Published in the San Francisco Chronicle, March 18, 1997, Page A3:

Elderly people in health maintenance organizations often find that they cannot obtain the medical services they need because HMOs limit their ability to appeal adverse decisions on treatment, federal investigators said yesterday.

June Gibbs Brown, inspector general of the Department of Health and Human services, said that many Medicare beneficiaries were never informed of their appeal rights. And she said that many HMOs - more than half of those examined by federal auditors - did not fully comply with federal rules for handling appeals.

Five million of the 38 million Medicare beneficiaries are in HMOs, and the enrollment is growing by more than 80,000 a month. HMOs receive a fixed monthly payment, set in advance, for each subscriber, regardless of what services the person receives. This method of payment, Brown said, "may provide incentives to limit services," so it is important for HMOs to rule promptly on appeals challenging the denial, reduction or termination of services.

A report on the appeal procedures of Medicare HMOs, written by Medicare officials, says that the government has received "increasing numbers of complaints from beneficiaries" who had difficulty appealing cutbacks in care.

Federal officials said that some HMOs had told the Medicare patients that they could not appeal decisions terminating or reducing services. The HMOs argue that "because a service was provided, not denied, the reduction or termination of the service is not appealable," the report by Medicare officials said.

Thus, the officials said, HMOs sometimes terminate coverage for skilled nursing home stays and patients are discharged without further services, but they are not allowed to appeal.

Bruce Vladeck, administrator of the Federal Health Care Financing Administration, which runs Medicare, said he agreed that "improvements are needed." And he said that his agency would soon issue new rules to clarify the appeal rights of Medicare beneficiaries.

Dr. Beatrice Braun, a director of the American Association of Retired Persons, which represents 19 million Medicare beneficiaries, said: "The biggest problem in the current appeal process is the lack of meaningful time limits. Under current regulations, an HMO can take as long as 60 days to make a formal denial of care and then an additional 60 days to reconsider its denial. This is unacceptable."

Existing rules generally do not require HMOs to continue services while patients pursue appeals. As a result, Dr. Braun said, treatment like therapy or rehabilitation "can be cut off abruptly and then later resumed, after irreparable harm has been done."