Clarifying Medical Necessity Criteria

Our group is working with a number of clients currently and a key componenet wrking with both payers of healthcare as well as providers of healthcare is underrstanding and executing medical necesity criteria.  Care managers often struggle over how to intrepret the criteria fairly and povider struggle at how to express the criteria that an idividual patient is exhibiting. Medical Necessity Criteria (MNC), one of the most vital aspects of healthcare and treatment, is still very ambiguous.   Numerous definitions for MNC can be challenging for providers and practitioners to know just exactly how different interpretations can impact care.  Please see the article in its entirety by Robert Levine that  will outline what is essential to understand about Medical Necessity Criteria, and how personal interpretation maintains a role in treatment distinguishing between what is “beneficial” for consumer health and what is “essential.”  Please sign up for our newsletter.

In tomorrow blog I will review MNC exceptions.

Increased Adoption of “Never Event” Payment Policies

Never events are medical events that are serious, largely preventable, and of concern to both the public and health care providers.  The National Quality Forum has identified a list of 28 events such as surgery on the wrong patient, and hospital acquired injuries which are currently identified as never events, but proponents would like to add more events to this list.
The payment policies for never events as set forth by Minnesota, and followed by more and more states recently states that providers will not be reimbursed for procedures and treatments needed as the result of a preventable serious medical event. These events as reported by the CDC account for 2.4 million extra hospital days per year and $9.3 billion dollars in excess charges.
Payers which are adopting these policies include Aetna, CMS, and Blue Cross and Blue Shield, Medicaid (in some states such as VA, and PA).  Payers insist that the purpose of these policies is not to save money, but to raise awareness and accountability within hospitals, and help medical establishments prevent serious errors. Increasingly medical “Never Events” are being worked into hospital contracts as they come up for renewal, but not everyone is on board with the adoption of these policies.
Some providers are worried about events which may occur even after they have put significant safe guards in place  such as suicide and falls.  Others are concerned about payment determination wondering how it will be determined which services are related to “Never Events” and which are not.  Patient advocates are also up in arms since if the insurer fails to pay and the hospital disputes the charges the patient may still be responsible.  Whatever the outcome of these disputes, “Never Events” policies are catching on and Managed Care Organizations as well as providers should become familiar with these events and the related payment policies going into the future.  BHM can help in designing quality improvement programs to decrease the risk of Never Events.

Slumping Profit Margins Predicted for Health Plans Through 2011

We published the above headline in our February Newsletter. Since we published the newsletter a number of large insurers have released their quarterly results.  See article on Aetna Healthcare.

 As we pointed out, health insurance companies are getting both downward pressure due to loss of  members. That unfortunately does not tell the whole story.  Layed off workers that are healthy do not elect cobra.  Layed off workers that have significant medical problems elect to pay for their insurance through cobra.  This creates a self-selection.  Insurance companies are feeling the pinch of lower revenue and  increased care cost per member they are insuring.  Insurance companies can react in a number of ways.

1. Increase premiums

2. Increase scrutiny of medical services they are paying.  This will result in increased denials of care.

3. Try to remove high cost groups or members

We at BHM believe that most insurers will do a bit of all three methods to improve profits but because of the current economic environment we believe that increased denials maybe the method of choice. In future blogs I will be addressing what insurance companies can do to help reduce the cost of care in a strategic way.   We will also address what providers of care as well as consumers can do to prepare for these changes and possible increase in insurance denials.