Managed-care protection laws 'hit and miss,' study concludes

A recent study released by the Families USA Foundation concluded that state laws protecting the concerns of managed care consumers are sporadic and do not address the largest concerns of those consumers.

"State legislatures throughout the country have responded to consumers' increasing concerns about managed care by passing laws that seek to protect consumers from abuses," the report, titled "Hit and Miss: State Managed Care Laws," concludes. Application of those differing laws, however, varies due to a number of factors, including the federal Employee Retirement Income Security Act (ERISA).

"This variability is the source of enormous confusion for consumers, leaving them uncertain about their health care coverage and concerned about whether they will get the care they need," the study said. Managed care plans a decade ago covered fewer than 30 percent of American people. Today, the study said, more than 75 percent of Americans are in health maintenance organizations, preferred provider organizations and point-of-service plans.

"The origins of managed care lie in efforts to improve access to preventive, primary, and coordinated care," the study's introduction said. "More recently, purchasers of health coverage have turned to managed care in response to health care costs that were spiraling out of control.

"The traditional fee-for-service system offered powerful incentives to provide more and more costly diagnostic tests, health procedures and lengthy hospitalizations even when such health services were of questionable benefit to patients. Managed care plans, on the other hand, are designed to control health care utilization and to curb unnecessary and inappropriate care."

Managed care, the report said, has succeeded in slowing the increase in health care costs, but consumers have been unsettled by the change. "Many fear that the reversal of economic incentives will result in the denial of needed and appropriate care."

The report illustrates this conclusion with the results of a survey by The Henry J. Kaiser Family Foundation, which also funded the study, and Harvard University's School of Public Health.

The survey showed 61 percent of its respondents said managed care decreased the amount of time doctors spend with patients. Fifty-nine percent of survey respondents said HMOs and other managed care plans have made it harder for sick people to see specialists.

The report, with the survey results as a guide, looks at the remedies states have taken to protect consumers.

"Virtually all states have, by now, adopted one or more laws addressing different specific consumer concerns," the report's introduction said. "These laws run the gamut from laws increasing consumer access to services (for example, emergency care, prescription drugs or specialists), to laws prohibiting the use of incentives that encourage physicians to deny care, to laws assuring consumer rights in the case of disputes."

The report concludes, however, that state laws are not consistent. And, in the case of states with comprehensive legislation, many consumers are exempt from its protections.

"Even in states that have enacted strong consumer protection laws, these laws do not apply to a large number of their residents. As a result of the federal Employee Retirement Income Security Act of 1974, some 51 million Americans those receiving health coverage from an employer who self-insures are exempted from the managed care patient protections established by state law."

The report identifies 13 areas of consumer protection and how state laws address these areas ranging from the right to go to an emergency room and have a managed care plan pay for treatment there, to a woman's right to gain direct access to an obstetrician or gynecologist, to laws enabling enrollees to sue health plans that improperly deny care. The report lists the number of people in each state who are in ERISA plans and exempt from state law.

Among the study's findings:

?No state has passed a series of laws addressing all 13 of the sampling of protection areas the report identifies.

?Vermont has enacted the greatest number of those protections (11), and South Dakota has established the fewest (0).

?About a third of Americans with employer-provided health care, about 51 million people, are in self-insured plans that exempt them from the state laws.

?Of those who have health insurance proved by their employer, 83 percent about 124 million people are preempted under ERISA from seeking state-prescribed remedies for wrongful denials of care.

"There is one set of rules for those who purchase their own insurance, another for those in employer-paid self-insured plans, and yet another for those in employer-paid plans that are not self-insured," the report concludes.

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