Doctors challenge HMO treatment-review process.

They call reviewers unqualified to decide coverage

In what might be called a battle of the titans, the California Medical Association, a trade and lobbying organization for California physicians, and several California health maintenance organizations are going head to head over the issue of "utilization review."

Utilization review is the process by which health maintenance organizations determine which medical procedures and treatments they will reimburse physicians for performing.

The utilization review battle is being played out in the state Legislature. State Sen. Daniel McCorquodale, D-Modesto, introduced a bill (SB 1348) in January which would severely limit the freedoms that HMOs now have to perform utilization reviews.

The physicians' association contends that the people performing such reviews on behalf of the HMOs are often out of line in their determinations of which procedures are appropriate. The reviewers base their conclusions on case files and billing documents, rather than on conversations with patients, the physicians' group argues.

Furthermore, physicians complain they are often stiffed by HMOs after completing treatments because the review process, done after the fact, concludes the services provided were unnecessary.

The McCorquodale bill, SB 1348, which is sponsored by the California Medical Association, was approved by the Senate Insurance, Claims and Corporations Committee this month. It would require HMOs to disclose to enrollees and physicians all medical procedures considered "appropriate" and eligible for coverage.

The California Medical Association is arguing that the case-by-case nature of utilization reviews now being conducted by HMOs makes it difficult for physicians to determine ahead of time whether they will be reimbursed for performing certain treatments. The fact that each HMO has its own policies about which medical procedures it will fund has made practicing medicine a logistical nightmare, the California Medical Association asserts.

According to Danielle Walters, spokeswoman for the physicians' association, most physicians contract with several different HMOs. And that means their administrative workload has become quite a burden.

"Each patient a physician deals with in a day may have a different health plan," she said. "(Physicians) spend a lot of time trying to figure out what they can give to whom."

One provision in SB 1348 would give power to the Department of Corporations, the state agency which licenses HMOs in California, to mandate which treatments are appropriate and eligible for coverage by California HMOs, according to the California Medical Association.

The problem, according to Bob Holt, director of professional relations for the Los Angeles County Medical Association, is that HMOs, through utilization reviews, are making medical decisions based on administrative analyses.

"All they (reviewers) ever look at is billing forms and medical records, and (reviewers) are making clinical judgments without ever having seen a patient," complained Holt.

Cost control has become a major area of focus in health care, particularly as managed care becomes a growing fact of life. Cost control is at the heart of utilization review, according to Sharon Jacoby, president of Managed Care Resources, a Westwood-based company which trains and provides utilization review nurses to hospitals on a temporary basis. The process is aimed at eliminating unnecessary costs associated with prolonged hospital stays and excessive tests and treatments, reviewers explained.

According to Jacoby, utilization reviews are like audits. "They (HMOs) simply want to make sure the dollars are not being overspent," she said.

Abuses are common in health care, she claimed. Patients sometimes lie about the

treatment that they need. Another common abuse involves doctors overextending patients' hospital stays because the patients have nobody at home to look after them, she said. In addition, abuses remain commonplace in the California workers' compensation system, despite last year's reform measures. And those are the types of abuses utilization review hawks are trained to uncover and squelch.

The California Medical Association contends, however, that many reviewers are not qualified to conduct such assessments. In most cases, nurses determine whether a particular service or treatment should have been administered. Those same nurses also often decide whether the physician who performed the care will be reimbursed by the insurance company.

Again, the argument centers on the issue of cost. Doctors argue that, in cases that demand highly specialized knowledge, nurse reviewers are not qualified to assess the situation. Trained specialists or sub-specialists in the relevant field should be the only ones allowed to make such determinations, physicians argue.

Meanwhile, HMOs argue that using specialists or sub-specialists would raise HMOs' operating costs and that using such high-priced physicians would be too costly without raising premiums on enrollees. HMO executives, as well as the California Association of Health Maintenance Organizations, also pointed out that at times HMOs have called in specialists if doctors contended the decision made by the nurse's review was incorrect.