Defeating Denial Double-Talk

That catch in your managed-care provider agreement and what you can do about it.

By Gil Weber, MBA

The list of frustrations for physicians and staff when dealing with managed care plans seems endless. The hoops everyone must jump through before, during and after a patient visit add immensely to the cost of providing care and, significantly, to the stress of running a medical practice (to say nothing of the added stress on patients).

And when it comes to providing quality care for their members, a number of third-party payers seem to talk out of both sides of their mouths, thereby complicating the provision of that care and, sometimes, slowing or even denying payment. Many physicians feel frustrated and helpless when they encounter this situation with third-party payers, but there are alternatives that will help you get approval — and reimbursement — for the care you believe your patients need.

The Words to Watch For

One classic example of double-speak is a section in many managed-care contracts that allows the payer to have it both ways, care-wise, to the detriment of the patient and the practice. The section is typically written along these lines:

Relationship of the Parties: For purposes of this Agreement <name of plan> and Physician are and will act at all times as independent contractors. Physician shall be solely responsible to Members for providing Health Services and the quality of those services. Nothing in this Agreement is intended to create any right of <name of plan> to intervene in any manner with the provision of Health Services to Members. Physician has a duty to exercise independent medical judgment irrespective of whether <name of plan> determines a Health Service is a Covered Service, and irrespective of the Utilization Management and Quality Assurance Programs.

The plan is saying that it won't interfere with the patient/physician relationship and it won't intervene in the physician's provision of care. But it's also made clear that no matter what the plan may decide, in the end the physician is still responsible for the proper care of the patient.

Now, if the plan keeps its word regarding the first two provisions, the third is not a problem. But as many physicians have discovered, that is often not the case.

"Experimental/Investigational" Denials

Many of you have experienced firsthand the frustration of a denied authorization for recommended care. Or worse, you have already provided the care only to then have the claim denied with the service designated as "experimental" or "investigational." In August 2008 Internet list-servs for practice administrators lit up on the report that Blue Cross of California was suddenly denying claims for bevacizumab (Avastin) injection to treat wet AMD. Though Blue Cross had been paying for Avastin, suddenly it was being deemed "investigational" and therefore not covered.

On receiving such denials you've probably felt that the payer's position was incorrect and that it had denied reimbursement based on a flawed coverage determination. It is all the more perplexing when the service has been accepted and reimbursed by Medicare, the industry's "gold standard" on what is and is not considered medically necessary, experimental or investigational, and the service has also been reimbursed by other private payers.

When inquiring about the denial, you likely discovered (if you got an answer at all) that the plan may have based its denial, at least in part, on an old position paper on practice guidelines. That paper may even have pre-dated acceptance of the service and assignment of a CPT code by the AMA. Since the position paper may have pre-dated the technology or its subsequent acceptance as a standard of care for certain conditions, the payer exploited this to deny reimbursement.

So now you find yourself down the rabbit hole in Alice's Wonderland — in an absurd situation where your provider agreement says the payer will not interfere with your professional judgment, and that you are responsible to the patient for providing quality care, yet the payer also denies the very care you recommend by deciding that you should, instead, be providing some other type of care. What's wrong with this picture?

In addition to a plan's (non)reimbursement policy effectively making hostages of physicians and their medical decisionmaking, many physicians feel that such denials are potentially harmful to patients. The standard appeals process spelled out in the payer's documentation is typically little more than a rubber-stamped denial since the review is handled internally — the decision is made by the payer's medical director who, as its employee, brings a bias to the process.

Getting an Unbiased External Review

If you're going to challenge a payer over its determination of what is and is not a payable service, you have to know how to use the tools at your disposal. Nearly all states require that payers offer an external appeals review process. But in most of those states that process is available only to the patient; it's not a remedy available to physicians.

That's problematic, especially if the patient is unable or unwilling to pursue his rights (e.g., the patient may be too ill or too busy to fight the battle). But getting the matter resolved is crucial because, ultimately, the result will determine if payment is forthcoming and, if it is, from whom.

Some states do make the process more physician-friendly. For example, Indiana gives physicians there the means to a fair and unbiased external review of a payer's adverse internal review decision. The process is called the External Grievances Review and it is part of Indiana Code IC 27-8-29 (for more information on the process, go to http://law.justia.com/indiana/codes/title27/ar8/ch29.html).

The Indiana External Grievances Review allows a covered individual or a covered individual's representative (e.g., an ophthalmology practice) to file a written request with an insurer for an external grievance review of the insurer's adverse determination of appropriateness, an adverse determination of medical necessity, or a determination that a proposed service is experimental or investigational. Under the law, reviewers in this process must be independent, so the payer's medical director does not make the decision.

Further, section 27-8-29-13 (c) of the Code states, "The independent review organization chosen under subsection (b) shall assign a medical review professional who is board certified in the applicable specialty for resolution of an external grievance." And section 27-8-29-19 (c)(1)(B) states that the medical review professional "must be knowledgeable about a proposed service through actual clinical experience." So the independent reviewer(s) must be familiar with the matters under discussion.

The insurer bears the full cost of such reviews in Indiana, and the independent, external reviewer's determination is binding upon the insurer.

If It Happens to You

Let's say the procedure you've confidently recommended to your patient is rejected by a payer. You have to explain to your patient that his insurer would not grant an authorization (or would not pay). If you're an Indiana physician, you could appeal the payer's rejection on the patient's behalf.

But the regulations differ significantly in other states. In some, an appeal is allowed for any denial; in others, the external review process applies only to denials of medical necessity or services deemed experimental. In some states the external review is binding on both parties, while in other states it is binding only on the payer.

So you'll want to ask your practice attorney for guidance. And I recommend calling upon your county or state ophthalmology societies for help. Getting local and/or state societies involved is important (and it provides some return for payment of your annual dues).

If you feel that an external review would be appropriate, then you must make such a request and put the payer on notice that you're not happy with its internal review process. I suggest including in your challenge some wording along these lines (ask your attorney to wordsmith as necessary):

"We are requesting an immediate and expedited review of this case by a board-certified and specialty-matched physician who can render a decision based upon the standards of care. If you do not feel that the information provided has established medical necessity, please provide us with your detailed rationale based upon the standards of care, the specialty of the physician who reviewed this case, and whether they are board certified in a matching specialty."

You'll also want to have your "ammunition" ready pending the start of the external review process.

Getting Your Ducks in a Row

Put together a package of materials supporting your position that the service should not be categorized as "experimental" or "investigational" (or why it should be accepted as medically necessary). At a minimum, this should contain:

► A letter to the review body appealing the denial of care.
► Your properly coded and documented claim for services rendered.
► Documentation from various sources, including respected clinical journals and studies attesting to the efficacy and appropriateness of the service.
► Documentation of coverage by Medicare and private payers showing the service is approved for reimbursement.

Remember: depending on a particular state's standards for external review, the reviewer may or may not be knowledgeable about ophthalmic care. For example, the reviewer might be a primary care physician. You'll want to do everything possible to ensure the decision is made on more than just a primary-care knowledge base and personal opinion. You want the decision to be evidence-based.

Securing Your Rights

If your state's laws grant the rights to initiate an external review only to the patient, then you may also want to consider asking the payer for a contractual provision granting you similar rights. It's not a far-fetched request.

The specifics of how this should be written will depend on your state's laws, so your attorney should handle this. But in a nutshell, you want the payer to grant you not less than the same rights afforded its members.

The Future?

Perhaps if enough physicians in a state make use of the appeals process available to them under applicable law, a reluctant payer may be forced to reverse its position — in that one state and for that one service. And, if sufficient uproar is raised by disgruntled physicians and patients, it might just be enough to effect similar change for that payer in the other states where it does business. There's no telling where things can lead when payers are caught in the uncomfortable spotlight of public scrutiny.

But it's clear that no payer is going to change and pay for these services unless it is forced to do so by independent external reviews. These will only occur as the result of legislative action, or of so much bad press that it cannot hide from the very public it claims to serve. OM

Gil Weber, MBA is an author, lecturer and practice management/managed care consultant. He formerly served as the director of managed care for the American Academy of Ophthalmology. Mr. Weber can be reached at (321) 255-6018 or by e-mail at gil@gilweber.com.