Independent Review of HMOs’ Treatment Decisions Generally Benefits Texas Residents, Study Indicates

More than half of all Texans who appeal an HMO's decision to deny coverage for a certain health service are at least somewhat successful, but many residents do not use the independent review process, a study released May 7 by Consumers Union of Texas indicates. Under a 1997 state law, individuals who are denied treatment coverage by an HMO may appeal to an independent expert, who decides whether to grant coverage for the original procedure or some other medical procedure, or to upold the HMO's decision. If the reviewer rules in favor of the patient, the ruling cannot be appealed; if the reviewer finds for the HMO, a patient can file a lawsuit against the HMO, state Department of Insurance spokesperson Jim Davis said. The Ft. Worth Star-Telegram reports that researchers evaluated 263 appeals filed with the insurance department between March 22, 2001, and Sept. 26, 2001, covering the state's three independent review organizations and 63 HMOs. Of the appeals evaluated, 55% of appellants received coverage for at least "some additional treatment," and 70% of cases involving denied treatment of mental illnesses resulted in a patient receiving the care they originally requested.

Appeals Process Underutilized, Study Says
The study also found that while HMOs make "thousands of coverage decisions a week," including denials, only 587 appeals were settled in 2001. Lisa McGiffert, a Consumers Union senior policy analyst, said the high success rate for appeals coupled with a low number of appeals "raise[s] a red flag," adding, "It's always ... felt like that is [HMOs'] practice [--] deny the coverage knowing that most people won't come back and appeal the ruling." But Leah Rummel, a Texas Association of Health Plans spokesperson, said the low number of reviews indicates that Texans are satisfied with their coverage. She added, "We think the fact that there are so few people going through the [independent review] process [means] that the system is working very well in Texas. We don't think that it shows that people get frustrated and give up" (Moritz, Ft. Worth Star-Telegram, 5/8). The study recommends that the insurance department send notices to residents denied coverage to inform them about their appeal rights and conduct regular reviews of the system ( AP/Houston Chronicle, 5/7). The study is available online.