Utilization management, case management and you.

Medicare, as a risk-carrying organization, does its own reviews through PROs. Today, physicians who are on capitation or are members of Accountable Health Providers (AHPs) are forced to self-monitor the cost of the services they render without diminishing the satisfaction level of customers/patients. Therefore, it is not unreasonable to expect that an increasing amount of health care monitoring will be done by medical groups or other providers themselves. Monitoring will enable them to remain in the market as viable AHPs, or compete with other groups to subcontract with health maintenance organizations (HMOs) or management service only (MSO) groups.

As organized medicine increases publication of parameters and guidelines, these parameters will help monitoring agents standardize their protocols. Standardization will allow treating physician to improve care plans and proactively justify deviations from the standards. These proactive efforts will help the patient by solving utilization management problems before they occur and thus avoiding unnecessary delays in the provision of care.

Health care cost containment efforts by health care services monitoring effort have been dissected and commented on through court decisions for several years. In the recent past, the Wickline case (Wickline v. State of Cal., 183 Cal. App. 3d 1175, 228 Cal. Rptr. 661, reh'g granted, 727 P.2d 753, 231 Cal. Rptr 560 [1986]) stressed the fact that utilization review must be a well-delineated monitoring process that ensures the right to appeal for the patient and the physician. The court stated that third-party payers could be held liable for "defects in the design or implementation of cost containment mechanisms" that result in the denial of medically necessary services.[1] The Wickline case also affirmed that the responsibility for the results of actions committed as a consequence of an audit, fall on the shoulders of the treating physician, if the physician does not appeal the decision.

A few years later, the Wilson case (Wilson v. Blue Cross of Southern California, Case No. C-476,997, Los Angeles County [Central] Court) established the fact that, while the physician was still responsible for outcomes of care or lack thereof, the agency doing the utilization review was a participant in the liability if its actions resulted in damages to the patient.[2] The Court said that there was substantial evidence that the review organization's "decision not to approve further hospitalization was a substantial factor in bringing about the decedent's demise."[3]

Kazon states that, in the Wilson case, "the court refused to follow the previous ruling that third-party payers would be liable only if physicians first exercised their duty of protest. As a result, any third-party payer can be held liable, regardless of whether or not the physician objects to the patient's discharge. Consequently, payers will have to be even more careful to ensure the appropriateness of any denial of treatment."[4]

At a 1991 meeting of the Health Care Insurance Association of America, Steven B. Epstein, an attorney with Epstein Becker Green, Washington, D.C., indicated that "people" viewed denial of payments as denial of care and that the courts are tending to agree with the "people." Epstein also pointed out that, when cost containment efforts include encouraging, through the use of financial incentives, or requiring the use of selected providers, legal liability may follow. The organization that does the encouraging, requiring, and/or selecting is therefore at risk. Whenever the type of care chosen or the extent of care is influenced by a coverage decision, there will be liability.[1]

In the Wilson case, on further appeal, the court found the insurer not negligent, but it also found that the insurer had breached the insurance contract because the policy did not specifically allow for utilization review.[5] By the time the appeal was decided, the review organization had settled out of court with the Wilson family. Serbaroll states that: adverse outcomes attributable to utilization review determinations of care will certainly be a fertile ground for lawsuits. The decisions of "gatekeepers," who in many cases are not even physicians, will be subject to thorough scrutiny when patients are injured by a decision denying admission or treatment procedures.[6]

J. Mark Waxman, at the 10th Annual Meeting of the Self-Insurance Institute of America, pointed out that, in utilization management, you must have procedures for every key element of the program, and people have to know what your procedures are. The organization must ensure that procedures are followed and that there is an appeal mechanism that is fair, objective, and documented. It is important that those participating in the review process document not only what they did, but why they did it and what criteria they were following. Waxman also recommends that utilization management personnel be educated "so they understand how liability arises. They should also understand that somebody is going to be looking back at what they did."

One of the easiest ways to prove reckless conduct, which is a benchmark for punitive damages, is to show that a problem came up one or two years ago and the provider never answered it. When the problem "comes again," the evidence is going to be that the provider knew of the issue beforehand and that a conscious decision was made to disregard it.

Waxman also cautions about guaranties on promotional literature that either cannot be delivered or will come back as a litigation issue. Promotional statements may give the impression that utilization management reviewers are biased and/or have hidden agendas. Everything that is written must be objective and factual.[7]

An interesting point in the Wilson case is that the suit was against the monitoring entity, not the hospital or the physician, even though the physician had stated in court testimony that discharging Mr. Wilson from the hospital had been a clinical decision and not an economical decision forced by utilization review. Similarly, in the Wickline case, neither the physician nor the hospital were sued. Patients held the viewers as the cause of all damages.

Many states are concerned about the quality and the fairness of utilization management reviewers. In an effort to respond to those concerns and to the lobbying of medical societies who see review as an intrusion into the patient-doctor relationship, many states are establishing licensure requirements for reviewers. The states are also beginning to define "peer" in the "peer review" process so that, in an appeal, the ultimate opinion in the review is that of a rue "peer."

Ideal Scenario

Utilization management should be a process that involves group decisions from team that includes: the treating physician, the patient, and the monitoring agent. The process should be one not of audits, but of proactive behavior modification of all involved. This will be accomplished through proper incentives that demonstrate the benefits that efficient and efficacious care will bring to patients and physicians.

The patient and the physician should be offered alternatives by the UM reviewer that, while more efficient, are still capable of fulfilling the patient's needs. The team should also discuss the appropriateness of the patient's perceived needs. Not everything that is "a good idea" is appropriate or efficient in the care of a particular patient. The patient and the physician must be made aware of the cost benefit of each treatment alternative.

This new process should replace the "emphasis on denial" approach. The central idea is not to deny a service, but rather to fulfill needs through efficient use of resources using the team decision approach, with the goal of satisfaction of each and every team member-the patient, the physician, and the reviewer. Monitoring agents (review personnel) must be cognizant of the alternatives and be armed with the latest parameters or guidelines for care for that disease/situation from the appropriate specialty society. The parameters or the reviewer actions must be in accordance with the latest standards of efficient and efficacious care.

Physicians should be encouraged through education and financial incentives to be efficient. Frugality in health care delivery must become a way of life for treating physicians. This major behavior modification must start in medical school. Considering today's market pressures, health care organizations cannot afford to keep on their provider rosters physicians who do not strive for efficiency. No audit system is invulnerable to the efforts of a physician determined to bypass it, so provider selection is a must.

Patients must be educated on the adverse results created by decreased efficiency, increased costs, and unchecked demands in the provision of health care. The public must understand that money paid for health services is denied to somebody, or something, somewhere else. The money used to pay health care claims or health care premiums may replace an expected large bonus, a needed pay raise, or an increase to educational funds.

The most important goal is for patients and physicians to understand that increased efficiency in health care delivery benefits them in the long run and preserves our health care system, which is the best in the world. The key to good utilization management is the foollowing question and answer, addressed to all involved: payers, patients, and physicians. What is in it for me? High-quality care, as needed.

References

[1.] Crosson, C. "Managed Care Companies. More Exposed to Legal Liability." National Underwriter, Life and Health/Financial Services Edition, May 6, 1991. [2] Kenkel, P. "California Jury Clears Blues on Utilization Review Call." The Week on Healthcare Insurers, April 27, 1992, p. 18. [3] "Third-Party Payer May Be Liable for Patient's Death." News Digest, August 27, 1990, p. 27. [4] Kazon, P. "State Court Decisions; Liability: Third Party: Utilization review; Hospitals; Discharge." Business and Health 8(12):58-9, Dec. 1990. [5] Anonymous "Health Insurance; Utilization Review; Liability; Litigation; Court Decisions." Employee Benefit Plan Review 47(2):73-4, Aug. 1992. [6] Serbaroll, F. "Managed Competition and Legal Liabilities." New York Law Journal, Health Law, July 7, 1993, p. 3. [7] "If You Manage Utilization, Watch Exposures: Lawyer." National Underwriter, Property and Casualty/Risk & Benefits Management Edition, Oct. 3, 1990, p. 3.