April 1999 Bulletin

New issue in old fight

Insurers battle 'medical necessity'

It would seem fairly logical that doctors decide when a treatment is medically necessary, but not in the view of managed care organizations and business groups.

They've declared war on the language in several pending managed care regulation bills in Congress that would prohibit health plans from ". . .arbitrarily interfering with or altering the decisions of a treating physician regarding the manner or setting in which particular services are delivered if the services are medically necessary or appropriate for treatment or diagnosis." The "Patients' Bill of Rights," introduced by Democrats in the House and Senate, and the bipartisan Senate bill, "The Promoting Responsible Managed Care Act," define the term "medically necessary"as ". . .a service or benefit which is consistent with generally accepted principles of professional medical practice."

This would "turn back the clock on efforts to improve quality," said Karen Ignani, president of the American Association of Health Plans (AAHP). In more dramatic terms, some opponents say it would spell the end of managed care.

Backers of the bills say the provisions would ensure that health plans don't overrule doctors' decisions because of cost considerations. It would also provide an objective standard that could be used by independent review panels set up to examine denials of care. Democrats say it would ensure a strong independent review process. Washington insiders say Republicans have bought into the "medically necessary" idea to counter demands for more HMO liability.

AAHP also has thrown its support for independent review panels to deflect legislation that gives patients the right to sue HMOs. AAHP is urging members to voluntarily let patients who are denied care appeal to outside panels of experts. The organization also endorsed a set of principles for Congress to use in designing an external review process.

With a half dozen managed care bills in Congress and more on the way, there are enough trial balloons in the air over Washington, D.C. to menace air traffic. Republicans are talking about breaking managed care legislation into widely supported pieces-a ban on "gag" clauses, emergency room coverage, etc.-and pushing that through on a piecemeal basis. The concept seems to have the support of the new House Speaker Dennis Hastert (R-Ill.) Another idea is to junk all the proposed legislation and push for a strong appeals process that would protect the public.

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