Travelers Long-Term Care Insurance Plan The Travelers plan offers insureds meeting the criteria of functional dependency the option of receiving a flat daily minimum benefit amount or a payment for actual services received (or up to five times the amount of the minimum benefit, whichever is less). The latter option requires the insured to accept a care plan that is coordinated by a case manager on contract to Travelers. The same review and appeal process is available to insureds who have either been assessed as ineligible for long-term care benefits or who object to aspects of the care plan. Eligibility to receive benefits or care management is contingent on the insured having a qualifying disability due to an accidental injury or sickness. The insured must be determined by a Travelers representative to need assistance with two or more ADLs from a list set out in the Certificate of Insurance.29 When an insured first requests long-term care benefits or disputes aspects of a care plan, the Patient Care Coordinator, a Travelers employee, gathers the relevant information, speaks with the insured's physician, family, and the case manager in order to develop background information. The case manager then makes an on-site evaluation based on standardized criteria for measuring ability to complete ADLs. If the case manager and the Patient Care Coordinator agree to deny the claim, Travelers sends the insured a denial letter. This letter must include an explanation of the reasons for denial and information about how to request a review. The insured is encouraged in this letter to include additional information considered of value to the reviewer and to ask for copies of documents used in the determination process. WHAT SHOULD POLICYMAKERS CONSIDER IN DEVELOPING THE REVIEW AND APPEAL PROCESS FOR A LONG-TERM CARE PROGRAM? A benefit program's review and appeal procedures should be developed in the context of the total program. Procedures in existing programs vary considerably, primarily reflecting the diverse objectives of the programs themselves. Underlying Program Considerations Considerations underlying the operations of these programs significantly influencing the structure of the review and appeal process include: Type of benefit • Source of financing • Structure of program administration • Cost containment measures Type of Benefit-The criteria for establishing initial and continuing eligibility vary substantially depending on type of benefit. Some benefit programs provide a beneficiary with periodic compensation if she/he is determined to have a chronic disability that results in eligibility (DI, SSI, DVA). Others reimburse an eligible individual for certain specific medical or skilled care expenses, or determine eligibility for a benefit on a case-by-case basis in advance of providing a specific service (Medicare, Medicaid). Programs providing regular compensation based on beneficiaries' disabilities, or payment for treatment of chronic medical conditions, are able to build into the claims process time for reasoned initial claims determinations (DVA, SSD, SSI, Medicaid). In programs providing reimbursement for acute medical care (Medicare) this is more difficult. Source of Financing-Depending on a benefit program's source of financing, its review and appeal process may be required to meet differing legal requirements. Generally, entitlement programs are funded from federal or state tax revenues (Medicaid, SSI). These have more stringent due process requirements than other programs because they serve the most vulnerable segments of the population. Although DVA programs are federally funded, the historical justification for a somewhat limited appeal process was that these benefits were discretionary. The social insurance programs (DI, Medicare) theoretically have somewhat more latitude in meeting due process requirements for review and appeal procedures than do entitlement programs. In practice, however, the 187 review and appeal procedures of DI are governed by the same statutory and regulatory language as SSI. Structure of Program Administration-When a benefit program directly administers its own review and appeal process, its obligation to provide beneficiaries with due process is clear. When a program delegates authority for part or all of the review and appeal process to a private organization, the legal relationship of that organization to the agency becomes critical to determining its due process-related obligations to beneficiaries. Medicare-Medicare, for example, has delegated an extraordinary amount of authority over the review and appeal processes in all of its programs to various private organizations—insurance companies, HMOs and PROS. Commentators have identified two key issues resulting from this delegation that those designing a new benefit program need to consider: 1) the appropriateness of delegating major program functions to private organizations; and 2) the adequacy of the procedures under this arrangement to protect Medicare beneficiaries' interests. 31 The U.S. Supreme Court in Schweiker v. McClure, 32 decided that hearings under Medicare Part B, delegated by HCFA to private insurance carriers, are constitutional if they provide adequate procedural due process. Despite this decision, the issue of the appropriateness of delegating benefit determinations to private contractors remains controversial. In 1986, Congress enacted provisions requiring that, at a beneficiary's request, HCFA must provide for a hearing by an SSA ALJ on appeal from a Part B carrier hearing if the amount in issue exceeds $500.33 Even though the ALJ is an employee of SSA, the office of ALJ is mandated to provide independent adjudication. Social Security Programs-The Disability Advisory Committee to the Commissioner of Social Security was appointed in February 1989 to examine and make recommendations improving the effectiveness of the SSA (disability claims review) and appeal process. As contractors to SSA, state DDSs make initial claims and reconsideration determinations regarding eligibility for medical disability pensions. The committee reported a lack of uniformity among state DDS personnel in application of standards to specific eligibility determinations. It found that a wide variation among states in allowance rates had resulted in a high rate of appeals and reversals of determinations at the ALJ level.34 It recommended that SSA pursue specific management initiatives to improve uniformity in, and accountability for, disability determinations among DDSs. 35 Cost Containment Measures-Ideally, cost containment decisions should be made in relationship to a benefit program's basic policies and practices, not in the design or operation of its review and appeal procedures. Benefit programs have been criticized, however, for using the review and appeal process to balance cost containment considerations against program requirements that funds be disbursed to eligible beneficiaries. Containing Costs Within Benefit Programs-Two significant approaches to containing costs are: 1) to reduce administrative expenditures, including expenditures on review and appeal procedures and 2) to increase determinations of noneligibility for benefits. 36 Selection of either of these options may involve both a monetary cost to the program and a cost in program credibility. The first approach may limit an agency in offering an effective review and appeal process. SSA, for example, has been criticized by the National Association of Disability Examiners (NADE) when, as part of a drive to increase administrative efficiency, it placed a limit of 37 percent on the number of cases in which disability examiners can hire consulting physicians to examine beneficiaries. NADE asserts that this seriously disadvantages beneficiaries because it suppresses the examiner's ability to create an adequate record. 37 The second approach may result in incorrect and unfair disability determinations. These could lead, in turn, to increased resort by beneficiaries to the review and appeal process. A recent congressionally-mandated report of the Advisory Committee on Medicare Home Health Care that examined the reasons for an overwhelming number of home care benefit denials found that the increase in denials was related in part to deliberate HCFA practices. 38 Containing Costs Through Placement of Risk-Congress has developed specific policies intended to contain costs by placing the risk for inappropriate use of the health care system on providers and beneficiaries rather than on benefit programs. One such policy re 34 Disability Advisory Committee to the Commissioner of Social Security, Report (July 25, 1989), 1. 35 Disability Advisory Committee, Report, Tab B, 2, 17–18. 36 Eileen Sweeney, National Senior Citizens Law Center, conversation with author (Washington D.C.: November 1, 1989); see Duggan v. Bowen, 691 F.Supp. 1487, 1500 (DDC 1988). 37 K.J. Gunter, NADE President, letter to David Rust, Social Security Administration, U.S. Department of Health and Human Services, April 1989. 38 Advisory Committee on Medicare Home Health Care, Report to Congress and the Health Care Financing Administration, July 1, 1989. quires prospective payment and bases it on pre-established Diagnosis Related Groups (DRGs) within which a beneficiary's condition falls. It bases reimbursement on the average length and cost of treatment for a condition rather than on the actual cost of services provided. Another policy establishes liability in beneficiaries and providers for the cost of services already provided that are not covered by Medicare's "medically necessary" standard. A policy waiving liability of beneficiaries or providers deemed unaware that Medicare would not cover the service was adopted subsequently to mitigate the impact of the first policy. In such situations, either Medicare or the provider must bear the cost of the care provided. If Medicare determines that the provider should have been aware that the service or confinement was not covered by Medicare, the provider is liable. Finally, Congress has authorized HCFA to contract with risk HMOs to provide medical care to those Medicare beneficiaries choosing this option. These private organizations provide care to members based on a pre-determined per capita fee. Reimbursement from Medicare is based on these fees, so that the burden of estimating accurately the cost of medical care for a contract period falls on the HMO. The HMO is able to pass on the burden of underestimating costs to beneficiaries by limiting or denying health care in certain situations in order to reduce costs. The economic and public policy considerations of risk placement are complex. Placing a heavy risk for incorrect decisions as to covered services on providers has led them, quite naturally, to attempt in various ways to transfer this burden to beneficiaries. Transferring Costs to Beneficiaries-SNFs and HHA's-With respect to SNFs and HHAs, Medicare Part A encourages providers to transfer the risk for noncovered services to beneficiaries by requiring beneficiary claims to be made by providers on behalf of beneficiaries, rather than by beneficiaries directly. But Medicare also penalizes providers for submitting too many beneficiary requests for payment for services Medicare does not cover. Frequently, if service providers are unsure about whether Medicare will cover the costs of a particular service, they simply inform beneficiaries that the service is not covered, rather than waiting for a Medicare determination as to coverage. In this way, providers can request payment directly from the patient and not run the risk of providing an expensive service for which, at some later date, Medicare may refuse reim bursement. 39 This practice leaves beneficiaries unable to exercise their review and appeal rights because technically there has never been a decision of noncoverage made by Medicare. Theoretically, beneficiaries can demand that providers submit claims to Medicare on their behalf. Beneficiaries' advocates indicate that most do not do so. This may be either because they are uninformed of their rights or are unwilling to antagonize the providers whose interests they perceive as conflicting with their own, but on whom they depend for essential care.40 In addition to inhibiting beneficiaries in the exercise of their review and appeal rights, a system that makes providers responsible for claims decisions undermines the trust relationship critical to their ability to serve their patients effectively. In the case of Medicare, the result has been to increase both beneficiary and provider dissatisfaction with Medicare's ability to make fair decisions. Recently, HCFA entered into a settlement agreement with representatives of beneficiaries whereby it agreed to require that providers give beneficiaries written notice, uniform among all providers, of the right to request a Medicare determination if the provider decides that particular services are not covered by Medicare, and to withhold request for payment until after the fiscal intermediary's initial Medicare decision.41 While this agreement partially alleviates concerns of beneficiaries, it increases the burden on providers, and inadequately addresses the basic source of conflict between the two. A policy that would allow beneficiaries to submit claims themselves and to withhold payment until they are either reimbursed or have exhausted appeal rights might satisfy beneficiaries' concerns. But the cost to providers of extensively deferred payment for services would be substantial. Transferring Costs to Beneficiaries-Hospitals-For beneficiaries in hospitals, the verbal request from the hospital or physician that the patient leave could also result in denial of covered care. Patients are given a general notice of rights at the time of admission that states, among other things, that they may formally object to such a request. Representatives of beneficiaries are concerned, however, that most patients would not be able to advocate effectively about their discharges because of their illness or the stress of hospitalization. Many may not even remember receiving 39 Susan Pettey, American Association of Homes for the Aging, conversation with author, Washington, D.C., November 30, 1989; Selected Staff of Bureau of Program Operations, Health Care Financing Administration, conversation with author (Baltimore, Md.: November 17, 1989). 40 William Dombi, National Home Care Association, conversation with author (Washington, D.C.: October 11, 1989). 41 Sarrasat v. Sullivan, C88-201-61 RPA USDC, NDCal. (May 4, 1989). a statement of rights.42 Upon being told it is time to leave the hospital and that Medicare will not cover a continued stay, most beneficiaries leave voluntarily. But the request itself is not a Medicare determination of noncoverage. Particularly where the hospital and physician agree about the discharge, beneficiaries rely on their expert judgment, both that continued hospitalization is not necessary, and that Medicare will no longer pay for it. Because of the DRG system, hospitals, in particular, have incentives similar to SNFs prematurely to discharge beneficiaries whose continued stay might not be covered by Medicare. Otherwise, they may be held liable if the services ultimately are not covered and they have failed to so notify the beneficiary. There is, however, limited protection of beneficiaries against arbitrary discharge: if a beneficiary is rehospitalized in any hospital for a similar condition within 30 days of discharge, the hospital of original discharge is penalized. Program Considerations in Long-Term Care Although the focus of a long-term care program would be somewhat different from that of the existing benefit programs, each of the program considerations described above is critical to the design of its review and appeal procedures. In addition, particular characteristics of the benefits and structure of a long-term care program will have an impact on its review and appeal procedures. Determination of Benefits-Significant considerations in determining eligibility for participation in a long-term care program and for receiving reimbursement for specific services are: • Once an individual is determined to be eligible for long-term care, decisions are more likely to be about changes in the amount or level of services to which she/he is entitled than about the total discontinuation of all services to that individual • A beneficiary's needs generally will be for custodial or social support rather than skilled nursing or medical services • When available, a beneficiary's family or members of her/his informal support system are likely to participate with the beneficiary and long-term care program staff in planning for a beneficiary's care 42 Charles C. Hulin, Center for Medicare Advocacy, telephone conversation with author, November 8, 1989. • Long-term care involves decisionmaking about benefits to meet both chronic and acute care needs, rather than focusing on one or the other. • The central role of the case manager-one who designs, coordinates and monitors the long-term care plan for the beneficiary-is without parallel in existing benefit programs in terms of power over the beneficiary, and potential for ambivalent allegiance between the client/beneficiary and the long-term care program employer. Program Structure-Inevitably, some decisions made about the structure of the long-term care program will have adverse economic, social or therapeutic consequences for beneficiaries. Such decisions will be a basis for beneficiary complaints. These include: • whether an applicant meets the various eligibility criteria such as sufficient dependency in ADLs to participate in the program ⚫ whether the setting in which a beneficiary could benefit most is community or institutional care • whether, and at what point, a beneficiary is eligible for specific benefits or services, and the duration and frequency of these services • establishing the appropriate relationship of the individual or organization responsible for assessing eligibility to those responsible for developing care plans or making specific care-related decisions about beneficiaries Medicare and Medicaid, and in Medicare HMOs.) The significant care-related decisions in a long-term care program are likely to be made by a case manager-for example, a nurse or social worker-who establishes a care plan and manages the care to be provided the beneficiary. If the beneficiary is able to remain in the community, the case manager will identify and arrange for the provision of appropriate services to the beneficiary, and determine the number of, hours, days or weeks the service should be provided. A critical issue for the case manager may be that of serving two masters. The case manager must have a relationship of trust with the beneficiary in order to gain the cooperation necessary to implement appropriate care decisions. She/he might also be expected by the agency financing or administering the program to enforce certain program guidelines that result in containing costs by limiting services or benefits. Cost Containment—Reasonable cost containment measures would include efficient division of the case manager's time among beneficiaries, or developing care plans that are closely tailored to a beneficiary's minimum needs. If a case manager is unduly vulnerable to pressure from the benefit program, it may become difficult to resist directives to increase the case load or trim the care plan. If the program is financed similarly to Medicare HMOs, so that the case manager receives a flat per-client monthly fee based on a predetermined estimate of cost of service to all clients served, there is likely to be substantial incentive to keep costs down. If this occurs at the expense of fair decisions about services to beneficiaries, a due process problem can arise. One experienced benefit program administrator warned that a case manager under the close control of the funding agency, making decisions about benefits, generally is perceived with skepticism by the beneficiaries. 43 Mitigating Considerations-According to the National Association of State Units on Aging (NASUA), the experience of state financed long-term care programs is that case managers in community care programs have not been placed in conflicting roles. Currently, in most states, the cost of community care is tied to the daily nursing home rate which is substantially higher than the cost of services in the community. Consequently, home care programs rarely spend their annual budgets and are under no pressure to reduce program costs beyond appropriate levels. In addition, community long-term care case managers may tend to authorize more services than most older persons want. Many elderly are wary of managed 43 Patricia Booth, Division of Peer Review, Office of Peer Review, Health Quality Standard Bureau, Health Care Financing Administration, conversation with author (Baltimore Md.: November 17, 1989). care programs and see those who provide these services as intruders into their lives. Also, the community-based nature of the program may work as a counter-weight to any bureaucratic pressures on case managers to favor administrative considerations over client needs. In contrast to the Medicare program, whose initial decisionmakers are distant, inaccessible insurance companies, community long-term care case managers are attuned to community values and are required to maintain an ongoing relationship with clients about whom they make adverse decisions. 44 WHAT HAS BEEN THE EXPERIENCE The primary purpose of due process is not to insure that as many beneficiaries as possible be determined eligible for benefits. Rather it is to increase the capacity for fair and accurate decisionmaking about beneficiaries' rights-"to pay worthy claims and reject unworthy ones." 45 The Complexity of the Process The review and appeal procedures of each of the benefit programs described in this report are required to meet constitutional requirements for review and appeal procedures. But the concepts of what constitutes due process are complex and subject to differing interpretations. During the last decade the review and appeal procedures of Medicare, DI, SSI and DVA have all been the targets of extensive Congressional oversight. This has led to legislation revamping some of these procedures in order to provide increased due process to beneficiaries. In addition, in recent years, the federal courts have ordered the agencies administering these programs to make major changes in review and appeal procedures to further protect beneficiaries. Finally, several administrative commission reports and U.S. General Accounting Office audits have recommended ways to ensure an improved level of due 44 Diane Justice, National Association of State Units on Aging, conversation with author (Washington, D.C.: November 15, 1989). 45 Jerry Mashaw, "Bureaucratic Justice," Symposium on Federal Disability Benefit Programs, American Bar Association, 1985, 191. |