HMOs criticized at hearing for denial of care Hospital group chief calls decisions 'arbitrary'

Health care

June 19, 1998|By M. William Salganik | M. William Salganik,SUN STAFF

HMOs are denying medical care and claims based on applying guidelines "arbitrarily and overly stringently," the president of the Maryland Hospital Association told the state's insurance commissioner yesterday.

Calvin M. Pierson, the association president, said at an Annapolis hearing that delays and denials had pushed receivables at the state's 50 hospitals to $1.2 billion, about 25 percent of total hospital revenue.

Pam Kasemeyer, a lobbyist for the state medical society, said, "The trend we're seeing is that utilization review has become so rigid and so mechanical as to almost become a method to deny care or deny access."

Robert Enten, a lobbyist for the Maryland Association of Health Maintenance Organizations, said HMOs have been required to review care since 1985, when the state concluded that "unnecessary and medically inappropriate care" was a key to "spiraling health care costs."

John A. Picciotto, executive vice president and general counsel of CareFirst Inc., the holding company for the Maryland and District of Columbia Blue Cross plans, said review by insurers to determine whether care is medically necessary is "the right thing for our subscribers and the right thing for the hospitals."

The argument between payers and caregivers was renewed at yesterday's hearing, which was conducted by state Insurance Commissioner Steven B. Larsen. The legislature directed Larsen this year to conduct a study of "utilization review" practices, the process HMOs use to decide whether to authorize care and whether to pay claims.

Larsen is also reviewing complaints from the hospital association alleging improper denials. Some of those denials were based on whether the care was medically necessary -- the decisions that come out of utilization review -- and others were based on administrative questions, such as whether the claims were filed on time.

Larsen said he hopes to resolve some of the complaints in 30 to 45 days. He is also developing plans for broader "market-conduct studies" of the practices of the two health plans that enroll the most Marylanders, Blue Cross and Blue Shield of Maryland and Mid Atlantic Medical Services Inc.

His report on utilization review is due Dec. 1, and yesterday's hearing was the first step.

Much of the three-hour session was devoted to explanations from HMOs of how they review cases. Enten said HMOs do pre-authorizations, approving care before it is given; "concurrent review," in which nurses, sometimes based in hospitals, keep track of patient care day by day; and retrospective review, studying medical records after care is given.

At each point, he said, nurses review cases to determine whether they fit within guidelines developed by consulting and actuarial firms. If they do, he said, care is approved; if not, they are referred to physicians working for the HMO to determine whether an exception is warranted.

Hospital witnesses, such as Debora Kuchka-Craig, vice president for managed care of the five-hospital Helix Health system, said members of HMO utilization review staffs apply guidelines inconsistently and provide little explanation for their decisions beyond form letters saying care is not medically necessary.

Pub Date: 6/19/98

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