In 2009 Payers started to require Peer Reviews within a day of, rather than 3 days after, an admission. They then imposed a time period within which physicians must call back, otherwise there was no Peer or Expedited Review with your physician and only the data your UR staff had provided them. Here are some of the more outrageous strategies I have seen in 2010 and currently being expanded:
Watered Down Appeal ResponsesFor quite some time, Value Options has provided meaningless appeal responses using generic statements of the patient not meeting selected criteria, but not making reference to the specifics in the appeal and the criteria that were met. This is a growing pattern with Payers’ responses. When there is no supportable basis for a denial you will get something like Value Options generic “Treatment planning is not individualized and/or appropriate to the individual’s condition…” with no explanation of what is meant by this. When you challenge this as not being a clinical rationale the spin you get is that this statement “addresses the relationship between the individual’s condition and the treatment plan” and claims that this justifies it as a clinical rationale.

Recently we saw a UBH Evercare denial stating that a patient was denied for no longer having “suicidal ideation which was the primary reason for admission.” However, there were several justifications provided in the appeal including homicidal ideation and unresolved issues in this adolescent’s home that were triggers to her anger that the response failed to acknowledge. The catch-all criterion for Evercare is that “The treatment being provided is appropriate…” which they claim to not have been met but offer no specific examples of this. These are simply subjective and meaningless responses that must be challenged.

What should you expect in response to your appeals? In 2001 the Attorney General for the State of NY defined the State’s utilization laws in an action involving six Managed Care Organizations.

A statement of Reasons and Clinical Rationale must demonstrate that the UR Agent made an individualized medical assessment of the Enrollee by referring to the specific medical data relating to the Enrollee, which the Clinical Peer Reviewer took into consideration when making the Adverse Determination. Merely stating that the service at issue is not medically necessary is not sufficient, nor is a statement that the proposed service does not meet the UR Agent's criteria. A statement of Reasons and Clinical Rationale must be sufficiently specific to enable the Enrollee and/or the Enrollee's health care provider to make an informed decision about whether or not to appeal the Adverse Determination and to determine the issue or issues to address in the appeal.

What advantages do these boiler-plate generic responses provide the payers?
It delays the determination on your appeal, and therefore any payment due you.
They count on the additional requirements and the fear of lost referrals to result in many appeals being dropped from further action.
They count on the fact that this adds more work for your already overworked staff to complete within their self-serving timeliness deadlines, and therefore more appeals are denied.
They can require a new request form to be signed by patients they know may be hard to contact and harder to get to act on when a reversal of a denial frequently means the patients will have a greater coinsurance liability.

What are the most common items missing in these Payers’ denials that are required by Federal and most State regulations?
Disclosure of clinical rationale used in making decision
Disclosure of qualifying credentials of reviewer
Disclosure of evidence or documentation used in decision
Description of the procedures, timeframes, and consumer rights for grievance and appeal.
Response to the specific medical evidence provided and/or other appeal issues.

End of Expedited Appeals
At the same time we are seeing watered down appeal responses, Payers are forcing hospitals to do away with expedited appeals. How are they doing this? The rules are being changed by many Payers to provide only one “Internal” appeal and this past year have added the “expedited appeal” as your one and only internal appeal for certain plans. Who is doing this? So far I seen this employed by American Psychiatric Solutions (APS) for United Family Services, Healthsprings for contracted Medicare providers, and Integrated Mental Health Systems (IMHS).

The disadvantages of conducting an expedited appeal is that you are reliant on your attending physician to have the time, inclination and insurance plan criteria sufficient to defend his/her necessity of continued care against administrative physicians hired to deny that care. You have no written clinical rationale telling you why they denied the care and probably don’t have any opportunity to prepare the physician for each different set of criteria that may be used, etc. There are two options:
Prepare to have your staff do the expedited appeals with your physician conferenced-in or in their place. Know the criteria for the plan and lay out the specific chart examples of how these are being met before the call is made. Have the physician review these and add more support if applicable.
Refuse the expedited appeal, but create a form for UR to get the details of the denial in writing with the names, dates and times as well as the credentials of all payer's staff involved in the denial. Get as much clinical data as possible from them. The advantage is that you now have time to gather the data to support and submit with your one internal appeal.

THE REALITY
Insurance companies know that the budget cuts for State agencies that provide Insurance oversight is taking place at the same time that the Payers have to cut their bids to get Plan contracts. So they cut costs through increased denials, reduced internal appeals, etc. knowing that the State agencies oversight is virtually non-existent.

Managed Care Medicaid and Medicare Fraud and Abuse

When we hear about Medicare and Medicaid fraud and abuse cases, we typically think of cases against the operation of mills and illicit billing practices of providers. When was the last time you heard of a Federal case against Managed Care Companies (MCC) for Medicare and Medicaid fraud? We all know it is happening, but no one seems to do anything about it. With CMS’ renewed interest in the misuse of Federal funds through Medicaid and Medicare programs, the time is now. However, ARA can’t use its existing clients’ database without expecting negative repercussions. We need a joint effort with as many psychiatric hospitals, corporations and other treatment providers as possible to launch an effect counter to the increased rate of denials you have no doubt experienced over the past 10 months.

The current recession plays a critical part in accelerating the trend of the denial of admissions in full or part by capitated MCC’s claiming 17% to 38% reductions in cost over other financial models. Is there a natural logic to this trend? The State Agencies that contract with Medicaid MCC's and are required to provide oversight of them would likely have had their budget cuts resulting in reduced staff. At the same time, many states required more Medicaid contracts to be outsourced to MCC’s under at-risk severely reduced flat-rates. To make a profit, the MCC’s must cut current costs. As the provision of review services is sub-contracted out by the MCC’s, the ability to detect fraud becomes increasingly problematic at the same time that the State Agencies’ reduced staff is less capable of providing the more numerous and complex oversight required by Federal statutes. This is the proverbial domino effect.

Capitated MCC’s have a perverse incentive to deny medically necessary care at the same time that they deny such actions, claim great savings to the States’ by controlling the greedy fee-for-service providers. Claims related fraud detection techniques are well developed, but there are few procedures and/or regulations to address fraud by MCC’s. The potential for illicit monetary gain by the MCC’s has to be suspect whether it be the result of underutilization and/or denial of clinically necessary services we are all familiar with. They also do this by not providing covered services, illicit subcontracts with physicians/review organizations, or business practices that result in an unnecessary cost to the Medicaid program.

ARA has identified patterns of denials of medically necessary services, questionable “peer” review procedures, misinformation, etc. that need to be considered, but we cannot act on this information on behalf of our existing clients without expecting negative consequences to their referral base at the very least. We need to join together to identify the MCC’s who you suspect of similar activities. Here are some examples:
· Patients who receive repetitive short-term treatment but who clearly require long-term treatment. Many of these are denied services under the pretext of “chronic” or “custodial” labels.
Reviewers who routinely label suicidal or homicidal ideations as being “without intent”;
Reviewers with inappropriate board certification e.g. Geriatric or Forensic Psychiatrists, denying Children and Adolescents.
Reviewers involved in more than one level of review on the same case.
An increase in MCC’s denials on admit or a day after that immediately go to “peer” review;
MCC’s from out-of-state not abiding by rules/statutes in your State.
Denials of children referred to treatment by Child Protective Services or denied days after a delayed discharge due to Child Protective Services issues.
State Agencies “rubber-stamping” the denials of care by MCC’s.

Payers Divide and Conquer Tactics in 2009-2010

In 2009 insurance payers became more brazen in their delay and deny tactics with providers and their increased premiums. Some of their tactics appear to be an effort to drive a wedge between providers and their medical staff. This was their response to what clearly looked like a dramatic change in the structure of healthcare in the U.S. Many would have expected a more congenial politically soothing approach from them. Did they know something we didn’t or were they simply scrambling to hoard every last dollar they could before the axe fell? What will happen now that the axe no longer is evident?

Some of the new tactics employed by payers using their increasing war chest has a potentially disastrous implication for free standing psychiatric facilities. Have you noticed what seems to be an increase in authorization requirements? Some payers have instituted a policy that seems to impose a peer to peer requirement on admission. Other payers instituted a short time window within which provider’s physicians must call, making it difficult at best to manage the morning after a busy night.

The immediate impact of these changes are an increase in denials resulting in delays in payments and greater pressure (time and other) on your referring MD’s. Apart from the immediate adverse impact on your cash flow, there are strategic issues to consider with your medical staff:

• Is it likely that your referring MD's reduce the number of admissions because of the added time and headaches imposed by the payers’ tactics?
• Are any key referring MD's likely to consolidate patients in one facility?
• Do any Major Medical facilities in your market area have a psych unit with a psychiatrist on duty at all times?
• Have you experienced friction with your MD's due to your added needs and their more restricted time limitations?
• Are you tightening your admission requirements to avoid cases most likely to be denied by payers? For example, restricting frequent readmit patients because the payers have labeled them “chronic” and/or will not pay for LTC that clearly is needed.

ARA is available to help you with the backlog of appeals as well as to tackle identifiable patterns of abuse by payers. Our success in winning appeals and getting cases before the proper authorities, even when there appears to be no viable options left, makes us a valuable partners for your hospital.

ARA’s staff is also experienced medical staff relations and practice management. We can work out solutions between you and your medical staff to not only counter the payers’ “divide and conquer” tactics, but to make your facility the one of choice in your market place.

Outcome of Union - HIPAA Issue

In September I raised the issue of whether the primary responsibility of Union Health Plan Commissioners is the protection of the Plan or the Union members? With LineCo (the Union), the Plan requires completion of a course of treatment in order for any benefits to be paid out.

The case involved a member who had completed inpatient treatment near the end of one month and was scheduled for outpatient follow-up in the subsequent month. The Plan benefits terminated at the end of the first month as the result of a layoff. The patient postponed the outpatient until he had saved the cash to pay for it. The Union denied the inpatient claim despite the patient having complied with all other DC plans. Our challenge was that the Union was not entitled to Protected Information after their Plan no longer covered the patient. The interpretation of the lawyers was that a request for information after coverage terminates is not unreasonable for a month or two, but that a protracted requirement could be a violation of HIPAA.

One Lesson Learned

If an insurance company is allowed to stall the progress of an appeal for months through gross misrepresentation and incompetence, should they then be allowed to deny a claim for having maxed the prior year's benefits while the appeal was ongoing?

Value Options and Great West just did that and I am not sure why the government keeps giving these guys contracts, nor do I want to speculate on that. They initially denied a claim out-of-network and would not authorize the care despite the fact that they had no in-network facility within 80 miles. Appearing to have won the initial appeal, the claim was then stated to have been "pended" for a contract set-up problem. This was followed by: a billing issue; a dispute over which company was responsible to pay; and two months later denied as the patient had maxed their benefits a month after the treatment at our facility seven months earlier. We are still fighting this but one lesson learned is...

When appealing a claim, particularly one with a known day or dollar max, demand that the proceeds at issue be legally "pended" until all appeals and legal options have been exhausted.

Days Awaiting Placement

Medicare HMO payers are not necessarily experts in Medicare regulations nor are national companies contracted to provide Medicaid benefits experts on each state's regulations. ARA isn't an expert in all aspects of these regulations either, but we do the research as patterns develop.

One such Medicare pattern most hospitals have encountered is the scenario in which a payer denies care after the acute phase is over even when a skilled nursing facility is warranted, but placement is delayed . Your clinical staff acknowledges this, the chart documents your efforts and placement delays, but basically you cannot get further authorization.

A CMS July 2006 provision found in the "Medicare Claims Processing Manual Chapter 3 - Inpatient Hospital Billing; 40.2.2 - Charges to Beneficiaries for Part A Services; C - Inpatient Care No Longer Required" states that:

…that the beneficiary no longer required inpatient hospital care. (For this purpose, a beneficiary is considered to require inpatient hospital care if the beneficiary needed a SNF level of care but an SNF-level bed was unavailable.) The hospital cannot issue a notice of noncoverage if a bed is not available. Medicare pays for days awaiting placement until a bed is available…

In the case of non-Medicare situations similar to the above where the payer refuses further authorization at the current level of care, we suggest you consider an ad hoc agreement (See "Ad Hoc" blog) for a lower level of care rate, unless the payer is simply wrong. For example in Texas if Child Protective Services extends a stay, out of state contractors do not always know that the hospital is entitled to 3 extensions of 5 days each.

AD HOC LLOC

DON’T GO INTO HOC…AD HOC
Too many facilities are retaining patients at the current level of care after further care at this level has been denied by the payer. The alternative is to provide the level of care your clinical staff believes is warranted and empower your designated staff (e.g. UR, UM) to negotiate an ad hoc agreement with the payer at a lower rate in lieu of discharging the patient. Clearly the rate you get is greater than a denial, but typically it is also greater than the net an appeal will yield.

Yes ARA is giving away a big tactical game plan. If your chart is not strong enough to support the higher level of care the odds of winning an appeal drops from 80+% to less than 50%. The most common examples include negotiating rates from Acute to PHP, SNF or RTC. Sometimes your clinical staff will agree that a patient is no longer acute but their home situation is too precarious for the patient to return while attending PHP, or the family is unable to provide the care of a SNF or RTC, or simply a bed is not available. When a bed is not available for the lower level of care, these days are referred to as Days Awaiting Placement and have legitimate payment potential.