Legal implications of adverse utilization review determinations by health insurance companies - Essay Example

FINAL ORDER 217345 Legal Implications of adverse Utilization Review Determinations by Health Insurance Companies Introduction Adverse utilization review determination is an important consideration in health related issues for the people of the United States of America. Health insurance companies of America deal this issue and help people obtaining their health insurance benefits. It is necessary to add that adverse determination of medical necessity is experimental or investigational in nature. The necessity of health insurance companies as well as the adverse utilization review by them is getting momentum position in the recent days. "The Department of Insurance (Department) is required to establish and maintain a process for annual certification of independent review organizations and to maintain a list of certified independent review organizations to be used by HMOs (McCarty, 1999)i" It is commendable that the insurance has already 1remarkably approached corresponding to the independent review organizations. "The insurance department has certified a number of Independent Review Organizations to conduct the reviews. Again, the department has also filed a proposed interim rule regarding external review which was supposed to be effective immediately (Rogers, 2000)ii". Legislative Approach States have undertaken efforts to frame legislative instruments and give them into effect with a view to affording people the benefits of health insurance. The state of Indiana has established and long been maintaining an external grievance procedure for resolving the resolution of grievances regarding adverse utilization review determinations. In 2000, the New Hampshire legislature passed a legislation empowering the establishment of an independent external consumer appeal process to review adverse utilization review determinations which are supposed to be made by managed care insurers. The applicability of the said legislation is extended to all managed care insurers doing businesses in the state that provide or perform utilization review. Definitions For the sake of the proper understanding over the topic, the terms like utilization review, adverse utilization review, clinical peer reviewer, retrospective adverse utilization review etc. are needed to be clarified. It will also help in drawing a better assessment on this intended paper. Final adverse determination indicates the meaning that an adverse determination has been upheld by a utilization review agent in regard to the issue of a health care service following a standard appeal, or corresponds to a matter where section 4904 of the insurance law is applicable. More categorically speaking, Adverse determination means a sort of determination by health carrier or its designee utilization review entity which meant a requested admission, availability of care, continuous stay or other health care service, as well as supply of drugs which is covered under the terms of the covered person's health benefit plan. Utilization review includes a set of formal techniques designed to monitor the use of or evaluate the clinical necessity, its effectiveness, health care services, health care procedures etc. Material affiliation means where there is a substantial relationship between physician-patient relationships, partnership relationship or employment relationship. Clinical peer reviewer includes the persons who have deserving competences to conduct their activities in medical profession or equal to those of carriers of health care services. Retrospective adverse utilization means the consideration of the claim of health service when the medical treatment has already been taken and whether the treatment should be on continuous stay. Medical Necessity Undeniably, as the companies as well as the HMOs pay claims based upon the concept of The insurance companies consider the claims if people attempt to get pre-certification where a proposed health treatment is to be taken by the patients or insurer of health insurance or after the health treatment has already been taken. In such cases, the companies duly regard the claims and review them whether the medical services is really needed for them. In case of the fact, the companies are not well convinced as to the necessity of the so demanded medical service, would have the jurisdiction to deny the claims. Thus, it is necessary to provide a clear understanding what does the medical necessity actually mean. Again, it is also necessary to describe the process of appeal against the adverse decisions. The definition of medically necessary has been defined in the insurance policy as : "Medically necessary means that a service, supply or medicine is necessary and appropriate and meets the standards of good medical practice in the medical community for the diagnosis or treatment of a covered illness or injury as determined by the insurance companies(Illinois Insurance Facts, 2007)iii".A primary care physician or a member of an HMO is responsible for deciding whether the said person should be given the treatments that are supposed to be treated as medically necessary. Of course, following things are excluded from the consideration of medically necessary: 1.Inpatient hospitalization for treatment which can safely and adequately be provided on an outpatient basis. 2. Continued inpatient hospital care when the medical condition of the patient is not so required for a continuous stay in the hospital.3. Cosmetic Surgery. 4. Treatment provided for the convenience of the patient. 5. An advanced for the procedure or treatment provided without just trying less invasive, less expansive treatments. It is true that the insurance companies or HMOs just after obtaining the prescription from a doctor by a patient, would not consider it as medically necessary; rather they would closely review the prescriptions. If a given policy requires preauthorization of the service, it is necessary to undertake proper means in that regard. Because, this can facilitate in being informed whether coverage of the medical services is available. Failure to pre-authorization of the service may cause penalty or denial in availing the health services. Appeal against the Denial When an insured or HMO denies a claim or preauthorization request, an individual or insurer is entitled to appeal against such decision. Principally, there are two ways in addressing the issues of appeals against such denial. The procedure of appeal in case of HMO is set out in the Managed Care Reform and Patient Rights Act. Of course, there is another mode of appeal known as external appeal. Due to the consideration of the material affiliation, person(s) engaged in the utilization review cannot deal the same issues in the appellate stage. The contravention of this is the disqualifying ingredient and sufficient to vitiate the whole proceeding. Of course, the material affiliation of any health maintenance organization with the clinical peer reviewer does not constitute a disqualifying component with respect to an appeal. This is also the same in case of the fact that a material affiliation exists with a hospital or other licensed medical service provider. Appeal with HMO In pursuance of the relevant provision, it is required that the appellant or the physician of the appellant is to file an oral or written appeal with the HMO. The provision also suggest that after having the appeals from the appellant, the HMO is to provide its decision within the period of next 24 hours of the submission of the appeal, when the treatment is so urgent. All others should be disposed within15 business days of the receipt of all the necessary information. In case of an appeal is denied, the appellant is to seek an external independent review. In this connection, the appellant, physician of the appellant as well as the HMO are to jointly select the reviewer. The decision of the independent reviewer is final. Appeal with Insurance Companies The insurance companies also deal with the issue of adverse realization .In pursuance of the legislative provisions, the insurance companies are not empowered to review medical records and accordingly make claim determination. The insurance division is to ensure that the insurance companies are doing their functions in compliance with the utilization procedure as required by spirit of laws. The stipulations of law in this connection are expected to be on the following considerations. 1. The review procedure should be accomplished following a registered utilization review entity 2. It should be conducted within the required timeline. 3. Initial clinical review can be denied in case of the fact that a said person has been already reviewed by a health care professional who holds a current license as the ordering provider as a doctor of medicine or osteopathic medicine. 4. Initial denial notice should be placed in writing and it should consist of the key reasons of such denial. In addition, clinical rationale and instructions may also be provided for appeal upon the condition that the request has been made for so done. 5. Close consultation should be made for the finality of the decision between the reviewer and the medical provider of an insured patient when the issue of medically necessity is determined. 6. An appeal to the initial review should be conducted within the scheduled time-frame. 7. In conducting an appeal, the reviewer must do it with the assistance of a clinical peer who is well reputed in the medical profession and has an expertise in the determination of the medical condition, 8. Appeal reviewer should not be the same person who made the original denial or subordinate to that person. External Appeal Apart from the patient or insurer, the health care provider of a patient has also the right to make an external appeal. The language as set forth in subdivision d-5 of section 4900 of the Insurance law of New York suggest that an insured's health care provider shall also have the right to request an external appeal of a final adverse determination which is made by a health care plan on the grounds that the health care service is not medically necessary or is experimental or investigational. This is also applicable to the health care plans. The appeals that are supposed to be eligible for external appeal need to be assigned by the superintendent to a certified external appeal agent according to a process prescribed by the superintendent and the commissioner. Such process must take into account conflicts of interest in accordance with the provisions of section 4913 of the Insurance law and Public Health Law. Just after receiving the assignment from the superintendent of a request for external appeal, certified external appeal agent is to send notification of such assignment to the insured or to the person on whose behalf an external appeal is requested, the attending physician, the health care provider of the insured within next 24 hours. In such notification, the appeal agent may ask for any document or of any evidence that may be required for the final disposal of the given matter. Accordingly, the appeal agent would give the final decision in the given matter. It is necessary to mention that all the external appeal case records shall be open to the process of audit and examination for a period of six years from the date of the certified external appeal agent's final determination on the appeal. The health care department would be responsible for maintaining the relevant records and documents. It should be noted that all clinical peer reviewers are expected to qualify the criteria for conducting the external review pursuant to section 4900(b) of the Insurance law and Section 4900(2) of the Public Health Law. This denotes that they should be much capable in matters associated with the clinical protocols, decision abstracts and practice guidelines that are deemed necessary for the health carrier professionals to determine the suitability and effectiveness of health care services. HMO: An Issue of Thought Regrettably, HMO has lost confidence in the mind of the people. Though it is supposed to keep contribution to benefit the interests of people, HMO has bad reputation in regard to the following issues: due to lack of authorization, HMO causes miscarriage to the people as it allows admissions but subsequently rejects it. Other allegation involved with the HMOs include late receipt of notification of denials, giving retrospective review and subsequent denial of them, denial of notification and of the appeal rights to the patient or physician. In addition, review reconsiderations timeframe is not complied with, appeals and allowable timeframes illegally declared to have been exhausted due to attending physician reconsideration or expedited appeal request, notices of medical coverage are not issued as required, and a written appeal decision is not rendered within the required timeframe and subsequent reluctance to reverse the original denial and paying due regard to the claims as required by law. As a result, all the concerned suffer a lot in obtaining the insurance benefits. Concluding Remarks The denial of medical services or adverse determination is a grave concern among people of all the quarters. As the issue is closely related with the health insurance benefits and ultimately the concern of human existence, it warrants special attention for the betterment of the people. The mismanagement in the adverse determination, particularly by the HMO is rigorously jeopardizing the interests of the mass people. It is the high time to make a working change in the administration and particular emphasis should be given on the legal aspect. For this following may be considered as the guiding tool in the change management. It may be recommended that following the guidelines an effective change would be ensured in the health insurance companies as well. The impediments that are causing due to the mismanagement of the HMO are of utmost importance as it is against the concept of public policy and good governance. People of the country should be provided equal and fair treatment. Henceforth, the issues associated with HMO should be properly addressed. In so doing, we should adhere to the policy or the betterment of the mass people of the country. Due to this management people are getting injured due to the denial of the health services. Because of the current legislative loopholes people are to suffer much hardship. The legislative provisions should be reviewed again and accordingly effort should be made so that a more efficient and working mechanism can bring an aspiring change in this regard. For facilitating the policy makers citizen group should be formed. As a result, people would discuss the issues in detail as a consequence of which they would be able to determine the medical necessities for them and accordingly recommend for the required policy formulation by the policy makers. This would also bring a change in the medical industry as well as develop the relation between the industry and the patients as well. REFERENCES Illinois Insurance Facts. (2007, May). Medical Necessity. P. 1. Retrieved April 5, 2008, from http://www.idfpr.com/doi/HealthInsurance/MedicalNecessity.pdf McCarty, Sally. (1999, October 07). CERTIFICATION OF INDEPENDENT REVIEW ORGANIZATIONS. p. 1. Retrieved April 06, 2008 from www.ai.org/idoi/bulletins/Bulletin99.IRO.FINAL.html - 22k Rogers. T. Paula. (2000, Sept. 1). State of New Hampshire Insurance Department. BULLETIN Docket No.: INS NO. 00-017-AB. P. 1. Retrieved April 07, 2008 from http://www.nh.gov/insurance/media/bulletins/2000/documents/ins00017.pdf Read More