In their battle against climbing health-care costs, medical insurers have increasingly turned to "utilization review" as a means of defining necessary and unnecessary treatments.
The process is coming under fire because of the way the reviews are done and because no Maryland agency has the power to review these decisions, which often involve crucial medical questions.
While there are some regulations governing utilization review, they are inadequate, says Del. Joan Pitkin, D-Prince George's, chair of a subcommittee of the House Environmental Matters Committee, which is studying the issue. "We have to put some teeth in the law" to protect consumers, she says.
Often relying on statistical information, utilization-review firms that work for insurance companies examine a prescribed treatment and then decide whether the insurance company will pay for it. The firms usually have an internal appeals process to allow patients or medical providers to challenge their judgments.
These decisions on what the insurance company will pay can come before, during or even after the disputed treatment is provided. This has led to some cases in which patients are left with large medical bills that the insurance company refuses to pay.
In Maryland, neither the state Insurance Division nor the Department of Health and Mental Hygiene has the authority to determine whether treatment is medically necessary.
While the Insurance Division has clear authority over consumer complaints about policy violations, the agency does not decide what is appropriate care.
"That is where we get doctors arguing with doctors," says Philip L. Wickenden, associate commissioner in the Maryland Insurance Division. "We will not put ourselves in the position of making a medical judgment," he says.
However, when the division does receive such cases, it attempts to mediate the dispute and do some "jawboning," Wickenden says. A hearing may also be called, but it will end in a stalemate if the issues are strictly over medical necessity, he says.
When the agency reaches a dead end, the matter is referred to the Department of Health and Mental Hygiene, Wickenden says. He recalls directing six such cases to the department in the last year.
However, the Department of Health and Mental Hygiene ultimately has no authority to decide such cases. "We do not get involved in determinations of medical necessity," says Carol Benner, acting director of licensing and certification for the department. "There is no external arbitration," she says.
Since 1988, utilization-review companies have had to be certified to operate in Maryland. To qualify, the firm has to submit examples of its criteria to the department or cite national standards, Benner says. It must also have "sufficient numbers of qualified personnel" to carry out the review process, she says.
However, there are no regulations detailing what qualifications are necessary. In many cases, the reviews are done by registered nurses, but they could be done by a person with less training, such as a records technician, Benner says. Yet, most of the review agencies have physicians backing up their examiners, she says.
Maryland Citizen Action Coalition, a consumer group, would like to see a clear chain of appeal, handled either by the Insurance Division or Health and Mental Hygiene. "This is an issue that has not been satisfactorily resolved," says Albert P. Cohen, a board member of Citizen Action and the spokesman for the group on this issue.
"There has to be a clear channel of responsibility," he says. "Otherwise, you get this fast shuffle."
But the prospect of a government agency reviewing decisions is strongly opposed by health insurers and utilization-review companies. "It would be a real concern to us," says Stephen N. Lamb, director of state affairs for the American Managed Care and Review Association.
Lamb says other states are also considering such review processes, and if they are enacted the utilization-review companies would be confronted by a maze of different regulations. "I would be concerned about creating another state bureaucracy," he says.
A better alternative, according to Lamb, is for the utilization-review companies to be accredited by the recently formed Utilization Review Accreditation Commission, which has developed a set of standards. "URAC is the best way to assure industry standards," he says.
The state legislature is studying the possibility of an appeals process. "It's one of the most difficult questions this work group will examine," says Pitkin.
So far, only a handful of states have appeal processes for utiliza
tion-review decisions and most of those are limited to drug and alcohol treatment.
Pitkin says one possible solution would be for an independent company to handle such appeals, with the loser paying the costs. "It has to be timely and cost-neutral," she says.
A less controversial issue is the filing of more specific criteria with the Department of Health and Mental Hygiene. At a meeting Tuesday, the subcommittee voted to draft legislation requiring such a filing.
Some review organizations object to filing their criteria, saying it is proprietary information and would allow the health-care providers to circumvent the system. "It is an individual decision that is best left to each firm," Lamb says.