MCOs Must Inform Beneficiaries of Their Appeal Rights

Medicare beneficiaries enrolled in a managed care plan have the right to appeal if their plan’s MCO refuses to provide health services or pay for services already obtained. If an MCO denies a beneficiary’s request for services—such as skilled nursing care or a referral to a specialist—it must issue a written notice that explains the reason for the denial and the beneficiary’s appeal rights. The documents we examined were used by MCOs to inform prospective enrollees and members about covered services, fees, and restrictions. Although HCFA had reviewed and approved the documents, some incorrectly described plan benefit packages. Some MCOs provided beneficiaries with detailed benefit information only after they had enrolled in a plan. In contrast, each MCO that participates in FEHBP is required to distribute a single, comprehensive booklet that describes its benefit package using a standard format and standard terminology. We also found serious problems with plan information regarding coverage for outpatient prescription drugs—a benefit that attracts many beneficiaries to Medicare managed care plans. However, we found that some MCOs distributed outdated literature without the required addendum and that when MCOs included the addendum, it often did not clearly indicate that the addendum superseded the information contained in other documents. Some MCOs Did Not Provide Complete Benefit Information

provided general descriptions of their plans’ ambulance coverage but did not explain the extent of the coverage. Furthermore, an MCO is not required to provide beneficiaries with copies of its Medicare contract. 2.) Denial Notices Are Sometimes Incomplete, Never Issued, or Do Not Indicate Specific Reasons for the Denial

studies by the OIG, using different methodologies, provide additional evidence that beneficiaries are not always informed of their appeal rights.In one study, the OIG surveyed beneficiaries who were enrolled or had recently disenrolled from a managed care plan. Weaknesses in HCFA’s Review Processes and Requirements Allowed Problems in Plan Materials to Go Uncorrected

Although HCFA reviews and approves all materials that MCOs distribute to beneficiaries, weaknesses in the agency’s review practices and information standards allowed the plan information problems we observed to go uncorrected. Finally, HCFA has not used its authority to require that MCOs use a common format and terminology to describe their plans’ benefit packages. Consequently, although the plans had similar benefit restrictions, the MCOs that were required to disclose the plan restrictions appeared to offer less generous benefits than the other MCOs’ plans. HCFA Has Begun Efforts to Correct Problems and Shortcomings in Plan Information

HCFA is moving to address some of the problems and systemwide shortcomings we identified during our recent reviews. Otherwise, full implementation could be delayed. Conclusions

As the Medicare+Choice program grows and more health plan options become available, the need for reliable, complete, and useful information will increase. We also found that some MCOs did a poor job informing beneficiaries about their appeal rights and the appeals process.
Why GAO Did This Study

Pursuant to a congressional request, GAO discussed the: (1) accuracy, completeness, and usefulness of the information Medicare managed care organizations (MCO) distribute about their plans' benefit packages; (2) extent to which MCOs inform beneficiaries of their plan appeal rights and the appeals process; and (3) Health Care Financing Administration's (HCFA) review, approval, and oversight of the plan information that MCOs distribute.

What GAO Found

GAO noted that: (1) it found problems with the benefit information distributed by all of the 16 MCOs it reviewed; (2) although HCFA had reviewed and approved all of the information GAO examined, some MCOs misstated the coverage they were required by Medicare or their contracts to offer; (3) one MCO advertised a substantially less generous prescription drug benefit than it had specified in its Medicare contract; (4) some MCOs provided complete benefit information only after a beneficiary enrolled; (5) others never provided full descriptions of benefits and restrictions; (6) as GAO has reported previously, it is difficult to compare available options using literature provided to beneficiaries because MCOs use different formats and terminology to describe the benefit packages being offered; (7) the variation in Medicare plan literature contrasts sharply with the uniformity of plan information distributed by MCOs that participate in the Federal Employees Health Benefits Program (FEHBP); (8) MCOs participating in FEHBP are required to provide prospective enrollees with a single, comprehensive, and comparable brochure to facilitate informed choice; (9) in GAO's study of the appeals process, GAO found that when MCOs deny plan services or payment, they do not always inform beneficiaries of their appeal rights; (10) sometimes MCOs issue denial notices that do not contain all the information that HCFA requires; (11) GAO also found that some MCOs delay issuing denial notices until the day before discontinuing services, such as skilled nursing care; (12) this delay can increase a beneficiary's potential financial liability should the beneficiary appeal the plan's decision and lose; (13) many of the information problems GAO identified regarding plan benefit packages and beneficiaries' appeal rights went uncorrected because of shortcomings in HCFA's review practices; (14) in addition, HCFA has not exercised its authority to require MCOs to distribute plan information that is more complete, timely, and comparable; (15) agency officials recognize many of the shortcomings GAO identified and are beginning efforts to address them; and (16) however, GAO believes that the agency could do more.