Tightening the leash: Managed care hassle factors getting bigger
■ Although the restrictive rules aren't as pervasive as they used to be, physicians are seeing new constraints in their plans' contracts.
By Robert Kazel — Posted Oct. 18, 2004
If doctors seeking coverage for patients think they're detecting a resurgence of the managed care "hassle factor," their instincts may be right.
Insurance executives argue that any bureaucratic bridles placed on physicians are tolerable -- and comfortably loose compared with those of a decade ago. They point to the trend toward elimination of such barriers as gatekeeping requirements for access to specialists. But don't ask Randy Wexler, MD, MPH, for confirmation.
For one thing, he doesn't have much time to chat: That's Dr. Wexler on the telephone, waiting to talk to a managed care doctor to dispute a denial of a patient's request for precertification. The Columbus, Ohio, family physician has been on hold for 10 minutes.
"It is probably one of the most frustrating things I deal with in my life," Dr. Wexler says. "I'm sitting here with my patient in my office, trying to determine with him what the best treatment is. Then I have to go outside the room, and leave the patient, and talk to a faceless entity somewhere else in the United States who is trying to review what is best for my patient. And what's frustrating is I don't necessarily believe, in a lot of instances, it really saves any money."
For Dr. Wexler, new opportunities to navigate the managed care maze present themselves daily. Requests to do MRIs of patients' joints get rejected as a matter of course, with the insurer telling the patient to consult an orthopedist instead. One insurer routinely declines to cover an antidepressant because it suspects the drug is being used to treat nicotine addiction and requires the doctor to fax over paperwork assuring that it isn't. A payer insists that patients with allergies buy over-the-counter medication unless the staff documents why a prescription is required. Another refuses to pay for osteoarthritis drugs unless the office fills out a 10-item questionnaire -- every time, even for refills.
Some of the most maddening of insurers' cost-cutting policies, as immortalized by Helen Hunt's profane rant against the bleeping HMOs in the 1997 movie "As Good As It Gets," eased after outcries from patients and organized medicine. But in many markets, physicians are seeing new, tightened constraints by payers searching for ways to suppress costs but lacking proven alternatives that don't involve some variety of saying "No." While not as pervasive as the HMO rules of yesteryear, these newly reincarnated restrictions drain the time and energy of doctors and staffs.
Insurers' latest strategies to control health care spending, industry experts say, differ from the broad-brush methods that were tried by many plans years ago. They employ modern computer analyses of claims to apply old-style tools, such as prior authorization, with the precision of a laser.
"It's not a wholesale return to those of the late '90s, ... but it's a refinement of them," says Glen P. Mays, PhD, MPH, an associate professor of health policy and management at the University of Arkansas. Dr. Mays co-authored a study published online in August by Health Affairs on the subtle re-emergence of some managed care policies that doctors dislike.
"Businesses are putting on pressure to lower costs, and health plans want [to offer] lower premiums than competitors," says Gary Claxton, vice president of the Henry J. Kaiser Family Foundation in Washington, D.C., and co-author of the Health Affairs study. "But they don't want to put people off. So [utilization management] is more focused. It's not that every specialist visit needs a prior authorization. ... Not nearly as many patients are being affected by what is being done. I think that's how you reintroduce this [with less consumer backlash]."
Seattle-based Regence BlueShield, for example, has put in place stricter prior authorization requirements for procedures such as gastric bypasses and skin surgeries that might be considered cosmetic, says Jeffrey Robertson, MD, executive vice president for health care services. It has enacted prior-approval rules for multiple visits to various nonphysicians, such as physical therapists. Regence also beefed up its retrospective review of physician treatment patterns to identify those practicing outside professional norms.
Other health plans have increased the presence of utilization review nurses working inside hospitals, in part to facilitate earlier discharges. Excellus BlueCross BlueShield of Syracuse, N.Y., this year rolled out a pilot program dispatching its nurses to high-volume hospitals where they can, when necessary, "disagree with the hospital staff about the level of care," says Norm Lindenmuth, MD, vice president and chief medical officer of the plan's central New York region. Excellus also is considering sending these nurses to visit doctors' practices, he says.
"If this proves successful, we'll be looking at the outpatient setting next," he says. "We call that phase two."
Shining a light on scans
Private insurers appears to be tightening the reins the most on big-ticket medical procedures such as diagnostic imaging.
One plan, Pittsburgh-based Highmark BlueCross BlueShield, is seeking to reduce the use of imaging by gradually phasing in new rules for reimbursement of MRI, CT and PET scans. All outpatient clinics that do imaging are now being re-evaluated by Highmark to see if they should be reprivileged, says Carey Vinson, MD, the plan's medical director for quality management. Starting in 2005, preauthorization for scans will be required of all practices. The plan's spending on imaging has increased by at least 20% annually for the last three years, Dr. Vinson says.
"We recognize this new approach will not make physicians thrilled for having to contact us [for prior approval]," he says.
This summer, Wellesley, Mass.-based Harvard Pilgrim Health Care introduced rules requiring practices to ask National Imaging Associates, a rapidly growing New Jersey-based radiology utilization management firm, to approve all scans. NIA does preauthorization for 40 health plans. Harvard Pilgrim anticipates that 70% of the time practices will get approval with one phone call, but in the other cases doctors must talk to a utilization review nurse or doctor, who might recommend that a scan not be done, says William Corwin, MD, a Harvard Pilgrim medical director.
Unlike most of NIA's other health plan clients, Harvard Pilgrim opted not to initiate so-called "hard denials," Dr. Corwin says, meaning that if a doctor insists on a scan, Harvard Pilgrim won't decline to cover it. The hurdles nonetheless are designed to help persuade doctors that the scans are frequently unnecessary, and the plan is expecting the utilization review process to discourage physicians from even attempting to get some of the scans approved, he says.
Employers balk at bills
Some insurers reject the notion that managed care is weighing any more heavily on doctors now, and argue that the opposite is true. "Well over 99% of procedures do not require precertification," says Marjorie Schulman, MD, Aetna's senior medical director of its Northeast region. "The list is really small and is getting smaller rather than larger all the time. ... I go out to see employers all the time, and I can't recall one who wanted a return to dramatically longer precertification lists and 'denial management' managed care."
But industry observers say some health plans are looking at limited redeployment of managed care restrictions where employers seem amendable to a moderate degree of utilization management.
Arizona Public Service, a self-insured electric utility with 6,500 employees based in Phoenix, has recently instituted more preauthorization requirements for prescription drugs and is keeping in place gatekeeping requirements for access to medical specialists for the 30% of its workers in HMOs, says Donna Thomas, the company's manager of compensation and benefits. UnitedHealth Group, one of the company's network managers, also has intensified utilization review of hospitalized patients, she says.
"I think it has kept the medical community on their toes, and patients aren't allowed to stay in the hospital too long," Thomas says.
Such sentiments aren't unusual, says Joe Martingale, the New York-based national leader of health care strategy for the consulting firm Watson Wyatt.
"Many employers would consider almost anything within reason to address" high medical costs, he says. "The cost problem is as bad or worse than it's ever been." Employer-sponsored health premiums increased 11.2% in 2004, with the average cost of coverage for a family rising to $9,950, according to a report by the Kaiser Family Foundation.
The temptation to reassess some managed care techniques stems from what industry experts call "the empty toolbox" -- the insurance industry's current uncertainty over the utility of various other cost-control strategies. Though most health plans are shoring up disease management and case management programs, for instance, these initiatives -- while promising -- are seen by some as incomplete, conservative solutions to spiraling costs, Martingale says. "By themselves ... those systems in and of themselves are unable to meet the task. It's a rear-guard action," he says.
A lack of certainty exists, too, about consumer-directed insurance products -- which may involve high deductibles -- tiered drug formularies and physician networks, and medical spending or savings accounts. Only a small proportion of employees have signed on to these plans so far, and a recent survey from the consulting firm Towers Perrin found a growing majority of workers feel that they shouldn't bear additional financial responsibility for health care coverage.
At the same time, gravitating toward more intensive managed care controls simply by default, or applying them more widely, could create more problems for employers and health plans than it's worth -- especially if they stir animosity because they're introduced without careful attention to doctors' opinions, Dr. Mays says.
"A major factor in the backlash [of the 1990s] was not caring about doctors -- the undue burden on physicians," he says. "If these [changes in restrictions] place undue burdens on physicians and hospitals, there is going to be a reaction. Plans would ignore those risks potentially at their own peril."