Safeguarding the interests of people with AIDS in managed care settings.

• Author: Blum, John D.
• Position: Symposium on Health Care Policy: What Lessons Have We Learned from the AIDS Pandemic?

Routine encounters with health care advertisements have become standard realities of daily life. In contrast to prior decades, it hardly seems striking in the late 1990s to see glossy, expensive ads for health care institutions and managed care plans.(1) Recently, an advertisement for a large managed care plan appeared in a national magazine, which, in the succinct, stylish format of Madison Avenue, touted the managed care plan's commitment to provide state of the art medical care. The copy detailed the health plan's pledge to seek appropriate clinical advice from leading academic medical centers on issues concerning treatment and prevention.(2) The various programs announced in the ad are impressive, and on their face quite progressive. But in the midst of the ad copy, the text states that the primary focus of health care must be quality: "It should be the only reason we're in this business."(3) What is truly noteworthy is not the plan's stated dedication to quality, but its willingness in promotional material to openly acknowledge that the sum total of its endeavors are commercial. The matter of fact statement that a managed care plan is a business is hardly a startling admission, but it is an admission which subsumes the purported commitment to quality, and reaches the essence of what organized health care delivery has become at the end of the twentieth century.

Managed care, in all of its manifestations, is the dominant force in the American health care landscape, and, within this context, issues of individual and public health need to be evaluated.(4) The managed care arena has become controversial as opponents of this form of medical care quote an ever increasing litany of anecdotes about the inadequacies and inequities that this business-oriented system engenders.(5) At the other extreme, proponents of managed care, purchasers and clinicians alike, see managed care organizations WOO as vehicles to bring about order, reduce costs, provide medical treatment, and in addition, promote health and continuity of care.(6) Like all areas of controversy, it is likely that the truth about the viability of managed care lies somewhere in the middle of an undefined world of efficient treatment and health promotion/protection. Seemingly, the real test for managed care businesses is whether they can successfully extend their broad range of services not only to healthy populations, but to the aged and chronically ill. The question of whether MCOs can serve all sectors of society effectively is ultimately a question of whether a commercial model can remain economically viable when serving populations that have profound medical needs. In addition, MCOs will be tested through their increasing linkages to government-funded programs, which bring to the managed care world the aged, the poor, and the disabled within highly regulated formats.(7)

The purpose of this Article is to explore the managed care medical treatment format in the context of AIDS with the overall focus on ways to safeguard the interests of HIV/AIDS patients. While the Article is driven by clinical concerns about whether the commercial managed care system can meet the needs of people with AIDS (PWA), that is a question beyond the scope of the Article. Rather the specific purposes of this Article are to explore, in a public context, the types of problems regulators confront in using managed care to treat PWAs, and in the private context, the development of legal rights that PWAs have in protecting themselves in coverage disputes with MCOs. The first portion of the Article will be devoted to consideration of Medicaid managed care, and in this context, particular issues such as capitation, risk sharing, availability of primary care physicians, drug treatment policies, quality assurance, and scope of benefits will be considered.(8) The second half of the Article will focus on a series of legal approaches that PWAs can use in private sector MCO coverage disputes.(9) Specific areas to be explored in the private sector context will be coverage litigation, the implications of the Employee Retirement Income Security Act of 1974 (ERISA)(10) and the Americans with Disabilities Act (ADA),(11) existing and pending patient protection measures, and private accreditation standards.

1. BACKGROUND

   The managed care movement, like other major developments in American health policy, cannot be succinctly described or easily categorized. For analytical purposes, managed care can be seen as a broad range of organizational structures that combine insurance functions with health-care vehicles.(12) The most characteristic entity in the range of managed care plans is the health maintenance organization (HMO), but there is an increasing proliferation of new plan structures, and variations in recognized models that collectively define this area. Another approach to analyzing managed care focuses on the generic characteristics of plans, and is less focused on structural elements. While each managed care plan presents unique elements, certain commonalities such as prepayment (capitation/discounted fee-for-service), use of primary care physician gatekeepers, limits on specialty care, and use of drug formularies are in evidence across plan models.(13) It is these, and other common managed care practices, that are synonymous with the industry and these practices are now the focal points for analysis and discussion of the managed care systems.

   In deciphering the impact of managed care on PWAs, it seems that consideration of the impact of particular industry practices would be more fruitful than consideration of how plan structures impact this patient population. Clearly, it is the generic issues noted, as well as others like plan information policies, appeal rights, and scope of benefits, that are of great concern to PWAs. Still, MCO structural issues should not be overlooked, as the regulatory dictates that shape the construction and operation of the various models do vary and impact on plan policies. For example, the highly regulated HMO model is more apt to require consumer protections such as appeal rights, or mandatory quality assurance plans, but newer less regulated models, such as Provider Sponsored Organizations (PSO), may not have significant consumer protection requirements.

   The current climate surrounding managed care has become highly negative.(14) Stories about MCO abuses abound, ranging from inappropriate denials of medical coverage to arbitrary exclusions of health providers from plans.(15) The negative press has sparked an avalanche of state legislative activity resulting in a wide range of so-called patient protection laws.(16) The state initiatives have been followed by congressional proposals as more politicians see managed care reform as an issue that resonates with voters.(17)

   To automatically assume that managed care will have dire consequences for PWAs may be unfair. Clearly, MCOs have the potential to manage chronic illness effectively, educate patients about complex drug therapies, and provide greater continuity of care.(18) The realities of fee-for-service medicine have not proven to be optimal for PWAs, as they struggle to find care in a very complex and disjointed system. In fact, there are several experiments in the managed care world in which plans are being created exclusively to serve PWAs.(19) At this point, there is a lack of empirical data on which to decipher the pros and cons of managed care in reference to PWAs. While there is a need for calm analysis to offset the mounting fears over the ill effects of managed care, there are valid reasons for concern about the potential harms that an economically driven health system may hold in store for vulnerable populations, such as PWAs. Some of the negative anecdotes about MCOs may be discounted, but a strong message of caution is being raised, and taken together with the realities of MCO financial arrangements, consideration of effective legal safeguards for PWAs in this developing arena of medical care seems warranted.

2. MEDICAID MANAGED CARE

   State Medicaid programs are the largest single source of public funding support for HIV/AIDS medical services, accounting for seven in ten public dollars spent in the area.(20) It is estimated that Medicaid covers approximately fifty percent of all PWAs.(21) Unquestionably, Medicaid regulations and policies have a direct and dramatic impact on national AIDS treatment issues. Through the section 1115(22) and section 1915(b)(23) Medicaid waiver programs, most states have developed managed care programs for their entire enrolled populations or various population subsets.(24) The state managed care efforts are variable; in some states they are mandatory, involving all Medicaid enrollees, and relying heavily on the use of risk bearing entities; in other states, the programs are voluntary, and use primary care case management (PCCM) programs in which financial risk is not transferred.(25)

   Managed care raises a number of issues that are both common to all enrollees in the Medicaid program and unique in the way they affect PWAs.(26) Medicaid eligibility rules are complex, frequently changing, and variable across jurisdictions. There are two primary vehicles for obtaining Medicaid eligibility, the Temporary Assistant to the Needy Program (TANF), which replaces the long-standing Aid To Families With Dependent Children (AFDC), and the Supplemental Security Income (SSI) program for the disabled.(27) By and large poor women and children make up the majority of individuals who qualify for Medicaid as categorically needy individuals; a population which has experienced a dramatic growth in HIV/AIDS.(28) Individuals whose income and assets are too high to be classified as categorically needy, may qualify for Medicaid through a spend-down program.(29) Under a spend-down arrangement, those whose monthly medical bills reach a certain level are deemed impoverished as a result of...