediting bodies across the United State that could perform this function. See 1996 Proceedings, supra note 413, at 630.

449 Some have suggested delegating standard-setting authority to a Financial Accounting Standards Board (FASB) like entity. This approach is intended to muster expertise and shield the process from the political pressures inherent in the regulatory activities of federal agencies. These are laudable objectives. However, given the widespread interest in these issues and the vast array of interest groups that would seek representation, the politics of this standard-setting process could be as heated as a more traditional approach would be. A traditional model would provide regulatory authority to a federal agency, such as the [HHS], and obtain expertise through the public comment process and perhaps an advisory body of experts.

Zatkin, supra note 382, at 34.

450 For further discussion of the merits of NCQA accreditation such as forcing data generation, originating quality factors, ranking plans on comparative data, creating competitive pressures in the marketplace and enabling consumers to make informed choices, see Barry R. Furrow, Regulating the Managed Care Revolution: Private Accreditation and a New System Ethos, 43 VlLL. L. Rev. 361 (1998).

451 See Karen A. Jordan, Managed Competition and Limited Choice of Providers: Countering Negative Perceptions Through a Responsibility to Select Quality Network Physicians, 27 ARIZ. ST. L.J. 875, 922 (1995); see also What is MCO Accreditation?, (visited Feb. 26, 1999) <http://www.ncqa.org/pages/policy/accreditation/mco/accred.htm> [hereinafter NCQA Accreditation].

452 See National Committee for Quality Assurance, 1997 Standards for Accreditation of Managed Care Organizations 7 (1997).

453 See id.

454 See id.

455 See id.

456 See NCQA Accreditation, supra note 451. The NCQA certification program, the Credentials Verification Organization Certification Program, was introduced in 1996. NCQA expects to expand this program as more functions are delegated by MCOs to physician organizations, such as PPOs.

457 See NCQA Accreditation Status List (visited Feb. 26, 1999) <http://www.ncqa.org/status.htm>.

458 Id. (emphasis removed).

459 See id.

460 See id.

461 See NCQA An Overview, supra note 443.

462 See National Committee for Quality Assurance, 1997 Surveyor Guidelines for the Accreditation of Managed Care Organizations (1997); see also Marc A. Rodwin, Managed Care and Consumer Protection: What Are the Issues? 26 Seton Hall L. Rev. 1007, 1045 (1996) (“The key issue [for administrative due process] is often the appropriateness of the criteria the organization sets [for grievances], not whether it was correctly applied.”).

463 See National Committee for Quality Assurance, supra note 462 .

464 See id.

465 See id. NCQA surveyors will examine: (1) the contents of an HMO's subscriber's complaint files; (2) the contents of all first- and second-level appeals files; and (3) the appropriateness of how the HMO handled its complaints and appeals in the surveyors’ judgment in determining how an HMO scored with regard to RR 4. See id.

466 See id.

467 See id.

468 See id.

469 See id.

470 See NCQA Accreditation, supra note 451.

471 See id.

472 See id.

473 See id.

474 See id.

475 See id. The most recent accreditation reviews are available from NCQA's web site, see National Committee for Quality Assurance, List of Plans with Available ASRs (visited Feb. 8, 1999) <http://www.ncqa.org/accred/asr/asrlist.htm>.

476 See id.

477 See id.

478 See National Committee for Quality Assurance, Managed Care Accreditation Organization Status List 3 (Dec. 31,1998).

479 See id.

480 See id.

481 See NCQA An Overview, supra note 443.

482 See id. NCQA maintains an entire portion of its web page for consumers. See NCQA Consumer Page (visited Nov. 5, 1998) <http://www.ncqa.org/consumer/welcome.htm>. In addition, consumers can also call NCQA's toll-free number, 1-888-275-7585, to obtain information on plans. See id.

483 with regard to the external review requirement of a Medicare+Choice's quality assurance program, see BBA sec. 4001, § 1852(e)(3)(A):

IN GENERAL.—Each Medicare+Choice organization shall, for each Medicare+Choice plan it operates, have an agreement with an independent quality review and improvement organization approved by the Secretary to perform functions of the type described in sections 1154(a)(4)(B) and 1154(a)(14) with respect to services furnished by Medicare+Choice plans for which payment is made under this title.

484 See BBA sec. 4001, § 1852(e)(4) states:

Treatment of Accreditation.—The Secretary shall provide that a Medicare+Choice organization is deemed to meet requirements of paragraphs (1) and (2) of this subsection and subsection (h) (relating to confidentiality and accuracy of enrollee records) if the organization is accredited (and periodically reaccredited) by a private organization under a process that the Secretary has determined assures that the organization, as a condition of accreditation, applies and enforces standards with respect to the requirements involved that are no less stringent than the standards established under section 1856 to carry out the respective requirements.

See also supra Part V.B.2 for a discussion of how such private accreditation might occur.

485 See Mega-Reg, supra note 2, at 34,991.

486 For further discussion of HED1S data, see Sheryl Tatar Dacso & Clifford C. Dacso, Managed Care Answer Book 8-48-8-53 (3d ed. 1999).

487 See Mega-Reg, supra note 2, at 34,992; see also 42 CF.R. § 422.152.

488 See Health Care Financing Administration, Implementation of HCFA ‘s Quality Improvement System for Managed Care (QISMC) Interim Standards and Guidelines, Operational Policy Letter #72, Sept. 30, 1998, (visited Feb. 26, 1999) <http://www.hcfa.gov/medicare/OPLO72.htm>.

489 See Health Care Financing Administration, Quality Improvement System for Managed Care (QISMC) (draft) [hereinafter QISMC Draft].

490 See id.

491 See id.

492 See id.

493 See id.

494 See id.

495 Health Care Financing Administration, Quality Improvement System for Managed Care (QISMC) for Organizations Contracting With Medicare or Medicaid: Interim Qismc Standards, Standard 2.2.6 (Sept. 1998) [hereinafter QISMC Standard].

496 See QISMC Standard 2.3.1.10.

497 See id. 2.4; see also 2.4.2 (requiring contractors to have timely grievance procedures with the opportunity for reconsideration), 2.4.3 (setting forth the notice and general procedures contractors must offer for reconsiderations of coverage and payment determinations), 2.4.4 (requiring that entities monitor the resolution process and develop activities to improve the process).

498 See Health Care Financing Administration, Quality Improvement System for Managed Care (QISMC) for Organizations Contracting With Medicare or Medicaid: Guidelines for Implementing and Monitoring Compliance With Interim Qismc Standards, Guideline 2.4 (Sept. 1998) [hereinafter QISMC Guideline].

499 See id.

500 See QISMC Standard 3.3; see also QISMC Guideline 2.4.2.5.

501 See QISMC Standard 3.3.1.5.

502 See QISMC Guideline 2.4.3.2.

503 See id. 1.3.5.3.

504 See QISMC Standard 1.3.5.1-1.3.5.2.

505 See NCQA Government Page (visited Feb. 26,1999) <http://www.ncqa.org/Pages/Main/governmenthtm>.

506 See id. These states are Connecticut, Florida, Kansas, Nevada, Oklahoma, Pennsylvania, Rhode Island, South Carolina, New Jersey, Vermont, Virginia and West Virginia. See NCQA Government Page (visited Feb. 26, 1999) <http://www.ncqa.org/Pages/Main/government.htm>. Additionally, Alabama, Iowa, New York, Ohio and Tennessee require health plans serving their state employees to obtain NCQA accreditation.

507 See, e.g., GA. Code Ann. § 33-20A-4 (1998); LA. Rev. Stat. Ann. § 22-2022 (1998); 1998 Md. Laws 415; OR. Rev. Stat. §§ 743.814-.819 (1998); VA. Code Ann. § 32.1-137.3 (1998); W. VA. Code §§ 33-25A-3A to -4 (1997).

508 See NCQA Policy Watch Spring 1996, Medicare Moving from Payer to Purchaser (visited Jan. 23, 1999) <http://www.ncqa.org/govern/pwsprg96.htm>.

509 See id.; see also Zatkin, supra note 384, at 34 (“Private standards imposed by purchasers, accreditation agencies, and trade associations contribute to quality improvement but are not substitutes for adequate public standards. By definition, private standards do not apply to all health plans in all circumstances. Often, less-qualified health plans avoid them.”).

510 See 1996 Proceedings, supra note 413, at 630.

511 See id. Note that HCFA has declined, to make accreditation a requirement of becoming a Medicare risk contractor. See NCQA Policy Watch Spring 1996, supra note 508.

512 See 1996 Proceedings, supra note 413, at 630.

513 See id.

514 See id.

515 See id.

516 See id.

517 See Rodwin, supra note 464, at 1054 (“It is unlikely that consumer organization or alliances will be sufficient to protect consumers. Governmental agencies have an important role to play in setting standards, monitoring compliance and penalizing illegal conduct.”); cf. Alice G. Gosfield, Who Is Holding Whom Accountable For Quality?, Health Aff., May/June 1997, at 26, 28 (discussing the interaction of federal and state regulation, self-accreditation and private contractual arrangements for ensuring comprehensive consumer protections).

518 See QISMC Draft, supra note 489.

519 See id.

520 See supra Part IV.A.

521 See supra Part V.A.2.

522 See QISMC Draft, supra note 489.

523 See id.

524 See id.

525 See id.

526 See id.

527 See id.; see also Advisory Comm’n on Consumer Protection & Quality in the Health Care Industry, Consumer Bill of Rights and Responsibilities: Report to the President of the United States 57-62 (1997).

528 See QISMC Draft, supra note 489.

529 See Susan J. Stayn, Securing Access to Care in Health Maintenance Organizations: Toward a Uniform Model of Grievance and Appeal Procedures, 94 Colum. L. Rev. 1674 (1994) (discussing the creation of a federal grievance and appeal system).

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