Benefits Report FAQs
Initiated by the Institute for Ethics at the American Medical Association in 1997, the Ethical Force Program® is a broad-based effort to develop performance measures for ethics that will be useful throughout the health care system. It was founded on the belief that high ethical standards must permeate the entire health care system because patients who enter the health care system are often vulnerable and unable to protect their own interests effectively. That is, every participant in health care must hold some shared fundamental ethical obligations. Moreover, if specific shared expectations for ethical action can be developed, knowing how well each participant lives up to these shared expectations will be of tremendous value. Thus, the program aims to develop performance measures in specific domain of health care ethics that can be applied to all participants in health care -- from hospitals and physicians to health plans, employer/purchasers, investors, and others.
Although the Institute for Ethics at the AMA convened the Ethical Force Program® and has been the program's primary (but not sole) financial sponsor, the Oversight Body has the authority to direct the program, including selecting topic areas to address and developing and approving consensus reports. Each member of the Oversight Body has been free to share early drafts of the consensus document with their respective employers, as well as other experts and interested parties. This process allowed for broad input into the recommendations. However, final votes on whether to include specific items in the document rested solely with the Oversight Body members. Voting was confidential and the document does not necessarily reflect the official policies of the organizations from which Oversight Body members have been drawn.
Improving fairness in health care coverage decisions is the second ethical topic that the Ethical Force Oversight Body has chosen to address. In selecting this domain, the Oversight Body recognized that the integrity and fairness of processes for making health coverage decisions are important factors in fostering trust in health care organizations. But coverage decisions can be ethically complex. Within the context of designing and administering a benefits package, each stakeholder has unique, and sometimes conflicting, responsibilities that must be weighed against one another. The Ethical Force framework provides a means to help balance these competing demands and ethical obligations.
Resource allocation systems in health care are complex and coverage decisions are made at multiple levels. In particular, questions about the fairness of coverage decisions tend to arise in three basic areas: access to care, benefits package design, and benefits administration. For the purposes of this report, we adopted the following brief definitions.
- Access to health care is the degree to which individuals and populations can and do obtain health care despite financial, cultural, geographic and other barriers.
- Benefits design is the decision-making process that determines what assortment of health care services will be covered under an insurance package.
- Benefits administration is the decision-making process that determines the insurance coverage of specific services for specific individuals within the scope and limitations of the benefits design.
This report addresses only the latter two areas: benefits design and administration. While some barriers to access are mentioned, the broader issue of access to insurance coverage--that is, the problem of the uninsured--poses unique and important ethical and social challenges which deserve separate consideration beyond the scope of this consensus report. Thus, in the context of this report, "coverage decisions" are those made in health care benefits design and administration.
The issue of access to care was highly contentious and the subject of much debate of the Oversight Body and the Expert Advisory Panel. In the end, the decision was made to set aside broad issues of health care access for this report. Although access to health care is very important on moral, social, and practical levels, it also poses challenges that could not adequately be addressed in a consensus report of this type and scope. An appendix that details the thought process on this issue is included with the report, and provides further guidance on the rationale for the Oversight Body's decision to focus upon fairness in coverage decisions "within covered populations."
To determine the five criteria for fairness in designing and administering health benefits, the Ethical Force program® drew upon existing, broadly-accepted community norms for ethical behavior in decision-making contexts. The Program collected and analyzed existing policies and proposals to discover widely articulated and agreed–upon standards on which to build a solid framework for improvement. The final list of five ethical "content areas" emerged from a rigorous process for consensus building, including substantial input from an Expert Advisory Panel, the Ethical Force program's Oversight Body and scholars in the field unaffiliated with the Ethical Force program®.
The report's recommendations are designed for all stakeholders who participate in the process of designing and administrating health care benefits. The Oversight Body envisioned a wide-range of individual and group stakeholders who should follow the consensus report recommendations. This list includes, but is not limited to: providers, practitioners, patients, employers/purchasers, health care insurance organizations, health benefit plan organizations, benefit administrators, benefits consultants, and regulators. Each content area outlines expectations that may apply to specific parties. For instance, to ensure Transparency, practitioners should provide information about all medically appropriate options and inform patients when they are aware that a service is unlikely to be covered by insurance. More specifically, to ensure Transparency, practitioners and provider organizations should provide patients with information on the benefits, harms, and risks of proposed interventions, including valid information (if available) about local success rates when they differ substantially from literature-derived rates or from regional norms. In sum, the recommendations include both general criteria and specific guidance to help create shared decision-making and educate all stakeholders about their ethical obligations.
The proposed value of the consensus report stems from an increased recognition of ethics and its role in building an organizational culture of integrity, trust, openness and high-quality care. The recommendations listed in the consensus report are a first step to articulating demonstrable, measurable expectations on the most important ethical matters. The steps suggested in the report are designed to enhance stakeholders' sense of legitimacy in the processes used to design and administer health benefits. As a result, there will be a greater understanding of the process and improved quality health care, as well as a means to facilitate change and improvements.
The Ethical Force Program® believes that close attention to ethical norms in health care has intrinsic value for organizations and individuals independent of potential financial or other benefits that may accrue. Nonetheless, meaningful short- and long-term organizational benefits provide concrete incentives for applying the report's recommendations. For example, physicians and patients will applaud the patient protections recommended in the report and health care organizations may be financially rewarded through increased capital investment on the part of investors who will now be able to monitor the ethical behavior of organizations. Health plans, often faced with emotionally-charged coverage decisions, will immediately recognize the business value of being able to demonstrate careful attention to organizational attitudes and policies that reflect fairness and ethical consistency in coverage decision-making. For health plan purchasers, including employers, the Report's recommendations provide a proactive method for evaluating coverage decision-making processes that may avoid the need for later appeals and benefits package changes.
The Ethical Force Program® hopes that the Report will be used as a framework for organizational planning and action. The Program has strived to make its recommendations realistic, especially in light of the many demands upon the resources of health care organizations. Content Area One: “Transparency,” illustrates this strategy. Despite the importance of transparency, it is inherently limited because it is not possible to convey all information to all people. Therefore, the report describes priority-setting strategies for achieving transparency within the constraints of limited resources. The report notes, for example, that it is more important for enrollees in a health plan to be informed of how new services are evaluated for coverage than it is for every enrollee to be actively informed of each change in the coverage plan.
This report encompasses the variety of ways that health insurance benefits are distributed – including payment, co-payments, appeals, and other adjudication processes to determine final payment for services. Frequently, beneficiaries or providers who are denied coverage for a service must follow their specific plan's policies and procedures to appeal that adverse decision. Depending on the circumstances, some will be able to pursue administrative or other legal review of the coverage denial.
No single federal statutory authority determines how health care benefits should be designed, administered, or adjudicated. Many disputes regarding health benefits or health insurance plans are preempted by a federal statute, called the Employee Retirement Income Security Act (ERISA), which generally states that federal courts will defer to ERISA plan administrators' decisions in adjudicating coverage decisions. It thus becomes very important that ERISA plan administrators (benefits administrators) be well informed of the variety of ethical obligations that should guide the decisions.
If a health benefit coverage issue is not preempted by ERISA, then the prevailing state law generally applies. States have special laws that regulate insurance and managed care or health benefits administration. Here again, it is important for all stakeholders involved to not only follow the prescribed statutory elements, but also to pay attention to relevant ethical factors and guidelines in reaching a decision.
Both of these situations highlight the importance of having an ethical framework that these plan administrators and decision-makers can utilize when making difficult adjudication or administration decisions, be it in the federal ERISA context or at the state law/interpretation context.
Rationing is an emotionally and politically charged term, especially when used in reference to the distribution of health care resources. The Ethical Force program® does not recommend nor reject particular resource distribution methods in its consensus report. Rather, the Report lays out an ethical framework for assessing the processes that health care organizations use to distribute health care resources through the design and administration of health benefits. Ideally, a health care organization that considered instituting a decision-making process such as rationing could follow the Report's recommendations in order to ensure that its processes were transparent, participatory, equitable and consistent, sensitive to value, and compassionate.
Some patient groups—such as the physically or mentally disabled, limited or non-English speaking, geographically or culturally isolated, chemically-addicted or dependent, seriously or chronically ill, homeless, frail or elderly, and children—confront substantial barriers to the safe and appropriate use of health care services. These groups are generally considered to be “vulnerable populations” because it may be difficult and sometimes impossible for them to act to protect their own health care interests.
Recommendations throughout this report reflect the need to be mindful of vulnerable populations when designing and administering health care benefits. For example, under “Transparency,” the authors recommend providing advocates for vulnerable populations with the information necessary to make an effective case on their behalf, while recommendations under “Participatory” emphasize the importance of collecting feedback specifically from vulnerable populations. The recommendations under “Compassion” are especially pertinent because they call on organizations to focus attention specifically on the needs of vulnerable populations.
The Oversight Body is aware that the health care of vulnerable populations can be expensive and is sometimes poorly reimbursed. Yet for the health care system to have ethical integrity, protection of vulnerable populations must receive specific attention as an issue of highest priority.
Under Content Area 4, “Sensitivity to Value,” the authors conclude that in general health benefits should be designed and administered to provide the greatest benefit to the most patients at the lowest cost, or, in other words, to provide the greatest value. Cost-effectiveness analysis is a common mechanism used by policy makers to compare the overall “value” offered by alternative services. The Report addresses cost-effectiveness analysis' strengths and weaknesses and its varying applicability to different types of coverage decisions. Ultimately, the Report recommends both specific approaches to and limiting conditions upon the use of cost-effectiveness analysis to frame health care coverage decisions.
The proposals in the report represent a consensus among experts throughout the health care delivery system, and therefore intentionally reflect some existing standards for benefits decision-making. We are pleased to note that many organizations and individuals involved with health benefits design and administration already take account of the ethical criteria and recommended actions we present. Nonetheless, there is significant room for improvement, and organizations can use our recommendations to address gaps in the ethical conduct of benefits decision-making. For example, current research suggests that more than half of patients denied coverage for a health care service do not know why coverage was denied. We recommend that coverage decisions be explained in writing and that denials of coverage always be accompanied by an understandable statement as to the rationales used in the decision. There is still a need for improved beneficiary/enrollee participation in the design of health benefits packages, and our recommendations can help organizations achieve meaningful stakeholder participation. While many health care organizations demonstrate attention to the ethical framework we describe in the report, current weaknesses in benefits decision-making processes have demonstrated a need for the ethical guidance and concrete recommendations we provide in this report.