Deal With Patient Complaints Before Arrival of Subpoenas

MANAGED CARE February 2003. ©MediMedia USA

HMOs should adopt a conflict-management, rather than dispute-resolution, approach to patient complaints.

Kathy L. Cerminara, JD

It is now clear that many patients in managed care organizations have a right to external review of certain managed care decisions in certain states. The Supreme Court ruled last June, in Rush Prudential Insurance v. Moran, that managed care companies are not shielded from the effect of such state laws. Rather, states may indeed accord citizens the right to take certain health plan decisions to external, independent reviewers (short of the courts).

The Supreme Court ruled that federal law did not preempt, or invalidate, an Illinois law requiring binding independent external review, if requested by a patient, of decisions by an HMO regarding medical necessity. The legal fallout has commenced, with a series of interpretive cases coming in the wake of this seminal decision.

Moran does not automatically indicate that all state external review laws will be effective. Rather, all that is clear in its aftermath is that federal law does not invalidate all such state laws. Court battles now can emerge on a state-by-state basis, with some external review mandates being held valid and some being held invalid.

Little consistency

Such additional court battles, however, seem to consume more time, energy, and money than they are worth. In fact, according to a recent report by the Kaiser Family Foundation, patients generally do not take advantage of external review procedures that are available, and their failure to take advantage of such procedures is understandable.

Some claims must go to arbitration. Some plan decisions can be submitted to external review, but some are mediated. Some patients have available state-mandated or state-sponsored ombudsman programs. But there is little or no consistency and perhaps even less predictability.

Eleanor D. Kinney, in Protecting American Health Care Consumers, says that a patient moving from one health care plan to another, or one with more than one type of complaint, often must follow entirely different procedures from setting to setting or complaint to complaint.

Patient confusion

Some are mandated; some are optional; and the patient receives little or no assistance in negotiating the maze. Patient failure to use external review may reflect the resulting confusion. It also probably contributes to low levels of consumer satisfaction with managed care.

Instead of troubleshooting, case by case, through processes such as external review, corporate officers in the health care industry should implement a more broad-based approach to working through tensions and conflicts with patients.

A multifaceted approach to conflict management, rather than piecemeal efforts at dispute resolution, would assist in easing tensions by facilitating a flow of information and helping smooth the bureaucratic process accompanying utilization review efforts and medical necessity documentation. In other words, it could help patients accept plan decisions by imparting to them a sense of procedural justice.

Decisions are more likely to be accepted when the procedure used to generate the decision allows participation by those affected, say E. Allan Lind and Tom R. Tyler in The Social Psychology of Procedural Justice. In other words, if patients are more involved in the process leading to resolution of their difficulties, they will be more likely to accept the decisions made.

When processes are not one-size-fits-all — when they are tailored to the sort of conflict each patient is experiencing — each patient is more likely to participate actively in resolving the conflict.

When patients have such control, even if they have no “vote” in the eventual decision, procedural justice research indicates that they will accept more readily even resolutions that do not reflect what they originally sought.

Range of patient concerns

Patients in conflict with their health care providers or payers seek to voice complaints about the way they are treated and try to resolve their conflicts regardless of whether their disputes can be resolved through the legal system or external review procedures.

Much patient frustration with the health care system stems from misunderstanding and misinformation rather than from actual denial of rights. In three representative cases that crossed this author’s desk when she worked as a volunteer with the Managed Care Ombudsman Committee, for example, the callers contacted the volunteer agency for assistance with matters that presented nothing more than difficulties in navigating the system.

One involved a caller whose son had broken his finger. The emergency room physician directed her to obtain a referral to an orthopedic surgeon from the boy’s primary care physician. The primary care physician agreed with the need for the referral, but the caller encountered severe resistance in actually scheduling the appointment.

According to the primary care physician’s office, she needed an appointment before the referral form could be completed. The appointment, however, was more difficult to schedule than it should have been.

No response

The receptionist at the specialist’s office said she could not schedule an appointment without a response to an e-mail she sent requesting an appointment time. She did not receive a response to the e-mail for three or four days.

This caller’s main complaint was the manner in which she had been treated; her son had received medical care by the time she contacted the committee. She wanted to ensure that others did not experience the frustration she had experienced.

The main problem stemmed from the physicians’ offices, but perhaps the system could be improved by the plan’s permitting completion of a referral form without a specific physician appointment, or better communicating to its physicians that it expected more professional service from physician office staffs. Unfortunately, those concrete suggestions for improvement were never explored, and the caller took away a negative feeling about the plan that had required the referral in the first place.

Simple phone call

The other two calls involved patients who did not realize that they could obtain care on their own with one simple telephone call each. The patients had been prescribed medications by their primary care physicians but required further medical-necessity documentation to secure coverage of those prescriptions.

As the representatives of the health plans in question told the committee, the provision of such documentation almost always resulted in coverage of these particular prescriptions. One call to each physician’s office produced the required medical-necessity fax, and coverage in fact resulted.

Yet the patients had no clue that making a single call was all they had to do. Rather, they blamed the managed care company for refusing to cover their needed prescriptions, and they reported those companies to the committee after receiving the initial refusals.

In none of these cases was the managed care company in question violating anyone’s rights; in all, the patients eventually received the requested care. In the latter two cases, the patients would have been spared a great deal of frustration had they simply been better informed from the beginning. In the first case, the caller sought to improve the system. All these patients needed assistance in navigating the system, and they only knew that they needed such assistance once conflict arose.

What’s a dispute?

To better handle these sorts of complaints, as well as to facilitate the resolution of more complex issues, organizations managing health care must stop treating all instances of conflict as actual disputes. Institutions of all types experience conflict on a daily basis. As Cathy A. Costantino and Christina Sickles Merchant put it in their book, Designing Conflict Management Systems: A Guide To Creating Productive and Healthy Organizations, conflict is “the process of expressing dissatisfaction, disagreement, or unmet expectations with any organizational interchange.” When conflict remains unresolved, it may escalate into a dispute, but conflict itself is a natural, inevitable condition, occurring every day, especially in times of change.

Because conflict is a given in any organization, and because health care is delivered and financed through increasingly large corporations, health care executives must recognize that conflict is ubiquitous. As Leonard J. Marcus puts it in Renegotiating Health Care: Resolving Conflict to Build Collaboration, health care actually may experience more than its share of conflict, given the transition from fee-for-service provision of care to managed care, the increasing size of the corporate entities involved in the provision of care, and the regulatory concerns riddling the industry.

Broad-based approach

In recognition of this, rather than rely upon one-size-fits-all solutions such as external review, health care industry executives should adopt a more broad-based and more multifaceted approach to the conflict prevalent in the industry. Just as medical conditions, reactions to treatments, care plans, and patient perceptions are all individual, so it is true that no one type of dispute or conflict resolution method can fit any health care setting.

Adoption of varied solutions to address various types of issues also would help patients feel an increased sense of procedural justice when dealing with the health care system.

These examples illustrate two ways to distinguish among instances of patient conflict for purposes of determining which sort of conflict management tool should be applied to each case. The first lies in examining the type of issue presented by each caller. The mother who sought to improve practices for future patients seeking referrals actually presents an opportunity for her managed care organization to improve the way it serves its patients.

A consensual, problem-solving, negotiating session — perhaps with a mediator — could help both sides feel that progress had been made on that score. In contrast, a person seeking coverage of a prescription, thus presenting a claim of entitlement under interpretation of contract language, may be best served by an adjudicatory system of dispute resolution such as external review.

Types of litigants

Second, these complaints demonstrate that it is important to think about the characteristics of each caller when determining which type of complaint or dispute resolution procedure would fit that caller’s needs.

In Rules Versus Relationships: The Ethnography of Legal Discourse, authors John M. Conley and William M. O’Barr say that in studies of court proceedings, for example, scholars have identified a distinction between rights-oriented and relationship-oriented litigants. Relational litigants seek to incorporate into their claims both notions of social need and entitlement and details about social relationships.

Rights-oriented (also called rule-oriented) litigants view the law as a set of rules applying to factual situations irrespective of social status or situation. Relational litigants wish courts would attend to their feelings as well as their actual claims, but they are unlikely to achieve this goal unless their judges are also relational in orientation.

Analogously, patients who describe their concerns by focusing on rights and rules may feel quite comfortable with, and achieve a sense of procedural justice and participation in, adjudicatory settings such as arbitration or external review.

Those who want to discuss their entire relationship with a health care entity, and who seek to incorporate in their complaints both rights-based claims and relational concerns, however, may be better served by mediation, in which they will have an opportunity to exercise more control over process and to express concerns that may not be addressed in an adjudicatory setting.

Sometimes no such formalized procedure is required. The callers to the committee who did not understand the need for documentation of the medical necessity of their prescriptions would have felt much more fairly treated if someone had simply explained, in an understandable, nonconfrontational way, why the managed care company was requesting documentation. In all likelihood, had that step been taken, the discomfort of those patients would not have escalated into disputes over the coverage of those prescriptions.

As these examples indicate, many patients “merely” experiencing dissonance or discomfort because they do not understand a step of the bureaucratic process necessary to achieve care have nowhere to turn to receive reliable information that could ease their feelings of conflict and tension.

Patients with no rights-based claims who seek to improve the procedures they experienced, such as the mother who wanted to improve referral procedures, have no reliable way to do that.

And persons with rights-based claims have available as options only predefined dispute resolution procedures that may or may not satisfy their sense of having received procedural justice.


Managed care organizations can benefit from patient expressions of confusion and dissatisfaction if they recognize these distinctions. Adopting a conflict-management, rather than a dispute-resolution, approach makes good business sense.

For example, dealing with a source of conflict before the situation erupts into a dispute potentially enables managed care organizations to avoid the cost of litigation.

Procedural justice research indicates that patients who feel as if they have been treated with respect throughout the process may be satisfied with — or at least not feel bitter about — decisions that do not go their way.

Even when conflict-management techniques indicate that a treatment previously denied coverage should have been approved, learning that through a comparatively low-cost, nonconfrontational process likely results in cost savings when compared with the costs of employing legal counsel to consider the matter.

Reaching such a conclusion will also likely take less time than an external review procedure or legal proceedings. As a result, the treatment in question is likely be administered in time to prevent higher future costs in the form of more advanced, complex treatments necessitated by the lack of the initial treatment prescribed.

Finally, internalizing such steps is more likely to increase trust than is compliance with review procedures required by an external force such as a state legislature. External imposition of review mechanisms implies social distrust of managed care, facilitating the development of patient distrust of an individual managed care organization.

By adopting conflict management procedures on its own initiative, a managed care organization can demonstrate to patients that it is concerned about them rather than viewing them merely as covered lives and their care as merely potential financial liability.

The distrust managed care organizations face can only harm the health care industry. If patients have a choice of health plans, distrust can result in individual exit from a relationship with a managed care organization in which they have lost trust.

Even if patients have no choice, complaints and distrust easily can cause employers or other groups to institutionally exit from contractual relationships with managed care organizations.

The industry can and should do more to work positively with conflict and tensions, seizing upon them as opportunities to improve and gain patient trust rather than forcing each expressed instance of conflict into a previously identified procedural pigeonhole.

Doing so will increase patients’ senses of satisfaction, even when they do not receive the answers they want.

Kathy L. Cerminara, JD, is associate professor and director of the master’s in health law program at Nova Southeastern University. Portions of this article originally appeared in the Loyola University Chicago Law Journal.

Four ways to improve conflict management

Managed care organizations should adopt a more “therapeutic” method of dealing with complainants, each of whose conflict may or may not rise to the level of a dispute. Four steps will implement this suggestion.

Provide conflict management training to all who receive complaints. With such training, the people answering the telephone can better identify types of complaints and callers and respond constructively to those callers. The callers in turn will feel more that they have received procedural justice from the beginning of their interactions with the managed care organization. Such feelings will help ease the rest of the conflict management process.

Institute conflict management programs cutting across internal departmental divisions. One good model may resemble ombudsman-type programs, which centralize conflict-management authority in a high-level office of relative independence.

Such an official has authority to conduct far-ranging investigations and, sometimes, to recommend solutions. In a company that has adopted this sort of system, the patient who has encountered difficulty would deal first with customer service representatives who, ideally, have received training in conflict management.

Thereafter, if the conflict were not resolved through provision of information or other important but reasonably simple front-line efforts, the patient would reach a key conflict management figure.

The initial conflict management contact person (or members of an initial contact staff) could discuss matters with patients, determine patients’ goals, and help determine what action is needed to move toward resolution of the conflict.

Begin to proactively identify events that always or almost always erupt into conflict. Examination of “problem files” probably will indicate that particular diagnoses trigger angst among patients and their family members. It similarly is likely to show that denial of coverage for treatments over some particular dollar amount is almost certain to trigger a strong negative response, including litigation or pursuit nearly to litigation of requests for coverage.

Those on the front lines then could be armed with such information when fielding questions and complaints for the first time; if a caller’s expression of dissatisfaction falls into one of those categories, that caller immediately could be connected with the ombudsman’s office for assistance.

Provide appropriate funding, staff, and support. Much has been written about the diminishing levels of trust that patients have shown since the advent of large-scale efforts to manage care.

Health care organizations that do not handle conflict with patients well are likely to lose trust, resulting in either a direct loss of subscribers or a diminution in reputation.

Thus, reliance on volunteers or on low-paid staff to handle tasks of this magnitude, which should be central to the organizations’ missions, will not suffice.

Reliance on people who have little or no incentive to handle complaints properly is not likely to enhance trust in the organization.

Taking this conflict-management, rather than dispute-resolution, approach to patients’ problems in the health care industry thus would introduce some flexibility into a fairly rigid yet complex system.

MANAGED CARE February 2003. ©MediMedia USA