CONSUMER INFORMATION

False & Misleading Advertisements
Consumers have certain protections to ensure that they receive accurate information. For example, health plans are prohibited from using false and misleading advertisements. They also have protections against misleading incentives to purchase health insurance policies. False and misleading advertisements and inducements are prohibited as an unfair method of competition. Health plans are required to include information about major coverage limitations prominently in all of their advertisements. Consumers who think they have been harmed by false and misleading advertisements should contact the Consumer Services Division of the NC Department of Insurance for more information about their rights at: 1-800-662-7777 or 1-800-546-5664 (NCGS 58-67-65, 58-63-1 et. seq., 58-2-65, 58-2-70, 11 NCAC 12.0518-0536).

Materials Must Be Understandable
State law requires that all materials given to consumers be understandable at a ninth grade reading level. This means that the member handbooks (Evidence of Coverage or insurance policies) should be understandable to those with a high school reading level (NCGS 58-38-35, 58-38-1 et. seq., 58-66-1 et. seq.). However, the state allows each health plan to assess the readability of its consumer materials. Health plans can exclude medical terminology in their assessment of the readability level. In effect, insurance materials are often difficult for the average person to understand.

Evidence of Coverage
Health plans must provide members with an explanation of the services or benefits covered under the insurance plan. Many plans refer to this document as the Evidence of Coverage (EOC) while other insurance companies refer to similar documents as member handbooks, subscriber contracts or insurance policies. (NCGS 58-67-50(a)(3)(a), 58-65-60).

Health plans have specific requirements for what information must be included in the Evidence of Coverage or insurance policy. These documents must include a description of:

• The health services or other benefits covered under the plan;
  
• Any limitations on the services or benefits covered;
  
• Any required cost sharing;
  
• The total amount of payment for health services that the member must pay;
  
• A description of the health plan’s method to resolve member complaints;
  
• A detailed explanation of appeal and grievance procedures;
  
• Explanation of information that is available to members and prospective members upon request and instructions on how to obtain this information;
  
• Definition of medical necessity;
  
• Coverage that is available for out-of-network services;
  
• Information about the utilization review process; and
  
• A description of the reasons, if any, that a health plan can terminate a member’s enrollment.
  

(NCGS 58-67-50(a)(3)(b), 58-38-30, 58-38-35, 58-65-60, 58-50-62, 58-50-61, 58-3-191(b), 58-3-200(b)(d)). Health plans must give members or prospective members a copy of these documents, upon their request (NCGS 58-3-191(b)).

How Will the Health Plan Treat Certain Health Conditions
Health plans that offer managed care products must provide members and prospective members certain information, upon their request. A current or prospective member has the right to request information about:

• How his or her health condition would be treated under the plan (called the health plans’ review criteria or treatment protocol);
  
• A list of the health plan’s drug formulary, and how to request drugs outside the formulary; and
  
• The procedures the health plan uses in determining whether a specific procedure, test or treatment is considered experimental or investigations.
  

This information is especially important for people with pre-existing health problems or special health needs (NCGS 58-3-191(b)).

Health Plan Comparisons
HMOs and PPOs are required to report certain information to the NC Department of Insurance. Some of this information may be useful to consumers in comparing health plans. These data include:

• Grievances: HMOs and PPOs must report information about member grievances. Grievances may include problems with accessibility or quality of services, claims payments, questions about covered benefits, or other complaints. Health plans must provide information on the number of and reasons for the grievances, and how the grievances were resolved.
  
  
• Participants and groups that withdraw from the health plan: HMOs and PPOs are required to report the number of groups (generally employer-based plans) and individual members that left the health plan. In addition, the health plans must report data on the numbers of providers who left a plan voluntarily and involuntarily. (NCGS 58-3-191(a)(2)(3)).
  
  
• Provider network Adequacy Information: The health plans are required to report information on the number of providers who are in their network by type (primary care, cardiology, chiropractors, dermatology, ENT, neurology, OB/GYN, orthopedics, psychiatrists/mental health/substance abuse professionals, other physicians, hospitals, other facilities, and other providers). In addition, the health plans must report information on their average driving distances. This information is available by plan for Asheville, Charlotte, Fayetteville, Goldsboro, Greenville, Hickory/Morganton, Jacksonville, Rocky Mount, Triad, Triangle, Wilmington and for non-metropolitan areas. (NCGS 58-3-191(a)(4)).
  
  
• Utilization review and Appeal data: HMOs and PPOs are required to report information on the types of the number of different utilization reviews performed and how many of these reviews resulted in a denial of services (non-certifications). In addition, health plans must also provide information on the number of appeals, and the outcome of these appeals. (NCGS 58-3-191(a)(4)(f)).
  
  
• Provider compensation data: HMOs are required to submit information on the percentage of providers paid according to different payment arrangements, including capitation, discounted fee-for-service, or salary. In addition, the HMOs must also report about the range of compensation paid under a withhold or incentive system (NCGS 58-3-191(a)(5).
  
  
• Health Plan Employer Data and Information Set (HEDIS®): HMOs are required to report HEDIS® data to the state. HEDIS® is a standardized set of performance measures that consumers and other purchasers can use to compare health plans. HEDIS® covers seven general areas of performance: effectiveness of care, access to and availability of care, member satisfaction, health plan stability, use of services, cost of care and health plan information. (NCGS 58-67-11(e)). PPOs are not required to collect or report HEDIS® data.
  

All of the information except the HEDIS® data is available in a publication called The Managed Care Plan Handbook: A Comparison Guide for North Carolina Consumers. This document is available in the NC Department of Insurance’s website: NCDOI.com, or can be ordered through the Consumer Services Division at: 1-800-546-5664. The HEDIS® data is available in a separate document entitled HMO Performance Report.

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