Patient and physician discontent with the restrictions placed on access to care has led to significant managed care backlash in recent years. However, managed care continues to be an evolving and changing force in the medical marketplace. Many managed care plans continue to implement business practices that limit care, deny services and increase administrative hassles. Al the same time, health insurance premiums continue to steadily increase, along with hefty health plan profits. Physicians have been adversely affected by antitrust laws that favor health insurers and deny a level playing field to physicians who wish to jointly negotiate with managed care organizations.
The AMA has called for a number of managed care reforms to restore balance and fairness to the system, including federal antitrust relief for physicians, allowing physicians to practice quality patient care and increasing patient choice.
What Is Managed Care?
The American Medical Association (AMA) defines "managed care" as processes or techniques used by any entity that delivers, administers and/or assumes risk for health services in order to control or influence the quality, accessibility, utilization, costs and prices, or outcomes of such services provided to a defined population. Managed care techniques currently include any or all of the following:
- Prior, concurrent, and retrospective review of the quality, medical necessity, and/or appropriateness of services or site of services;
- Controlled access to and/or coordination of services through case management, disease management and demand management, which all require increased access to patient medical records and therefore raise confidentiality and privacy concerns;
- Efforts to identify treatment alternatives and to modify benefits for patients with high cost conditions;
- Provision of services through a network of contracting clinicians and facilities, selected and deselected on the basis of standards related to cost-effectiveness, quality, geographic location, specialty, and/or other criteria;
- Enrollee financial incentives and disincentives to use particular clinicians or specific facilities; and
- Acceptance by participating clinicians and facilities of financial risk, or discounted fees, for some or all of contractually obligated services.
This definition of managed care is essentially a snapshot of still evolving trends in health care and it may well need revision in the future. However, the AMA believes that it succinctly and objectively captures the current distinguishing characteristics of managed care. The use of managed care among employers, third party payers, and state and federal programs has steadily risen during recent decades. As a result, managed care has strongly influenced the practice of medicine and has exerted immense pressure on physicians and patients.
Disclosure Rights of Patients and Physicians
- All managed care plans should be required to clearly and understandably communicate to enrollees and prospective enrollees, in a standard disclosure format, those services which they will and will not cover and the extent of that coverage. The information disclosed should include the proportion of plan income devoted to utilization management, marketing, and other administrative costs, and the existence of any review requirements, financial arrangements, or other restrictions that may limit services, referral, or treatment options.
- Physicians must inform their patients of medically appropriate treatment options regardless of their cost or the extent of their coverage.
- Physicians must disclose any financial inducements or contractual agreements that may tend to limit the diagnostic and therapeutic alternatives that are offered to patients, or that may tend to restrict referral or treatment options. Physicians may satisfy their disclosure obligations by assuring that the managed care plan makes adequate disclosure to patients enrolled in the plan.
- Managed care plans or networks that use criteria to determine the number, geographic distribution, and specialties of physicians needed should report to the public, on a regular basis, the impact that the use of such criteria has on the quality, access, cost, and choice of health care services provided to their patients.
- It is the responsibility of the patient and his or her managed care plan to inform the treating physician of any coverage restrictions imposed by the plan.
With the present specialization of medical services, it is advantageous to have one individual with overall responsibility for coordinating the medical care of the patient; the physician is best suited by professional preparation to assume this leadership role.
- The primary goal of high-cost case management or benefits management programs should be to help arrange for the services most appropriate to the patient's needs; cost containment is a legitimate but secondary objective. In developing an alternative treatment plan, the benefits manager should work closely with the patient, attending physician, and other relevant health professionals involved in the patient's care.
- Appropriate payment for physician time and efforts in providing case management and supervisory services is warranted for services that include, but are not limited to, coordination of care, telephone consultations, and office staff time spent to complying with third party payer protocols.
- Any managed care plan which makes available a benefits management program for individual patients should not make payment for services contingent upon a patient's participation in the program or upon adherence to treatment recommendations.
- Where case management or coordination might limit access to appropriate medical care, patients should have the freedom to see a physician appropriate for the services they need, regardless of specialty. Above all, the best interests of the patient must be paramount.
- Managed care plans using the preferred provider concept should not use coverage arrangements which impair the continuity of a patient's care across different treatment settings.
- Managed care plans should provide enrollees, on an ongoing basis, with the right to select a new primary physician from the panel of physicians, and to appeal to the plan when the patient is dissatisfied with his or her present primary physician.
- Health plans that restrict a patient's choice of physicians or hospitals should offer, at the time of enrollment and at least for a continuous one-month period annually thereafter, an optional and affordable "point-of-service" type feature so that patients who choose such plans may elect to self refer to physicians outside of the plan at additional cost to themselves.
- Any point-of-service options under health system reform should have out-of-plan cost-sharing levels that are nonpunitive, actuarially determined, and affordable.
- Certain professional decisions critical to high quality patient care should always be the ultimate responsibility of the physician practicing in a health plan, whether in primary care or another specialty, either unilaterally or with consultation from the plan, including but not limited to the following:
- What diagnostic tests are appropriate;
- When and to whom in-plan physician referral is indicated;
- When and to whom out-of-plan physician referral is indicated;
- When and with whom consultation is indicated;
- When non-emergency hospitalization is indicated;
- When hospitalization from the emergency department is indicated;
- Choice of in-plan service sites for specific services (office, outpatient department, home care, etc.);
- Hospital length of stay;
- Frequency/length of office/outpatient visits or care;
- Use of out-of formulary medications;
- When and what surgery is indicated;
- When termination of extraordinary/heroic care is indicated;
- Recommendations to patients for other treatment options, including non-covered care;
- Scheduling on-call coverage;
- Terminating a patient-physician relationship;
- Whether to work with, and what responsibilities should be delegated to, a mid-level practitioner; and
- Determination of the most appropriate treatment methodology.
- All managed care plans and medical delivery systems must include significant physician involvement in their health care delivery policies similar to those of self-governing medical staffs in hospitals that should extend to all sites of care. The principles of self-governance for managed care medical staffs should include, but not be limited to:
- The development of medical staff bylaws which cannot be unilaterally changed by the governing board of the managed care entity;
- Due process protections for physicians credentialed by the managed care entity;
- Representation of practicing physicians in the credentialing and recredentialing process and decisions;
- Full indemnification by the managed care entity of physicians who, in good faith, serve as members of credentialing, quality assurance, and utilization review committees of the entity;
- Practicing physician involvement in: a) the selection and removal of their leaders who are involved in governance, b) the development of credentialing criteria, utilization management criteria, clinical practice guidelines, medical review criteria, and continuous quality improvement, and their leaders must be involved in the approval of these processes; and c) the development of criteria used by the health plan in determining medical necessity and coverage decisions;
- Peer accountability for professional decisions based on accepted standards of care and evidence-based medicine;
- Involvement of all specialties participating in clinical processes toward the development of clinical practice guidelines, disease management protocols, data collection systems, and interpretation of the data so produced;
- Appropriate, periodic, and comparative utilization data for all practicing physicians; and
- The availability of skilled resource people and information management systems to practicing physicians involved in continuous quality improvement activities so that they have access to information on clinical performance, patient satisfaction, and health status.
- Physicians participating in managed care plans must be able to comment on and present their positions regarding the managed care plan policies and procedures without threat of punitive action.
- Physician representatives and leaders must communicate key policies and procedures to the practicing physicians who participate in the health plan and participating physicians must have an identified process to access their physician representatives.
Utilization Management and Medical Necessity
Medical necessity is defined as health care services or products that a prudent physician would provide to a patient for the purpose of preventing, diagnosing or treating an illness, injury, disease or its symptoms in a manner that is: (1) in accordance with generally accepted standards of medical practice; (2) clinically appropriate in terms of type, frequency, extent, site, and duration; and (3) not primarily for the convenience of the patient, physician, or other health care provider.
- Determinations of medical necessity shall be based only on information that is available at the time that health care products or services are provided.
- The medical protocols and review criteria used by managed care plans in any utilization review or management program must be developed by physicians.
- Managed care plans should be required to disclose to physicians on request the screening and review criteria, weighting elements, and computer algorithms used in the review process, as well as how they were developed.
- Any managed care plan utilizing a prior authorization program should act within two business days on any patient or physician request for prior authorization and respond within one business day to other questions regarding medical necessity of services.
- A physician of the same specialty must be involved in any decision by a utilization review or management program to deny or reduce coverage for services based on questions of medical necessity.
- Any physician who makes judgments or recommendations regarding the necessity, appropriateness, or site of services should be licensed to practice medicine and actively practicing in the same jurisdiction as the practitioner who is proposing or providing the reviewed service, and should be professionally and individually accountable for his or her decisions.
- It is the responsibility of the managed care plan to credential or certify that its reviewers are appropriately licensed and have the required experience to perform review.
- A physician whose services are being reviewed for medical necessity should be provided the identity and credentials of the reviewing physician on request.
- Any managed care plan that compiles information on physician performance should share that information with the practitioners involved prior to public release.
- Any health plan using managed care techniques should be subject to legal action for any harm incurred by the patient resulting from application of such techniques. Health plans should also be subject to legal action for any harm to enrollees resulting from failure to disclose prior to enrollment any coverage provisions, review requirements, financial arrangements, or other restrictions that may limit services, referral, or treatment options, or negatively affect the physician's fiduciary responsibility to his or her patient.
- Federal law should be enacted to prohibit the exemption from liability of managed care organizations for damages resulting from their policies, procedures, or administrative actions taken in relation to patient care.
Independent and External Review
- " Every organization that reviews or contracts for review of the medical necessity of services should establish a procedure whereby a physician claimant has an opportunity to appeal a claim denied for lack of medical necessity to a medical consultant or peer review group which is independent of the organization conducting or contracting for the initial review.
- " All managed care organizations should contain an external review procedure with the following basic components:
- It should apply to all health carriers.
- Grievances involving adverse determinations may be submitted by the policyholder, their representative, or their attending physician.
- Issues eligible for external grievance review should include, at a minimum, denials for a) medical necessity determinations; and b) determinations by carrier that such care was not covered because it was experimental or investigational.
- Internal grievance procedures should generally be exhausted before requesting external review.
- An expedited review mechanism should be created for urgent medical conditions.
- Independent reviewers practicing in the same state should be used whenever possible.
- Patient cost sharing requirements should not preclude the ability of a policyholder to access such external review.
- The overall results of external review should be available for public scrutiny with procedures established to safeguard the confidentiality of individual medical information.
- External grievance reviewers shall obtain input from physicians involved in the area of practice being reviewed. If the review involves specialty or sub-specialty issues, the input shall, whenever possible, be obtained from specialists or sub-specialists in that area of medicine.
Information provided courtesy of the American Medical Association
- The primary goals of disease management should be as follows:
- To improve outcomes by the provision of timely and appropriate preventive, therapeutic and restorative services. Cost savings and care efficiencies resulting from such services are a secondary but legitimate objective.
- To promote cooperation between primary care and specialty care physicians to provide a continuum of care for specific health care needs.
- Disease management should continue to place major emphasis on educating and empowering patients to more successfully manage their own health and intelligently use care resources.
- Managed care organizations that provide disease management should involve the patient's current primary or principal care physician in the disease management process as much as possible, and minimize arrangements that may impair the continuity of a patient's care across different settings.
- The clinical practice guidelines utilized in disease management should be developed by physicians knowledgeable in dealing with the conditions addressed, and should be updated regularly.
- The decision to participate or not participate in a disease management program should always be the prerogative of the patient, who should be fully informed of any plan coverage conditions attendant on such decisions.
- Physicians should be able to deviate from disease management practice guidelines without incurring sanctions or jeopardizing coverage for services, when in their judgment such deviation is indicated by the medical needs or desires of individual patients.
- Attention to the performance of physicians in disease management programs should be triggered by concern with a physician's overall practice patterns rather than by deviation from practice guidelines in a single case. Emphasis in remedial activities should be on helping the practitioner to correct any overall performance problems identified by peer review, rather than on sanctions.
- Non-physicians who function as care coordinators in disease management programs should be certified or licensed as physician assistants or nurse practitioners, or have at least a comparable level of training.
- The overall authority for decisions to use or not use specialized care and ancillary or supportive services or products for patients enrolled in a disease management program should rest with the primary or principal care physician providing care in the program.
- The primary or principal care physician in a disease management program should strive to assure effective collaboration among the different programs and personnel needed for care of patients with comorbidities, and should be routinely informed by such personnel of the services they provide.
- Physicians who provide care in disease management programs should be fully licensed to practice medicine in the jurisdiction of the program's location, and should be professionally and legally accountable for any adverse patient events resulting from that care.
- In disease management programs conducted by drug manufacturers, the choice of pharmaceuticals used in program formularies and for care of individual patients should not be restricted to those of the sponsoring manufacturer, but should be based on the clinical judgment of participating physicians and validated outcome studies.