Managed Care Consumer Protection Fact Sheet

Patient Access to Responsible Care Act (PARCA) - Norwood/D'Amato Patients' Bill of Rights Act - Dingell/Daschle/Kennedy

What Consumer Rights Are Protected?

Bipartisan support for legislation protecting consumer rights in private sector HMOs and managed care health plans is sweeping across Capitol Hill. The two principal bills are the "Patient Access to Responsible Care Act" or PARCA - H.R. 1415/S. 644 sponsored by Rep. Charlie Norwood (R-GA.) and Sen. Alfonse D'Amato (R-NY); and the "Patients' Bill of Rights Act" - H.R. 3605/S. 1890 - sponsored by Rep. John Dingell (D-MI.), and Senators Tom Daschle (D-SD) and Ted Kennedy (D-MA.). The latter bill enjoys the formal endorsement of President Clinton. These measures are different in many respects, but when it comes to consumer protections for adults with mental illnesses and children with serious mental and emotional disturbances, they contain very similar provisions.

Emergency Care - Prior authorization for emergency care is prohibited and coverage of emergency care is based upon a "prudent layperson" standard, meaning that HMOs must cover an emergency visit based on symptoms rather than final diagnosis. Because people with serious mental disorders are heavy users of urgent care services, this provision is very important.

Guaranteed Access To Mental Health Specialist - Consumers with "serious or chronic health conditions," including people with mental disorders, can either:

(a.) designate a mental health specialist as their primary care "gatekeeper," or
(b.) have a "standing referral" to ease access to a psychiatrist, psychologist, counselor, etc.

Access To Medications - The Dingell/Kennedy bill requires HMOs to disclose formulary rules, ("formularies" are the list of drugs approved by health plans) and any restrictions. Moreover, the bill permits physicians to prescribe medications outside of the formulary when medically necessary. This provision should help with two serious problems:

(a.) fail first policies; and
(b.) downward generic substitution (see below).

Grievance and Appeals Processes - Both bills establish strong guidelines for internal and external appeals for instances in which HMOs deny medically necessary care, but only Dingell/Kennedy creates a national ombudsman - or advocacy - program for people with mental disorders who appeal coverage decisions (i.e., those cases where a health plan won't pay for a particular service, or where the HMO disagrees with your mental health professional and won't authorize the outpatient care your mental health professional thinks you need.)

Why Should Congress Pass Consumer Rights Legislation?

• At last count, over 175 million Americans received their mental health care through some kind of managed care arrangement.
• There have been numerous documented instances in which people in psychiatric crisis have been denied needed inpatient hospital care - leading directly to attempted suicides. Three such cases were reported in a January 1997 segment aired on the CBS program "60 Minutes."
• In the public sector, until they responded to protests from NNMA and its state affiliates, California, Georgia and Kentucky had prior authorization programs for their drug formularies, which adhered to the following rules:
• Fail first/fail twice policies - meaning the consumer had to "fail" on older medications or generic drugs before being given access to modem atypical medications. "Failure" normally involves an inpatient hospital admission. The administrators of these programs didn't seem to realize that decompensation into psychiatric crisis leaves the consumer, in many instances, with permanent brain damage.
• Downward generic substitution -- To save money, these states would take people with mental illnesses off effective medications and insist that they take cheaper generic substitutes (often at their peril).
• In a 1994 investigation of a private sector mental health managed care program in Rhode Island (administered by United Behavioral Healthcare), it was revealed that the plan's medical director received a bonus for denying medically necessary mental health care, and United used personnel in its utilization review program to make medical decisions who no prior medical training whatsoever.