Copyright 1999 Federal News Service, Inc.
Federal News Service
JUNE 23, 1999, WEDNESDAY
SECTION: IN THE NEWS
HEADLINE: PREPARED TESTIMONY BY
ASSOCIATE DIRECTOR OF LEGISLATIVE AFFAIRS
BEFORE THE HOUSE COMMITTEE ON COMMERCE
SUBCOMMITTEE ON HEALTH AND ENVIRONMENT
Chairman Bilirakis and members, my name is Connie Barron. For the last
five and a half years I have been the Associate Director of Legislative Affairs
for the Texas Medical Association. In that capacity I represent approximately
35,000 physicians, residents and medical students. My primary focus is in areas
of public policy affecting the quality and access to care for patients in
managed care systems. On behalf of these Texas physicians and their patients, I
want to thank you for holding these hearings to explore the important issues of
access to a timely and fair appeal when a patient is denied care deemed
necessary and appropriate by a treating physician. Texas has had the honor of
being at the forefront of patient protection legislation, and I appreciate the
chance to share our experiences with you."Medically Necessary" Who Decides?
The first attempt to deal with the issue of medical necessity arose in Texas
in 1991. At that time, a utilization review law was passed that established
standards by which utilization review agents conduct business in Texas.
Physicians believed then as they do now that decisions regarding "medical
necessity" should be based upon criteria that are scientifically and clinically
sound and flexible enough to meet the individually unique circumstances of a
particular patient. These criteria should be fully disclosed and available for
discussion. In other words, everyone-physicians, patients, health plan
representatives--should know and understand how these decisions are made. We
chose not to define "medical necessity," but rather to set out standards such as
those referenced above. In 1995 regulations regarding these reviews were
strengthened to include disclosure of the criteria to the treating physicians
and the patient. In addition, any decision to deny care must be appealable to a
physician of the same or similar specialty who is most likely to provide the
kind of care being requested, and any special circumstances of the patient must
be taken into consideration. In 1997, an independent review provision was added.
If the treating physician disagrees with the plan's specialist or the criteria
used, an independent third party may be requested to review the case.
Additionally, Texas chose to clarify that if a managed care plan makes a
decision to withhold payment for care in spite of the
recommendations of thetreating physician, the managed care plan can be held
legally accountable in Texas courts.
Industry Claims regarding Medical
You will hear claims that without full authority to
define medical necessity, managed care plans would be unable to set quality
standards for their participating physicians. Managed care plans would be unable
to educate physicians regarding appropriate care and physicians would have free
reign to order anything they want simply by claiming that it is medically
necessary. Costs would skyrocket and the number of uninsured would increase.
Members, none of these things have happened in Texas.
Prior to enacting our
appeals provisions, physicians frequently were sent letters stating simply, "..
the care you have requested does not meet our standards of medical necessity..
"and is therefore denied. No explanation was given. When the plan was called, a
clerk would tell the doctor that the criteria were confidential and the patient
could write and ask the plan to reconsider its decision. All appeals were
internal and final. This kind of process is not educational for physicians. It
certainly does not set standards for quality, and clearly, it does nothing to
improve patient care.You will frequently hear managed care plans refer to
"evidence based medicine." Nothing in the Texas standards for medical necessity
decision-making conflicts with this concept. Based on their code of medical
ethics and their training as scientists, physicians are morally and
intellectually bound to ground recommendations for their patients' treatment in
the best available science. Because double-blind, controlled studies are not
available for all treatment regimens, physicians tend to use the following
algorithm for making these decisions: 1) Decision rests upon valid and reliable
evidence, when it exists, (evidence- based medicine) that is appropriate given
the patient's individual circumstances.
2) Peer reviewed evidence meets
professionally recognized standards of validity and replicability
Generally accepted standards of medical practice (these criteria are being used
in courts today for many cases in which no clinical evidence exists)
Physicians welcome updated scientific information. They are accustomed to
discussing cases with colleagues in an attempt to achieve the best outcome for
their patients. These guidelines should be at the heart of any standards
established for medical necessity decision making.It is imperative that there be
an independent review entity that will evaluate all available information,
consider the individual circumstances of the patient, and render an expert,
unbiased decision regarding any dispute over the medical necessity or
appropriateness of care.
Finally, we believe there must be legal
accountability when managed care plans make medical decisions that harm
patients. Without this "hammer" there is no true mechanism for enforcement. The
Texas law protects good managed care plans by requiring an external review prior
to litigation, except in such cases where harm has already occurred. Other
states may choose to provide other enforcement mechanisms such as administrative
or licensure models. Regardless of their approach, the states have long had the
duty to ensure quality medical care is provided to their citizens. Decisions
about a specific treatment for a specific patient is in our judgement, the
practice of medicine and belongs under the purview of the states.
Experience - - Appeals, Independent Review and Liability
There have been
many warnings about the negative impact that managed care
reforms will have on access to health insurance coverage. When the
Texas Legislature strengthened the appeals process of managed care plans and
added an independent review and liability provision to the law, health plans
predicted direconsequences. They said litigation would run rampant, costs would
skyrocket and the managed care market would shrink. None of these predictions
have come true.
Two years after the passage of our managed care liability
act, to my knowledge, only one lawsuit has been filed. Plocica v. NYLCare is a
case in which the managed care plan did not obey the law and a man died. This
case exemplifies the need for accountability at the end of the review process.
Mr. Plocica was discharged from the hospital suffering from severe clinical
depression. His treating psychiatrist informed the plan that he was suicidal and
required continued hospitalization until he could be stabilized. Texas law
required an expedited review by an independent review organization prior to
discharge. Such a review was not offered to the patient's family. Mr. Plocica
wife took him home. During the night he went into his garage, drank antifreeze,
and subsequently died. Without the threat of legal accountability, these kinds
of abuses will go unchecked.
External reviews continue to
demonstrate their value by overturning plan denials approximately 50 percent of
the time. Having this independent entity available has improved communications
between physicians and plans. These improved communications ensure that the best
care is available for the patient most of the time. When there is a dispute over
appropriate care, patients have the benefit of an unbiased expert' s review of
the case. The independent review process has promoted confidence in the managed
care systems operating in Texas.
The independent review program has been a
success for patients and managed careplans alike; however, it was recently ruled
to be pre- empted by ERISA. A federal district judge concluded that such a
review involved the determination of employee plan benefits and could not be
imposed by the state. Unless Congress acts to establish an independent review
process, the excellent program in Texas (as well as the independent review
process in 25 other states) is in jeopardy.
Just as there has not been a
vast increase in litigation, neither has there been skyrocketing insurance
premiums. The national average for overall health care costs increased by 3.7
percent in 1998 while Dallas and Houston markets were well below average at 2.8
percent and 2.4 percent respectively. Other national surveys show Texas premium
increases to be consistent with those of other states that do not have the
extensive patient protections passed by the Texas legislature.
Nor has the
managed care market in Texas withered. In 1994, the year prior to the first set
of managed care reforms, there were 30 licensed HMOs in Texas.
Today, there are 51. In a recent newspaper article, Aetna CEO, Richard L. Huber,
referred to Texas as the "... filet mignon" when asked about Aetna's plans to
acquire Prudential. This does not support the accusations that Texas laws would
have a negative impact on the ability and the desire of managed care plans to do
business in our state.Summary
Texas has passed one of the most comprehensive
packages of managed care reforms in the country. At every step
members of the Legislature were told of the terrible consequences of requiring
managed care plans to abide by certain standards in determining medical
necessity, provide a fair and timely appeals process, require an independent
review of medical care denials and more. When the Legislature spoke on the issue
of managed care liability by holding managed care plans legally accountable if
their negligent decisions cause harm to enrollees, managed care plans said it
would be the end of managed care in Texas.
Most of the managed care
reforms have been in place for more than four years. The external
review and liability provisions have been law for almost two years. We have yet
to see the threatened consequences materialize. On the contrary, the managed
care market in Texas is thriving. Physicians report that it is now easier to
have meaningful discussions with managed care plans regarding patient care.
Access to an independent external review organization ensures that care is
provided when it is medically appropriate based upon scientific information.
There has not been a plethora of litigation, but one enrollee will have
appropriate redress for the negligence of a managed care plan that resulted in
the death of her husband. Hopefully this will send a message to other managed
care plans that they, too, are accountable for their actions, and will prevent
any more such tragedies.
With no unexpected increases in premiums and a
growth of managed care plans entering the market, Texas has proven that
responsible public policy protecting patients from irresponsible managed care
plans is possible.
LOAD-DATE: June 25, 1999