American Journal of Law & Medicine

Tapping and resolving consumer concerns about health care.


Consumer concerns about their health care have attracted intense attention as more Americans get care through prepaid managed care plans. A recent poll sponsored by the Kaiser Family Foundation reported that over half of Americans believe that managed care has decreased the quality of their health care.(1) Journalistic reports(2) and widely publicized court decisions(3) involving coverage denials for gravely ill people have fueled consumer concerns as well. Consumer protection and access to high quality health care is an issue that resonates deeply with the American public, and reforms are in order.

Consumers have been heard in the political system. States have been active in legislating consumer protections into state Health Maintenance Organization ("HMO") statutes, including stronger disclosure requirements and more open utilization review.(4) President Clinton has made consumer protection a cornerstone of his health policy agenda. In 1997, President Clinton convened the President's Commission on Health Care Quality and Consumer Protection, which proposed recommendations for reform and a consumer bill of rights with respect to health plans.(5) In February 1998, President Clinton ordered responsible federal agencies to implement the Commission's recommendation in federally-sponsored health insurance programs to the extent possible under federal law.(6)

Further, the 105th Congress considered major legislation to protect consumers in managed care plans through federal mandates.(7) Although tabled just before the 1998 election, all bills addressed required disclosure about benefits and coverage, utilization review and extensive requirements for grievance and appeal procedures, particularly in emergency situations.(8) The deal breaking issue was access to state tort remedies against managed care organizations ("MCOs") and the cost of consumer protections.(9) The 106th Congress considered but did not enact similar legislation.(10)

Prepaid, and other types of managed care plans, are here to stay and continue to generate consumer concerns.(11) Between 1992 and 1995, 21.7 percent of all Americans were enrolled in an HMO or other prepaid managed care plan.(12) During the same period, 33 percent of non-elderly Americans with employer-sponsored coverage were enrolled in HMOs or other prepaid health plans, while only two percent were enrolled in fee-for-service plans with no managed care features.(13) For public health insurance programs, 4.9 million Medicare beneficiaries and 13 million Medicaid recipients were enrolled in HMOs or other prepaid managed care plans.(14) All indications are, given current trends, that the proportion of the population in prepaid managed care plans is likely to increase,(15) particularly as Medicare and Medicaid move to prepaid managed care.(16)

Managed care has generated so much concern about consumer protection largely because of the way MCOs employ and pay physicians, and thereby encourage physicians to limit care.(17) MCOs usually contract with physicians or employ physicians directly. In both cases, MCOs exercise considerable power over physicians, as they control the supply of insured patients.(18) It is the methods in which MCOs pay physicians and organize their work that create incentives for physicians to undertreat plan members. Capitation pays physicians prospectively a fixed price per patient and is designed to encourage physicians to order fewer services and less intensive care.(19) Often, primary care physicians control access to specialty care and physician compensation methods penalize primary care physicians for referring patients to more costly specialists.(20) Finally, managed care plans also limit coverage of emergency care.(21)

Currently, Americans are enrolled in a mix of health plans with multiple public and private sponsors.(22) In 1997, about 225 million Americans (83.9 percent) were enrolled in some type of public or private health plan.(23) In 1997, 35.5 million Americans had health insurance through the federal Medicare program for the elderly and severely disabled, and 28.9 million through the federal-state Medicaid program for the poor.(24) Most non-elderly Americans obtain health insurance through their own employment or the employment of a family member. An estimated 61 percent of non-elderly Americans have coverage through employer-sponsored health insurance.(25) Finally, the federal-state Children's Health Insurance Program ("CHIP") covers children whose families have incomes up to 200 percent of the federal poverty level.(26)

A greater threat to health care consumers is the rise in the rate of uninsured in America. In 1997, 43 million Americans (16.1 percent) were uninsured and not enrolled in any health plan.(27) Between 1996 and 1997, the number of uninsured increased by 1.7 million to 16.1 percent of the population - a disturbing trend given the strong performance of the American economy in the 1990s.(28) Especially disturbing is the decline in employer-sponsored health coverage, particularly for families.(29) In a December 1997 poll, more than half of adults in low income working families (under $35,000 annual income) reported having been uninsured some time during the last two years.(30) Cost sharing and benefit limits in private health plans have increased in recent years. Thus, many employees decline coverage when offered.(31) Although steps have been taken to enhance private coverage for the chronically ill(32) and public coverage of poor children,(33) many Americans will remain uninsured.

This article describes and analyzes the different systems for tapping and resolving consumer concerns and complaints about their health care. It presents a typology of consumer concerns, including how they are initially manifested and ultimately resolved. This article argues that the current legal systems for identifying and resolving consumer concerns are balkanized and incomprehensible to most consumers and inaccessible to many, particularly for those without health insurance. This article concludes with a suggested agenda for future research, and an outline of a theory for fair procedure to guide genuine reform.


Consumer concerns about health care vary greatly but pertain primarily to three issues: quality, cost and access. Specifically, consumer concerns vary in subject matter and degree of importance to the consumer, provider and/or plan. Because Americans obtain coverage in a wide variety of public and private health plans which are administered and regulated in different ways,(34) different systems exist for identifying and resolving consumer concerns about their care. For the most part, these systems operate independently of one another.

This section describes the various ways in which consumer concerns about health care manifest themselves and how they are handled by providers, plans, and also formal legal institutions, such as courts and agencies, with specific dispute resolution responsibilities. The Appendix presents a typology of the different types of consumer concerns about health care, and the current methods for their identification and resolution. The Appendix also displays the primary ways that these concerns are identified and resolved.

In analyzing consumer concerns about health care, it must be appreciated that not all concerns are voiced or recognized by responsible parties, and even fewer are presented to legal institutions for adjudication. Many factors

contribute to a consumer's decision to lodge a complaint about his or her health care or, more especially, to initiate legal action.

In The Emergence and Transformation of Disputes: Naming, Blaming, Claiming...,(35) Professors Felstiner, Abel and Sarat review the law and society literature on the generation of disputes that are presented for resolution in legal institutions.(36) First, individuals must perceive that they have been harmed. Second is the transformation of a perceived injurious experience into a grievance which necessarily involves the attribution of blame for the injury to a specific party. The third transformation comes when the individual with the grievance presents the grievance to the responsible party and seeks a remedy. The authors describe how this transformation process of "naming, blaming and claiming" is influenced by many factors, including socioeconomic and psychological characteristics of the affected individual: "Transformations reflect social structural variables, as well as personality traits. People do--or do not--perceive an experience as an injury, blame someone else, claim redress, or get their claims accepted because of their social position as well as their individual characteristics."(37)

The insight that multiple socio-economic and psychological factors determine whether consumers will present claims to legal institutions for resolution is crucial. Particularly disturbing is the fact that people with lower socio-economic status are far less likely to press claims--a finding confirmed by other empirical research.(38) It is this group which is expressly disadvantaged in the health care sector and its systems for identifying and resolving consumer concerns.(39) For example, a particularly disturbing recent study in the New England Journal of Medicine reported that physicians often under-treated poor minorities and women with cardiovascular disease compared to Caucasian men.(40)


A typology of quality concerns should proceed from the work of Dr. Avedis Donabedian, a leading scholar on health care quality who conceptualized the vocabulary used to define health care quality today.(41) The management of an episode of health care can be divided into a technical domain and an interpersonal domain.(42) The technical domain involves "the application of science and technology of medicine, and of other health sciences, to the management of a personal health problem."(43) The interpersonal domain involves "the management of the social and psychological interaction between client and practitioner."(44)

Thus, the two major elements of quality, according to Dr. Donabedian, are "technical competence" and "interpersonal competence."(45) Technical competence goes to the actual performance of medical procedures and services, and relates to the appropriate application of professional knowledge, training and skill. As Dr. Donabedian explains:

   [T]he quality of technical care consists in the application of medical 
   science and technology in a manner that maximizes its benefits to health 
   without correspondingly increasing its risks. The degree of quality is, 
   therefore, the extent to which the care provided is expected to achieve the 
   most favorable balance of risks and benefits.(46) 

Interpersonal competence addresses the relationship between the physician and patient, and includes other aspects of care. As Dr. Donabedian explains, "The management of the interpersonal relationship must meet socially defined values and norms that govern the interaction of individuals in general and in particular situations. These norms are reinforced in part by the ethical dicta of health professions, and by the expectations and aspirations of individual patients."(47)

1. Breaches of Technical Competence

Breaches of technical competence are distinguished by whether medical injury has occurred and, if so, whether the medical injury was the result of medical malpractice. Medical malpractice is the tort of negligence committed by physicians and other health care professionals.(48) However, injury does not necessarily mean that a breach of technical competence has occurred, since many medical procedures involve some degree of risk of injury to patients irrespective of the physician's skill and care. Breaches of technical competence constitute medical malpractice when treatment departs from the legal standard of care of how a practitioner would assess the potential risk of injury to the patient.

Breaches of technical competence, especially if they result in an injury that the patient or family member recognizes, are more likely to surface in existing systems for recognizing consumer concerns. Specifically, patient injuries are generally reported in incident reports as part of provider risk management programs.(49) Further, when more serious incidents are involved, especially when injury is involved, the patient or family may bring a malpractice claim. In a recent study of patient complaints about health care, 30 percent of complaints focused on care and treatment.(50)

Because of the importance of medical malpractice to the medical profession and the sharp increases in the frequency and severity of malpractice claims in the mid-1970s and mid-1980s,(51) there has been considerable empirical research on medical malpractice claims and medical injury.(52) Much research has focused on who sues for malpractice, and why.(53) A 1984 study of the incidence of adverse events and negligence in New York hospitals found that about four percent of hospital patients suffer iatrogenic injury, of which half are due to preventable injury, and one percent due to actionable negligence.(54) Another study by Dr. Leape and colleagues estimates that there are about 1.3 million iatrogenic injuries annually, of which 180,000 result in death.(55)

2. Breaches of Interpersonal Competence

There is a wide variety of diverse situations that fall into the category of breaches of interpersonal competence. Indeed, almost any concern that arises in the context of the treatment relationship which does not involve a breach of technical competence constitutes a breach of interpersonal competence. There are at least three types of breaches of interpersonal competence: (1) communication failures; (2) bioethical concerns; and (3) breaches of personal preferences.

Communication failures occur when the provider and consumer have endeavored unsuccessfully to convey information and feelings to one another. Communication failures generate bad feelings within patients, causing failure to understand and comply with treatment regimens. In this respect, communication failures can contribute to breaches in quality that lead to medical injury to the same extent as breaches in technical competence. Indeed, problems with physician-patient communication are an acknowledged factor in medical injury and the generation of malpractice claims.(56)

It would be virtually impossible to estimate the number of communication failures between health care professionals and consumers that occur each year. However, as described below,(57) an important quality improvement effort is tapping consumer satisfaction with care through systematic surveys. In their recent study, Hickson and colleagues reported that 18 percent of patient complaints about care concerned communication problems with physicians, and seven percent pertained to the provider's "humaneness."(58)

An important type of breach of interpersonal competence involves concerns and disputes that arise in circumstances that fall within the realm of medical ethics, such as end-of-life decision-making.(59) These disputes generally involve differences between patients, and their families, and providers about what to do about the initial provision of care or the continuation of care in ethically charged contexts. In general, these disputes over ethics involve communication failures because the parties involved have not reached a mutually satisfactory decision about how to handle the ethically complex situation.(60) It is noteworthy that The Robert Wood Johnson Foundation's major study of end-of-life care, "The Study to Understand Prognosis and Preferences for Outcomes and Risks of Treatments ("SUPPORT")," found that treating physicians were often uninformed about patient preferences on end-of-life treatment despite having been advised of such preferences.(61)

The third category is other breaches of personal preferences, which include denials of amenities for purposes of this analysis, as well as other breaches of consumer preferences. "Amenities," according to Dr. Donabedian, are "properties of the more intimate aspects of the settings in which care is provided," but can also be "properties of the care itself."(62) This overlap is evident when amenities are described "in the abstract form as comfort, promptness, privacy, courtesy, acceptability, and the like."(63) Breaches of preferences is also a residual category, and include characteristics of health care services that, for whatever reason, are contrary to the tastes or desires of the consumer. They can range from truly trivial concerns about styles of health care delivery, to more serious concerns about dimensions of health care delivery that are contrary to the legitimate expectations of the consumer.

Breaches of interpersonal competence are not identified in a systematic fashion, and may only be made known to providers at a very decentralized level through complaints at the time of the infraction and, possibly, through a provider's risk management and quality assurance surveillance activities, as discussed below.(64) In general, however, breaches of interpersonal competence are not usually presented to legal institutions for resolution unless they precipitate a malpractice claim.(65) However, if they are extremely egregious, they might also surface as a lawsuit for a dignitary tort, such as negligent or intentional infliction of emotional distress.(66) Concerns and disputes over differences in the treatment of ethically charged issues, such as the denial of services or aggressive treatment for terminally or futilely ill patients, also generate claims against health plans for coverage denials and suits for bad faith breach or even medical malpractice, as well as statutory causes of action for denials of emergency services, as discussed below.(67)


Access to care is a crucial concern to consumers. Access issues present themselves in two types of wrongful denials of care: (1) when a payer insurer has improperly denied coverage of a service; and (2) when a provider has improperly denied a service to an individual for any reason, including lack of health coverage or inability to otherwise pay for services.

1. Coverage Denials by Payers

Coverage is a concept which in the context of health insurance pertains to the amount, duration and scope of items or services that are benefits under a health insurance plan. A coverage denial is technically a decision of the insurer or MCO that a particular item or service does not meet the contractual definitions of coverage under the plan contract. In traditional indemnity insurance plans, which pay insureds and/or providers retrospectively for services, coverage disputes are easy to distinguish; they arise only in connection with a claim for payment or request for prior authorization. Additionally, if a decision about a particular medical treatment requires the plan's prior authorization, or otherwise comes to the attention of the plan's utilization review apparatus, coverage denials are explicit.

When care is paid for by prepaid managed care plans, the distinct separation between a payer's coverage decision and a provider's denial of care fades. Coverage decisions are made in the context of care, and are often indistinguishable from clinical judgments about care.(68) The two phenonema surface only when the physician recommends, or the consumer requests, a service that the plan then decides not to provide or pay for. Insidious coverage denials occur when patients are not referred to needed specialty care, or are offered only less expensive treatment options when other treatment options are available. Many managed care reforms have sought to make coverage decision-making by plans more fair by requiring the publication of coverage policies used in utilization review, as well as the grievance and appeal procedures used to contest coverage denials.(69)

Coverage disputes have always been a major source of contention between health plans and consumers.(70) They constitute a major category of consumer concerns raised in internal grievance procedures of managed care plans. Often, they are presented to state insurance regulators in the form of complaints against MCOs and insurance companies. They also constitute the basis for most tort claims for bad faith breach against MCOs and insurance companies.(71)

Scant empirical data exists regarding the nature and prevalence of coverage denials, especially at the plan level. One U.S. General Accounting Office ("GAO") study of selected HMOs found that HMOs varied in their grievance and appeal procedures, and complaint and appeal data are neither comparable nor accessible.(72) In studied HMOs, GAO reported that complaints ranged from 0.5 to 98.2 per 1,000 enrollees, while the number of appeals ranged from 0.07 to 69.4 per 1,000 enrollees.(73) The most common complaints and appeals concerned denials of emergency room care and disputes over benefits and referrals.(74) A 1993 study of the Medicare HMO program by the Health Care Dispute Resolution Center, which handles all Medicare HMO external appeals,(75) reported a rate of "reconsiderations," or external appeals, of 2.2 per 1,000 members in 1991. Nearly 60 percent involved disputes over urgently needed services.(76) There has also been some empirical work analyzing appellate opinions in bad faith breach claims involving insurer coverage denials.(77) Reconsiderations, and especially reported appellate opinions, provide only a limited picture of consumer concerns about coverage denials, given that few coverage denials actually proceed to appealed lawsuits or even reconsiderations.(78)

2. Care Denials by Providers

Wrongful denials of care by providers occur when a provider denies care for an inappropriate reason unrelated to the consumer's need for medical care. Such denials can arise in three contexts: (1) a consumer's inability to pay for services; (2) a provider illegally fails to provide a service through proscribed discrimination on the basis of race, ethnic origin, religion, sex or disability; and (3) the provider who is also the payer denies coverage of a service. This third category is addressed in the discussion of coverage denials.(79)

The first two categories of wrongful denials of care occur when a consumer is denied a service that a provider is obligated by law to provide. Unless required by law, providers have no obligation to provide care without compensation.(80) However, there is a significant body of statutory and common law that imposes obligations on institutional providers in particular to provide free care, especially in emergency situations. These requirements, and associated causes of action and remedies, are described below.(81)

There is considerable evidence that many Americans are denied the health care services they need because they have no insurance and are otherwise unable to pay.(82) Occasional media stories highlight egregious access problems.(83) Litigation of access to care has been extensive over the years.(84) This litigation suggests that denials of care do occur with some frequency and are an important category of consumer concern about health care. Hickson and colleagues, in their study of consumer complaints with a medical practice group, reported that two percent of patient concerns about care involved provider refusals to provide care.(85)

Wrongful denials of care for inability to pay exemplify an important problem with the current methods of identifying and resolving consumer concerns about health care. They are not easily identified unless the denied party presses a claim. Yet it is not easy to press such claims since there are only a few statutory actions for access denials,(86) and most claims must be brought in court under common law tort theories.(87) Unlike members of public and private health plans, the uninsured simply do not have access to most non-judicial legal institutions for the resolution of their disputes.


The cost of health care services is also an important concern for many consumers, despite the fact that most consumers have health insurance to defray the cost of their health care. Concerns about the cost of health care services exist not only among the uninsured and underinsured, but also among the insured. The Health Care Financing Administration ("HCFA") reports that 17.1 percent of all health care expenditures are paid out of pocket by individuals.(88) Another indication of consumer concern is recent evidence that consumers are declining employer-sponsored insurance because of cost, particularly when the cost of the associated co-insurance is high.(89) Notably, the generally low level of cost-sharing in prepaid managed care plans rose in 1996 more sharply than other types of health plans.(90)

Occasional media stories highlight consumer problems with the cost of care.(91) Generally, consumers have raised concerns about costs in disputes over non-covered medical bills. There is little empirical evidence about the extent of consumer concerns about health care costs. Research suggests that medical bills are a particularly serious problem for those with serious illnesses.(92) Indeed, some research suggests that 38 percent of the chronically ill cannot afford needed care.(93) Another study reports that three out of four Americans who have trouble paying medical bills do have health insurance.(94) Further, in a study of consumer complaints with a large medical practice group, Hickson and colleagues found that complaints about billing and payment constituted 35 percent of all consumer complaints--the single largest group of consumer complaints.(95)

Disputes over medical bills do end up in litigation. Some evidence suggests that disputes over health care bills make up a substantial portion of the docket of small claims courts.(96) For example, findings from a study of small claims courts in Ohio showed those seeking payment for medical services to be the second largest category of plaintiffs in that forum.(97) Unfortunately, the research on small claims courts is dated and limited. The Ohio finding has not been replicated in other studies which did not look specifically at claims for medical bills.(98)


Providers and plans do get notice of consumer concerns about health care through a variety of means, and also have different programs for the immediate resolution of concerns. Specifically, quality assurance programs mandated by state and federal law, as well as private accreditation, tap consumer concerns about all aspects of health care. Provider and plan risk management programs endeavor to identify and resolve consumer concerns that might involve medical liability on the part of the provider or plan. Provider ethics committees offer consultation and advice on consumer concerns about bioethical issues. Finally, most providers and plans have consumer relations programs, including ombudsmen in some cases, to clear up identified consumer concerns immediately and informally.


Institutional health care providers are required by state licensure laws to have processes in place to assess and improve the quality of their services. Specifically, health care institutions have quality assurance programs as a condition of state licensure,(99) private accreditation,(100) or conditions of participation in the Medicare and Medicaid programs.(101) Generally, private accreditation will serve as compliance with Medicare conditions of participation for most health facilities.(102) The Medicare program also requires quality review of care provided to program beneficiaries by independent peer review organizations.(103)

HMOs are also required to engage in quality assurance activities under state and federal law. State HMO licensure statutes require HMOs to have quality improvement programs comparable to other institutional providers.(104) For federally qualified HMOs, the Health Maintenance Organization Act of 1973 requires quality assurance programs as well.(105) These mandates do not detail the content of the programs very specifically. The major private accrediting body for HMOs, the National Committee for Quality Assurance ("NCQA"), also requires HMOs to engage in extensive quality assurance and improvement activities.(106)

In the last twenty years, the philosophy and content of quality assurance activities have changed profoundly.(107) Spurred on by health services research on wide variations in medical practice with little impact on the effectiveness of care,(108) health services researchers and third party payers increasingly promoted outcome measures as the appropriate indicators of quality in quality assurance and improvement activities.(109) Health quality scientists have also adopted the principles of total quality management ("TQM") and continuous quality improvement ("CQI"), which revolutionized quality science and management in American industry.(110) Under TQM/CQI theory, the focus of quality is the reduction of error in production processes. Performance is measured in outcomes, including consumer satisfaction.(111) Since the late 1980s, providers and their accrediting bodies have moved toward measuring quality based on outcomes of care and the principles of TQM/CQI theory.(112) Reporting of outcomes of care to potential purchasers of health plan services is an important element in the movement to infuse the delivery of health care with more competition.(113)

From these developments, a consensus has emerged that consumer satisfaction is an important outcome of care and measure of health care quality. Although certainly not a new concept,(114) consumer satisfaction was viewed as an important measure of quality, and crucial information for purchasers when selecting among competing health plans.(115) Providers, health plans, accrediting bodies and regulators now have incorporated consumer satisfaction as an integral part of quality measurement and improvement.(116) With the NCQA's Health Plan Employer Data and Information Set ("HEDIS"),(117) a standardized set of measures to compare the performance of both private and public managed care plans which taps consumer satisfaction,(118) it is now possible to obtain standardized data on consumer satisfaction with health care that is comparable across health plans. As discussed below,(119) the collection of consumer satisfaction data holds great potential for improving methodologies for identifying, preventing and even resolving consumer concerns about health care.(120)


Further, most institutional providers, as well as HMOs that operate health care institutions, have established claims management programs which seek to identify and resolve potential malpractice claims arising from adverse events in treatment, such as breaches of technical competence.(121) These adverse events are generally recorded in incident reports or reports of various provider and plan committees with official quality assurance and risk management responsibilities. The information about these events is used to manage potential future litigation, as well as to improve quality prospectively.

Rarely is the information used to inform a consumer that they have an actionable complaint about a breach of quality, or to accord a remedy to such a consumer. However, where a breach of technical competence is particularly egregious, or if a very serious injury has occurred irrespective of the breach, a provider or plan may inform a malpractice insurance carrier. The malpractice insurance carrier, and/or the insured, may actually contact a consumer and attempt to compensate for associated damages in order to avoid the filing of a malpractice claim.(122) Some institutional providers even have informal grievance procedures as part of their risk management programs.(123) Many complaints and disputes are resolved informally before proceeding to established dispute resolution procedures. Indeed, early identification and resolution of disputes is a cardinal principle of good risk management.(124)

Many liability insurers seek out early settlement to save costs associated with the claim.(125) It should be noted that such efforts are not without risk of harm to the consumer, who may be settling a serious medical injury without adequate legal advice or judicial supervision in conventional malpractice suits that proceed to court. Settlement of disputes, even under judicial supervision, can result in oppressive settlements that are damaging to consumers.(126) Consumers should never be called upon to settle cases without fully understanding the relevant medical facts, and without an opportunity to retain counsel or obtain other expert advice.

Several scholars have explored the relationship between risk management and the endeavor to link quality assurance and risk management activities with the prevention and early resolution of medical malpractice claims and other consumer concerns before they are presented in court.(127) Hickson and colleagues have proposed a patient complaint analysis system for physician multi-specialty groups. The analysis would generate data which would then be used, through peer review, to improve physician behavior toward patients.(128) Dauer and Marcus have proposed a system for mediating medical malpractice claims immediately upon their discovery in a risk management program; the theory of this approach is that most malpractice claimants are motivated primarily by a "search for understanding, communication and correction," rather than compensation.(129) Thus, their claims are amenable to early resolution through immediate mediation.(130) In another empirical study comparing formal and informal dispute resolution in medical malpractice in one hospital, Farber and White found that cases initiated by incident reports in risk management programs were more likely to be dropped than cases initiated by consumer complaints or a lawsuit.(131)


Hospitals and HMOs also have ethics committees to adjudicate disputes over bioethical issues with consumers. These committees serve in an advisory capacity only and have no authority to decide a disputed issue.(132) There has been considerable criticism of the role of these committees in assisting in the resolution of consumer concerns about care.(133) A review of the empirical literature about ethics committees found that ethics committees were often dominated by providers and did not always promote the interests of patients and families, especially when they conflict with institutional interests.(134) Some have suggested mediation and other alternative dispute resolution ("ADR") approaches to adjudicate disputed ethical issues associated with the care of specific patients.(135)


Most providers and plans maintain some kind of customer relations program to resolve identified consumer concerns about their health care.(136) These efforts are predicated on the theory that the best way to resolve disputes of any kind is direct, informal consultation between the parties, and before a decision maker with power to accord relief for the complainant. Customer relations programs, and especially ombudsmen programs, are useful in resolving consumer concerns involving breaches of interpersonal competency that have offended the sensibilities of consumers but have not caused medical injury.

There has been some experience in using ADR techniques to resolve health care disputes of all types that are identified early.(137) Providers and health plans have used mediation to resolve consumer concerns including potential malpractice claims.(138)

Ombudsmen have been used successfully in other contexts to resolve disputes at early stages.(139) Ombudsmen are generally dispute resolution practitioners who confidentially and informally work to resolve conflicts within corporations and government agencies.(140) Many federal agencies have adopted ombudsmen programs.(141) One particularly unique program has been the use of ombudsmen in state agencies on aging for the elderly in nursing homes mandated under the Older Americans Act.(142)

Ombudsmen are just now gaining recognition as a dispute resolution technique for health care disputes with managed care plans.(143) Ombudsmen have also been used in hospitals; one report indicates that nearly 4,000 hospitals have patient ombudsmen offices to handle consumer complaints.(144)


Currently, there are essentially two main ways, outside of the judiciary, in which consumers can raise their concerns about their health care services and obtain some type of legal relief: (1) internal review within health plans and (2) external review by an administrative agency or other entity. These legal processes are only available for specific types of concerns and issues. The avenues for raising and resolving particular types of consumer disputes are presented in the Appendix.

At this point, it is useful to define some of the terms that are customarily used to describe various types of health care dispute resolution methods. When a consumer makes a concern known to a legal institution for adjudication and resolution, the consumer can be said to make a "complaint" or a "grievance." HCFA, which administers the Medicare and Medicaid programs, defines a "complaint" as "any oral or written communication, made by or on behalf of an enrollee expressing dissatisfaction with any aspect of a [plan's] or provider's operations, activities or behavior regardless of whether remedial action is sought."(145) HCFA defines a "grievance" as a "written communication explicitly addressing dissatisfaction with the following: the availability, delivery, or quality; payment, treatment, or reimbursement of claims for service; or issues unresolved through the complaint process."(146)


There have been numerous and disparate efforts on the part of providers and plans to require consumers to use contractual internal review.(147) Often, contractual review is a condition of obtaining treatment from a provider or enrolling in the plan. The major types of disputes included in these contractual arrangements are medical malpractice claims and disputes over coverage. Contractual review has been used especially in the adjudication of medical malpractice claims.(148)

The predominant type of ADR used in health care is arbitration.(149) Arbitration seems to be the predominant ADR method for the resolution of health care disputes in contractual review processes. In arbitration, parties ostensibly agree at some point to retain an individual, or a panel of arbitrators, to render the decision instead of a court.(150) Binding arbitration occurs when the parties agree that the arbitration will conclusively resolve the dispute with limited appeal rights.(151)

Arbitration has been promoted for adjudication of malpractice claims on grounds that it is more efficient and less costly, less trying to the parties, and marshals expertise more efficiently.(152) Others have found them to be unfair to consumers who unknowingly surrender rights to common law tort remedies upon enrolling in health plans or entering a treatment relationship with a provider.(153) Courts have invalidated binding arbitration agreements between providers and consumers on grounds that the agreements were obtained under less than fair circumstances.(154) The contractual review arrangements, even binding arbitration, have faired better in judicial challenges. …

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