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]]]]]]]]]]] HEALTH CARE RATIONING THROUGH INCONVENIENCE [[[[[[[
The Third Party's Secret weapon. (1/5/90)
By GERALD W. GRUMET, M.D.
Kindly uploaded by T.A. Dorman, M.D.
(Freeman 93401DORM)
[This file had several typographical errors, presumably because of
transmission errors. I have repaired those I saw. In addition, the
footnote references were unbracketed. I have modified those. There is
a good possibility there are still errors, as I did all this quickly.
-- Bob Long]
Many strategies for the containment of medical costs have emerged from
systems of managed care gatekeeping by a primary care physician, prior
authorization and utilization review, assumption of financial risk
through capitation payments to the pro vider with financial
disincentives for hospitalization or referral to specialists, and so
forth. But another feature has crept into the managed care formula and
has been largely overlooked: that of slowing and controlling the use
of services and payment for services by impeding, inconveniencing, and
confusing providers and consumers alike. In managed care's arsenal of
cost-control weaponry, probably none is more potent except for
restricting hospital admission than superseding the physician's
autonomy by a managerial review process in which armies of claims
clerks, administrators, auditors, form processors, peer reviewers,
functionaries, and technocrats of every description insinuate
themselves into a complex system that authorizes, delivers, and pays
for medical service.
Paradoxically, the savings that ordinarily accrue to an efficiently
managed business are reversed in the case of insurance carriers, whose
bungling, confusion, and delay impede the outflow of funds. For
carriers, inefficiency is profitable. The result is a mounting number
of dysfunctional bureaucracies with eye- catching logos and slick
marketing techniques that contrast sharply with the difficulties
encountered each time medical services are used. Such problems are not
the exclusive province of managed care systems but are found as well
in other third party carriers, especially those that are
governmentally based and use public funds. Some of the mechanisms used
by carriers to impede the delivery process are examined here.
PROCEDURAL COMPLEXITY.
The unnecessary elaboration of simple procedures may explain in part
why each visit to a physician's office is estimated to generate 10
pieces of paper. Take, for example, the procedure required to obtain a
nebulizer through the New York State Medicaid program:
When physicians or clinics write a iiscal order for this appliance,
they are required to complete their portion of a prior authorization
form #3706, for the item ordered, along with the requested recipient
information. The ordering provider will retain one copy of the form
and the recipient will present the remaining three copies to the
dispensing provider of their choice. The dispensing provider will
retain one copy of the order and forward the remaining two parts of
the form to the New York State Department of Social Services. The
Bureau of MMIS [Medical Management Information System] will review the
request and return to the dispensing provider a copy of the document
with an assigned prior authorization number. That prior authorization
number must he entered on the MMIS claim form. [2]
The complexity of this particular Medicaid system is reflected in the
huge procedure manuals sent to physicians: the instructions for filing
a one page billing form run for I 35 pages, followed by 260 pages of
procedural codes.[3] But New York is not alone. Former Governor Richard
Riley of South Carolina has reported that his state once required
pregnant women to fill out a 43 page questionnaire to gain eligibility
for Medicaid.[4] Nor can the word "simplicity" be found in the Medicare
lexicon. The tendency of the federal Medicare program to complicate
the simple is evident in this excerpt from a "general information"
message accompanying a benefit statement:
Where the hospital collects the charges in full and the intermediary
later finds the deductibles were fully or partially met, you will
receive payment, along with this notice, for 80% of the paid hospital
in excess of the cash deductible and any charges for the Part B blood
deductible.
The marriage of the federal military and medical bureaucracies is seen
in the "CHAMPUS/ CHAMPVA [Civilian Health and Medical Program of the
Uniformed Services/Civilian Health and Medical Program of the Veterans
Administration] UB82/HCT-A-l450" claim form for hospital services,
which manages to include 96 "form locator" items on a single billing
sheet.
The hindering effects of procedural complexity are reflected in the
statistics of those denied Medicaid or welfare: 59.7 percent of the
denials occurred because of problems with paperwork or documentatton,
whereas only 21.4 percent occurred because of excess income.[5]
EXOTIC TERMS.
Some carriers create a unique or exotic system of procedures, terms,
codes, or acronyms, fostering a sense of alienation and unfamiliarity
with the insurance plan and its benefits. Sociologist Max Weber, who
popularized the concept of bureaucracy, noted that professional
bureaucrats attempt to maintain their power and superiority over the
general public by keeping secret their motives and technical
expertise. This tendency can be seen in the rarefied terminology of
insurance planners "corridor deductibles," "disbursed self funded
plans," "cost offset effects," "per cause plans," and so forth as well
as in the alphabet soup of acronyms and buzzwords confected by managed
care insurers. Besides the familiar HMCs (health maintenance
organizations) and PPCs (preferred provider organizations), there are
many hybrid and derivative terms, such as "swing PPOs," "HMO leaks,"
"HPOs" (hospital provider organizations), and "CPUs" (combined
provider units). These are paralleled by an unending proliferation of
acronyms that often puzzle the uninitiated. Awkwardness poses no
barrier to such proliferation, as reflected in the CHAMPUS Program for
the Handicapped (PFTH), New York Medicaid's Child Teen Health Program
(C/THP), or its Early Periodic Screening, Diagnosis, and Treatment
Program (EPSDT). These acronyms join other jargon "retrobilling,"
"claims processing edits," "multisource drugs," "magnetic media," to
become standard idiom in the health care system. Thus, Medicare's "DME
patrol" describes the effort to prevent duplicate billing for durable
medical equipment, and "MAAC monitoring" indicates an eflbrt to ensure
that providers do not exceed the maximal actual allowable charges. The
"final outcome" is an abstruse and enigmatic bit of jargon that
frequently puzzles all but the most thoroughly initiated. An item from
the champus News exemplifies this tendency: "When the Nonavailability
Statement is on file in the patient record at the hospital, a rubber
stamp indicating `DDl25l IS ON FILE' may be stamped on the claim form
(HCFA l500/CHAMPUS 501 or FORM 500) since, unlike the UB-82, there is
no item number convoluted billing procedures of Medicare and other
insurers, private companies have sprung up with workshops and seminars
to assist providers in coping with "carrier intimidation" and to
explain esoteric terms like "no pay," "desperation," or "junk" codes,
"carrier screens," "unbundling," and "blended rates."
SLOWDOWNS.
There are assorted techniques of slowing down the operations that lead
to the outflow of funds, including authorizations for care, processing
of claims, and responses to telephoned or written inquiries or
appeals. In Great Britain and to some extent Canada, slowdowns in care
delivery are the result of limitations in facilities, whereas in the
United States they are operational. By one recent count, 848,246
people were awaiting treatment in Britain's National Health Service,
where delays of three or four years for elective surgery are
commonplace.[6] Similarly, as recently as 1986 there was a wait of 8 to
l2 weeks for a CT scan in New Brunswick, and elective surgery often
involved a one or two year delay.[2] In the United States, slowdowns
focus on bureaucratic processes that restrain access to information,
delaying the communications required to authorize care or disburse
funds. Sometimes exchanges of information that could take a fraction
of a second take weeks.
The average U.S. hospital waited 67.9 days to receive Medicare
payments in I986, and 73.2 days in l987. By early 1988, the average
hospital had to wait 8l days for Medicare and other bills to be paid.[9]
Such delays have been used in the fiscal cosmetology of budget deficit
reduction: in July I 988, Medicare adopted a 10 day delay in sending
out its checks (extended to 14 days in October), deferring an
estimated $815 million of liability for 1988 into fiscal 1989. A
slowdown is seen likewise in the strenuous litigating, appealing, and
delaying tactics of the Department of Health and Human Services and
the Health Care Financing Administration as they attempt to thwart the
efforts of hospitals to collect contested Medicare fees; such tactics
sometimes hold up cases in court for as long as nine years.! Medicare
providers encounter shorter delays: one otolaryngologist reported that
half of his claims appeals were never answered, and those that were
answered were delayed an average of 93 days. Similarly, in early 1987
the state of Oklahoma was reported to have 400,000 unprocessed
Medicaid claims,2 whereas in Illinois delay in Medicaid payments led
to the closing of two Chicago hospitals and the bankruptcy of a
third.[3]
Among the 36 percent of 460 HMO enrollees who responded unfavorably to
a survey, many indicated that delays and impediments were a major
source of dissatisfaction. The complaints included being placed on
hold on the telephone for as long as 50 minutes and waiting as long as
four or five months for a physical examination under nonemergency
conditions.4 Among private carriers, the delaying techniques may
include the dubious practice of shifting a claims review into a
clinical review. A newsletter from Group Health Incorporated notes:
When submitting claims for a complete Pulmonary Function Study...
please attach a copy of the test results to the claim form and a
statement describing why this particular method was medically
indicated. This will facilitate handling and assure prompt and
accurate settlement of your claim.[15]
A potentially lethal form of delay is observed among some HMOs who
warn their patients that they must obtain authorization before using
an emergency department or ambulance, unless the situation is
lifethreatening, or the bill will not be paid. This places patients in
the predicament of having to decide whether or not they are dying.
Three critically ill patients in Milwaukee nearly lost their lives
because of the delays of HMO triage, which circumvented the highly
effective emergency medical system of that city.
SHIFTING OF PROCEDURES
Some third party agencies shift their procedures,
codes, forms, or policies frequently, leaving providers unable to
systematize their operations for maximal efficiency. In sharp contrast
to the rigid procedures typical of older, entrenched bureaucracies,
modern health carriers typically maintain a state of kinetic chaos by
frequent mailings of directories, brochures, newsletters, memos,
bulletins, benefit updates, and fee schedules. The situation is often
compounded by rapid turnover and efforts to resolve difficulties by
adding new layers of bureaucracy or shifting organizational
responsibility. When Preferred Care, an independent practice
associationQmodel HMO in Rochester, New York, had problems with
providers' claims, a newsletter announced that a new Provider Services
Unit, formerly part of the Provider Relations Department, had been
created within the Claims Administration Department, headed by the
Policy and Project Administrator, and staffed by Provider Service
Representatives, to deal with these issues.
On a national scale, widespread chaos can result when changes are
imposed with inadequate time to adapt. When the Health Care Financing
Administration approved a new Medicare coding system for U.S.
hospitals on September 1, 1987, even the most sophisticated hospital
systems were left scrambling to minimize the economic damage.
According to one estimate, the new system called for 375,000 changes
to be made within one month in codes for diagnosis related groups.[7]
The difficulties encountered by providers in coping with changes by
carriers were exemplified by the need for CHAMPUS Transition Workshops
throughout the northeastern United States when the CHAMPUS program was
shifted from a carrier in Rhode Island to one in Indiana.
FAILSAFE PAYMENT SYSTEMS.
The computer programs and protocols of third party payers have a
strong tilt toward inhibition when approving claims. As with the fail
safe system for launching nuclear weapons, any one of a large number
of negative conditions can restrain the system, but a long and
unbroken sequence of positive conditions is required for its
operation. Within the insurance organization's claims processing
mechanism, one envisions multiple subsystem circuit loops able to
inhibit the claim for any of a myriad of minor errors, such as a one
letter misspelling of a name. Simple human events Q a change in
address, employment, or marital status, or the substitution for a
vacationing physician by a colleague will trip the system to a halt.
Usually no one takes personal responsibility for an "adverse
determination,S which is typically ascribed to "fixed policy," a
"committee decision,S or "computer error."
OVERLAPPIN6 COVERAGE
Warring between carriers may occur in cases of overlapping coverage.
An obvious example is the client who is covered for mental illness by
carrier A and for substance abuse by carrier B. If such a client were
admitted to a hospital in a depressed and drunken state, carrier A
might refuse payment because "alcoholism was involved," whereas
carrier B might note that "the primary diagnosis was depression." An
example of boundary blurring in the obligations acknowledged by
carriers is seen in the CHAMPUS program: the surgical care of a
temporomandibular joint problem is handled by one carrier, whereas the
application of an occlusal splint to stabilize the joint is considered
dental care and directed to a second carrier. Efforts by CHAMPUS to
clarify this boundary lead to a pirouette of confusion:
Adjunctive dental care is that dental care which is medically neces
sary in the treatment of an otherwise covered medical (not dental)
condition, is an integral part of the treatment of such medical
condition and is essential to the control of the primary medical
condition; or which is the result of dental trauma caused by medically
necessary treatment of an injury or disease. Adjunctive dental care
requires prior approval and written preauthorization from the Dental
Fiscal Intermediary. Where adjunctive dental care involves a medical
(not dental) emergency, preauthorization is waived.
FRAGMENTATION OF TRANSACTIONS
Many health care transactions are divided or disassembled into
multiple parts, complicating and slowing operations. An example
familiar to Medicaid providers in New York State is the submission of
a claim for perhaps seven charges on a single billing form, of which
three charges are paid, two are "pended,S one is submitted for "manual
review,S and one is lost. Another example of such fragmentation, often
observed within the collective evasiveness and anonymity of
bureaucracy, is the predicament of the provider who must scurry around
for answers within a multipartite insurance organization, calling the
Claims Department, the Member Services Department, the Provider
Relations Department, the Continuing Care Department, and so forth.
Fragmentation is also exemplified by the tendency of many carriers to
subdivide levels of service into "minimal," "brief" "limited,"
"intermediate," "extended," "comprehensive," provided to a "new" as
compared with an "established" patient in the setting of "hospital,"
"office," or "nursing home" even though all these services rest on the
single variable of professional time.
UNCERTAINTY OF COVERAGE
Many carriers have a tendency to keep the care giver and the care
recipient on tenterhooks with regard to authorization and payment for
care. This is seen commonly in the delivery of psychiatric services,
an area in which behavioral and emotional factors exert a powerful
influence on one's willingness to treat or be treated. If a patient is
highly apprehensive about a carrier's willingness to pay a medical
bill or if the patient's physician harbors a high level of similar
uncertainty, the provision of inpatient or outpatient care may become
tentative. The problem is exacerbated by concurrent reviewers, who
sometimes parcel out a series of 72 hour approvals for hospital
psychiatric care, inconveniencing the physician and maintaining an
unsettled climate. This may happen regardless of the clinical
situation Q even at the start of a course of electroconvulsive therapy
that requires two to three weeks of inpatient care.
The same phenomenon is seen with regard to telephone authorizations
for care in which written confirmations are promised but slow in
arriving. When the written approval does arrive, it too may be
tentative and accompanied by disclaimers, such as these included in
the Equicor Equitable "Par Services" authorizations:
"PAR authorization does not guarantee payment." "Benefits are subject
to eligibility at the time of service and must be verified
separately." The proposed treatment/surgery may not be covered by the
patient's benefit plan. The PAR authorization only verifies that a
hospital stay is medically necessary. You must contact the benefit
office/claims payer to discuss what benefits will be paid......
Similar phenomena are apparent in the rise in Medicare denials of
payment for home care services up from 1.2 percent in 1983 to 6.0
percent in 1986. The ambiguity of definitions of crucial words such as
"homebound" and the unpredictability of Medicare payments are given as
reasons for the growing hesitancy of many agencies to accept Medicare
patients.[9] The same is true for the retrospective denials of payment
to hospitalized Medicare and Medicaid patients who do not fulfill
review criteria.
A new, special form of uncertainty arises from the investigations of
billing errors by physicians or alleged fraud in the treatment of
Medicare and Medicaid patients. The Committee on Government Health
Programs of the New York State Psychiatric Association has learned
that Medicaid investigators posing as patients are furnished with
hidden recording devices to tape psychotherapy sessions, in order to
compare the actual length of the session with the length of treatment
reported on the bill. A former fraud investigator for the Department
of Health and Human Services has said that to the "Medicops" there is
no such thing as "an honest mistake."[20]
EMERGING TRENDS AND DANGERS
Although there are few statistics to document the numbers of patients
deterred from seeking care or the numbers of physicians discouraged
from offering it, a discernible pattern of restraint is emerging in
various sectors of the health care system. There is a frequent
impression that HMO patients sometimes believe their physicians to be
less interested and less respon sive than fee for service doctors.[21]
During an 18 month period, a survey of 245 California patients found
that those who subscribed to a prepaid insurance plan became
disenchanted with the level of access to care, as compared with fee
for service patients who saw the same doctors.[22] Reduced access to care
because of financial barriers or the unavailability of medical
resources within the community has a disproportionate effect on poor
people, who may lack the sophistication, mobility, or assertiveness to
secure the care they require. Such persons make fewer uninsured visits
to hospitals or public health clinics if Medicaid insured visits to
local doctors are unavailable.[23] In California, physicians fought
strenuously against "punitive" audits and claims reviews of their
Medicaid (MediCal) patients; the ultimate outcome was often a reduced
willingness to continue treating indigent patients. One family
practitioner who located his ofice in a Los Angeles ghetto and
established a practice in which 98 percent of the patients were
indigent reduced his MediCal caseload to 30 percent after audits
forced him to mortgage his home to pay legal fees.[24]
The inspector general of the Department of Health and Human Services
imposed 466 sanctions for abuse of the Medicare and Medicaid programs
in the fiscal year 1988 a 1200 percent increase over the 39 sanctions
levied in 1981 But a curious contrast is seen when these statistics
are compared with those on the activities of the Provider
Reimbursement Review Board, which makes the initial review for large
Medi care providers who appeal decisions about reimbursement. In
fiscal 1984 this board adjudicated 683 cases. By 1988 the number of
decisions dwindled to 48, and by early 1989 its director estimated
that he had a backlog of 3000 unheard cases.[26] Even before Medi Care
cost containment initiatives reached Congress, a report of the
American Medical Association indicated that 22 percent of American
physicians had already cut their Medicare patient loads, stopped
taking new patients, performed fewer procedures, and discontinued
certain types of care.
Physicians are oriented toward advocacy of patients' interests and are
trained for clinical rather than economic decision making. Admittedly,
they have not been in the forefront of cost control efforts, but now
they must face a "second generation" of impediments to managed care
that promises further challenges to physicians' autonomy in medical
decision making. Carl Schramm, president of the Health Insurance
Association of America, which represents about 350 commercial
insurers, sees an expanded role for nurses in challenging the
judgments of physicians raising the specter of internecine conflict
between fellow professionals. Schramm says, "Many nurses have saved
people from death by second guessing physicians."[27]
American health care is now controlled haphazardly and is financed by
multiple cumbersome, poorly integrated bureaucracies in desperate need
of coordination, simplification, and streamlining. Perhaps the
emerging Joint Commission on Accreditation of Healthcare Organizations
can play a part by rewarding insurers who simplify and streamline
operations, and by penalizing obstructive carriers. The methods of
medical cost containment that we choose to invoke must be rational,
explicit, equitable, and free of ambiguity, deception, or harassment.
References:-
1. WoN 5. The medical industrial complex. New York: Harmony
Books, 1984.
2. Noonan BJ. Letter no. 880781 to N.Y. State Medicaid providers,
Albany. N.Y., 1988.
3. Medical management information system provider manual Q
physicians. Albany, N.Y.: Computer Science Corporation, 1988.
4. Richmond I. Comments made on the MacNeil/Lehrer Newshour,
Septemher 21, 1988. New York: WNET, 1988.
5. Tolchin M. Many rejected for welfare aid over paperwoik. New
York Times. October 29, 1988:1.
6. Hazper T. It Britain scrapping the National Health Service?
Med lttcon 1988; 65(July 18):23-6.
7. Robertson D. Is Canadian health care really such a great
bargain? Med lIcon 1988; 65(1anuarv l8):l7l-8.
8. Hospitals report slower Medicare reimbursement. Mod Healthcare
1988; l8(25):60.
9. Hospitals report modest rise in uncollectible bills. Mod
Healthcare 1988; 18(37): 104.
l0. Burda D. HHS antics trying courts' patience. Mod Healthcare
1988; l8(36):65-6.
11. watts ID. Mandatory assignment would ltill our practice. Med
lttcon 1988; 65(July 18):7080.
12. Lutz 5. `Automated Medicaid claims processing system creating
a backlog of hospital bills.' Mod Healthcare 1987; 17(10):93.
13. Bell Cw. Stop the shenanigans. Mod Healthcare. 1988; 18(24):
16.
14. Cohn v. HM0 members share their feelings. Washington Post
(Health Supplement). November lO, 1987:9-11.
IS. Gmup Health Incorporated. l'rofessional News and Notes. Dec.
1987:4.
16. Kerr HD. Prehospital emergency services and health maintenance
organizations. Ann Emerg Med 1986; 15:727-9.
17. Gardner E. Coding changes delay reimbursement. Mod Healthcare
1987; 17(25):11.
18. Blue Cross & Blue Shield of Rhode island. Charipus News.
January 1988.
19. Lutz S. Home health denials prompting mergers, reductions in
services to Medicare patients. Mod Healthcari, 1987; 17(23):l19, 122.
20. Starks S. To the Medicops, there are no honest mistakes. Med
lttcon 1988; 65(luly 4):52-7.
21. Meehanic D. Cost containment and the quality of medical care:
rationing strategies in an era of constrained resources. Milbank Mem
Fund Q 1985; 63:453-75.
22. Murray Il'. A follow-up comparison of patient satisfaction
among prepald and fee-for-service patients. I Farm l'ract 1988;
26:576-81.
23. Blendon RI, Aiken LH. Freeman HE, Kirluiian-Liif BL, Murphy
JW. Un- compensated care by hospitals or public insurance for the
loor: docs it make a difference? N Engl I Med 1986; 314:1160-3.
24. Holoweiko M. These doctors turned the tables on Medicaid
auditors. Med ltcon 1987; 64(Iuoc 27):62-8. 72-80.
25. Recoid number of sanctions levied in Medicare program. Medical
Worid News. February 27, 1989:24.
26. Holthaus D. First step in Medicare appeal can be a long one.
Hospitals 1989; 63(May 5):40-2.
27. Schrar'un CI. insurance companies to intensify claims review.
Hospitals 1988; 63(December 5):58-9.
From The New Eng;land Journal of Medicine Aug 31 1989. Vol 321. pp606-
611.
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