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Copyright 1999 Federal News Service, Inc.  
Federal News Service



LENGTH: 1838 words



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 negligent
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 Necessity Determinations
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
3) 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.
The Texas 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

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