Summary: Medicare requires managed care plans to notify a beneficiary in writing of the reasons for denying to provide or pay for a service and to state the beneficiary's appeal rights. The beneficiary can appeal a denial, in writing, first to the plan, then to the Center for Health Dispute Resolution, then to an administrative law judge, and finally to a U.S. District Court. Beneficiaries are entitled to expedited decisions on their appeals if the standard time for making decisions could endanger their health or life. Between January 1996 and May 1998, health maintenance organizations reported an average of nine appeals per 1,000 Medicare members (this number may be rising) and reversals of 75 percent of the original denials. However, the number of appeals may understate beneficiaries' dissatisfaction with the plans' initial decisions: (1) some beneficiaries switch out of their plans rather than appeal and (2) some receive notices that fail to state reasons for a denial or to explain their appeal rights or they receive no notices at all. Furthermore, plans sometimes give beneficiaries little advance notice when they decide to discontinue paying for services. The Health Care Financing Administration (HCFA) does not determine whether beneficiaries who were denied services but did not appeal were informed of their appeal rights. HCFA does not monitor the provider groups to whom issuing denial notices and deciding whether to expedite initial decisions are delegated. HCFA also has not issued specific criteria for expedited cases. HCFA is implementing or planning initiatives to better protect beneficiaries' rights.
