(1) Introduction. The needs of patients are best served by free market competition and free choice by physicians and patients between alternative delivery and financing systems, with the growth of each system determined not by preferential regulation and subsidy, but by the number of persons who prefer that mode of delivery or financing.
(2) Definition. “Managed care” is defined as those processes or techniques used by any entity that delivers, administers, and/or assumes risk for health care services in order to control or influence the quality, accessibility, utilization, or costs and prices or outcomes of such services provided to a defined enrollee population.
(3) Techniques. Managed care techniques currently employed include any or all of the following: (a) prior, concurrent, or retrospective review of the quality, medical necessity, and/or appropriateness of services or the site of services; (b) controlled access to and/or coordination of services by a case manager; (c) efforts to identify treatment alternatives and to modify benefits for patients with high cost conditions; (d) provision of services through a network of contracting providers, selected and deselected on the basis of standards related to cost-effectiveness, quality, geographic location, specialty, and/or other criteria; (e) enrollee financial incentives and disincentives to use such providers, or specific service sites; and (f) acceptance by participating providers of financial risk for some or all of the contractually obligated services, or of discounted fees.
(4) Case Management. Health plans using the preferred provider concept should not use coverage arrangements which impair the continuity of a patient’s care across different treatment settings.
With the increased specialization of modern health care, 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 to 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.
Any health 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.
(5) Utilization Review. The medical protocols and review criteria used in any utilization review or utilization management program must be developed by physicians. Public and private payers should be required to disclose to physicians on request the screening and review criteria, weighting elements, and computer algorithms utilized in the review process, and how they were developed.
A physician of the same specialty must be involved in any decision by a utilization management program to deny or reduce coverage for services based on questions of medical necessity. All health plans conducting utilization management or utilization review should establish an appeals process whereby physicians, other health care providers, and patients may challenge policies restricting access to specific services and decisions to deny coverage for services, and have the right to review of any coverage denial based on medical necessity by a physician independent of the health plan who is of the same specialty and has appropriate expertise and experience in the field.
A physician whose services are being reviewed for medical necessity should be provided the identity of the reviewing physician on request. Any physician who makes judgments or recommendations regarding the necessity or appropriateness of services 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.
All health benefit 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 coverage for the former. 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, or negatively affect the physician’s fiduciary responsibility to his or her patients. It is the responsibility of the patient and his or her health benefits plan to inform the treating physician of any coverage restrictions imposed by the plan.
All health plans utilizing managed care techniques should be subject to legal action for any harm incurred by the patient resulting from application of such techniques. Such 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.
When inordinate amounts of time or effort are involved in providing case management services required by a third party payer which entail coordinating access to other health care services needed by the patient, or in complying with utilization review requirements, the physician may charge the payer or the patient for the reasonable cost incurred. “Inordinate” efforts are defined as those “more costly, complex and time-consuming than the completion of standard health insurance claim forms, such as obtaining preadmission certification, second opinions on elective surgery, certification for extended length of stay, and other authorizations as a condition of payer coverage.”
Any health plan or utilization management firm conducting 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. Any health plan requiring prior authorization for covered services should provide enrollees subject to such requirements with consent forms for release of medical information for utilization review purposes, to be executed by the enrollee at the time services requiring prior authorization are recommended by the physicians.
In the absence of consistent and scientifically established evidence that preadmission review is cost-saving or beneficial to patients, the AMA strongly opposes the use of this process.
Policy Timeline
Joint CMS/CLRPD Rep. I-91 Reaffirmed: CMS Rep. I-93-5 Reaffirmed: Res. 716, A-95 Modified: CMS Rep. 3, I-96 Modified: CMS Rep. 4, I-96 Reaffirmation A-97 Reaffirmed: CMS Rep. 3, I-97 Reaffirmed: CMS Rep. 9, A-98 Reaffirmed: Sub. Res. 707, A-98 Reaffirmed: CMS Rep. 13, I-98 Reaffirmed: Res. 717, A-99 Reaffirmation A-00 Reaffirmation A-02 Reaffirmation I-04 Reaffirmed in lieu of Res. 839, I-08 Reaffirmation A-09 Reaffirmed: Sub. Res. 728, A-10 Reaffirmation I-10 Reaffirmation A-11 Reaffirmed: Res. 709, A-12 Reaffirmed: CMS Rep. 07, A-16 Reaffirmed: CMS Rep. 08, A-17 Reaffirmed: CMS Rep. 04, A-18, CMS Rep. 04, A-18Reaffirmation: A-19; Reaffirmed: CMS Rep. 4, A-21 Reaffirmation: A-22