June 12, 2006

Report: Consumers Need Consistent Information,
Stronger Protection as Insurance Options Grow

Push toward consumer-directed health plans increases need for standard information to guide decision-making

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WASHINGTON—The National Committee for Quality Assurance (NCQA) today released a white paper, Protecting Consumers in an Evolving Health Insurance Market, that sets forth numerous policy recommendations to offer consumers better information about consumer-directed health plans (CDHPs) and other forms of insurance. The paper also examines the rapid growth in enrollment in consumer-directed plans, identifies numerous disparities in state regulatory and licensure requirements among states and offers suggestions to enhance consumer protection.

“Consumers deserve to have equal protection and access to information on quality and cost, regardless of where they live or the type of plan they have selected,” said Richard Sorian, NCQA Vice President for Public Policy. “Regulatory and reporting standards must keep up as insurers offer a rapidly expanding set of plans to meet the needs of their customers.”

The growth of CDHPs in the last four years has highlighted the need for stronger protections. According to America’s Health Insurance Plans, enrollment in such plans has increased nearly eightfold in the past 18 months—from 438,000 in September 2004 to over 3.1 million in January 2006. Nearly 90 percent of these plans are a form of preferred provider organization (PPO). The growth of CDHPs has far-reaching effects on such aspects of health care as access, cost, quality of care, consumer satisfaction and risk segmentation.

States regulate health insurance in order to protect consumers from insolvency and fraud, ensure market stability, and provide access and availability to health care services. But insurance laws often vary across, and even within, state lines. While most states have established standards and reporting requirements for health maintenance organizations (HMOs), they have not created similar standards for PPOs. Nearly two-thirds of insured Americans are enrolled in PPOs compared with one-third in HMOs.
The report makes several policy recommendations aimed at providing a basic set of protections for consumers, including:

• Revising health insurance standards so that all risk-assuming entities performing similar functions – including HMOs and PPOs – are regulated identically
• 
  Assuring that plans make cost and quality information available to plan enrollees and that such

information is not misleading while monitoring how well consumers understand and use these new products
The report also recommends that private accrediting organizations such as NCQA:

• Develop more comprehensive accreditation standards for PPOs, including HEDIS® reporting to permit more complete quality assessment
• Establish standards regarding whether and how appropriately plans provide enrollees cost and quality data in accreditation processes
• Determine whether and how well plans provide decision support to guide treatment choices
• Evaluate whether plans identify underuse of specific services needed for enrollees with specific chronic illness

Consumer advocates lauded the paper’s recommendations. “The growth of consumer-directed health care means that consumers are making more critical decisions about their care,” said Debra Ness, President of the National Partnership for Women and Families. “Regulators and accreditors must act to ensure that patients have the information they urgently need to make informed decisions, and to ensure that all patients have a common set of basic protections to ensure that they have access to care.” 

NCQA, through its Quality Plus program, has taken steps to implement changes that align with the paper’s recommendations. For example, Member Connections assesses how effectively health plans interact with their customers to help them understand and use their benefits, while Care Management and Health Improvement standards emphasize wellness, chronic care and complex case management.

Protecting Consumers in an Evolving Health Insurance Market, authored by Patricia A. Butler, J.D., Dr.P.H., is available on NCQA’s Web site at http://www.ncqa.org/.  

NCQA is a private, non-profit organization dedicated to improving health care quality. NCQA accredits and certifies a wide range of health care organizations, recognizes physicians and physician groups in key clinical areas and manages the evolution of HEDIS, the tool the nation’s health plans use to measure and report on their performance. NCQA is committed to providing health care quality information through the Web, media and data licensing agreements in order to help consumers, employers and others make more informed health care choices.