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Spine surgery faces utilization management challenges that are influencing patients’ access to care and surgeons’ abilities to navigate the current payor environment.
In Part I of this overview, I discussed prior authorization in general. In this second article, I will further delineate what surgeons are experiencing with two specific, important issues, both of which significantly impact patient access: commercial health plans not allowing prior authorization in certain circumstances, and an appeals process that is increasingly skewed toward the health plans.
Device companies can better serve surgeons and their patients by remaining abreast of changes to the payor climate.
Commercial Health Plans Prohibit Prior Authorization
There are two distinct issues at play with prior authorization. The first is with regard to site of service. Many health plans do not allow prior authorization for outpatient services. While prior authorization is not always warranted and is certainly not a guarantee of payment, for many procedures it is an essential first step in getting to successful payment, especially when the procedure is newer or when medical necessity may be questioned. In addition, as I will discuss later in this article, without prior authorization, it is more difficult to appeal a denial, either pre- or post-service. As more and more health plans direct procedures to the outpatient setting (for cost savings and/or to avoid prior authorization) and as more procedures are conducted in the outpatient setting, this could ultimately lead to further payment and appeal challenges. Prior authorization is currently being debated at the federal congressional level, meaning that this issue is definitely one to keep track of in the next legislative session.
The second issue is with regard to procedures that include FDA-approved products deemed to be “experimental/investigational (E/I)” by commercial health plans. There are at least 15 major health plans that will not allow a prior authorization (in any site of service) for an E/I procedure. Some of these plans will conduct a “courtesy” review, if pressed, but contend that non-covered procedures do not warrant prior authorization. This creates the obvious challenge of patients being unable to proceed with such procedures until they are deemed to be covered in medical policy, which often takes years. This also creates a less apparent but more intractable challenge in the following way: the Affordable Care Act (ACA) mandated that patients have a right to an external review by an independent review organization (IRO) for any denied prior authorization; however, in order for a patient to file a request for a pre-service external review, a written denial of the prior authorization must be received from the payor. Without a prior authorization, that is patently not possible. Patients are, therefore, de facto, denied their right to an external appeal as a result of this process.
Appeals Process Causes Frustration
Related to this second issue cited above, there are significant challenges with internal appeals by the commercial health plans, as well as external reviews by the IROs.
In the case of internal appeals, the typical process is for at least one level of review (sometimes up to three). In discussions with physicians and as I noted in Part I of this article, there is a significant amount of frustration with this process, primarily because denials often occur immediately upon prior authorization submission, even when the procedure is considered to be medically necessary.
Assuming that an internal appeal is not successful, the next step is for a patient to request an external review. Although this right was codified in the ACA, most patients (and many physicians) are not aware that it even exists. In theory, this process is intended to protect health care consumers by offering an independent review of a health plan’s “adverse determination” of coverage of a requested service, whether it is denied for medical necessity or because the procedure is deemed to be experimental/investigational.
Evaluating E/I procedures more closely, IROs are expected to, according to the National Association of Insurance Commissioner’s “Uniform Health Carrier External Review Model Act, Section 1(5)” follow a “legal framework, which considers several factors.”
The Model Act specifies that “IROs and their clinical reviewers assess two factors:
- FDA approval. Clinical reviewers assess whether the recommended service or treatment has been approved by FDA for the patient’s condition.
- Evidence-based standards and/or medical or scientific evidence. Also, clinical reviewers will study the evidence to see if “the expected benefits of the recommended or requested health care service or treatment is more likely than not to be beneficial to the covered person than any available standard health care services or treatment and the adverse risks of the recommended or requested health care service or treatment would not be substantially increased over those of available standard health care services or treatments.” ” (National Association of Independent Review Organizations position paper, “Providing Leading Assessments of Experimental and Investigational (E/I) Treatments”)
The majority of the time, this review process appears to be both independent and effective. I recently conducted a review of six different medical procedures considered to be E/I and found that, on average, almost half of patient cases appealed to an IRO were approved. However, there are a few glaring exceptions. A number of IROs that are national in scope and contracted by many commercial health plans for the external appeal process have been consistently “rubber-stamping” the internal appeal denials, leading to an almost 100% denial rate. In their denials, they refer back to the negative medical policy as the reason for denial, rather than focusing on the two factors specified above as the purview of the independent reviewer. Whether this violates the actual “letter of the law” is to be determined, but it clearly erodes the integrity of an important and codified protection afforded to patients.
Industry and Surgeons Must Rally Around Issue
Each of these issues, taken as a whole and evaluated through the lens of both the physician and the patient, share one common theme—denial for the sake of saving money and/or delaying treatment. Dr. Richard Wohns summarized the impact of this well in a recent interview for Becker’s Spine Review (11/26/19):
“Putting off the inevitable increases the cost of healthcare. Stated in another way, every time the insurance companies deny necessary spine care presumably thinking that they are saving money, they are actually costing the healthcare system more as degenerative spinal pathology worsens with time, causes more disability, causes more use of opioids, causes more time loss at work, and when the condition worsens and the patient needs care with a more advanced spinal problem, the actual cost of the surgery is greater. Insurance denials for medically necessary spine surgery brings on the law of unexpected consequences. In their concerted effort to withhold resources for necessary interventions, i.e., saving present day dollars, they will end up increasing healthcare expenditure in the future.”
There are a number of ways that both surgeons and patients can engage around all of these challenges, including but certainly not limited to contacting the following organizations with specific examples and cases:
- Medical specialty societies (e.g., NASS, AANS, AAOS, etc.)
- Congressional representatives
- State insurance commissioners, including the National Association of Insurance Commissioners (NAIC)
- Medicare’s Center for Consumer Information & Insurance Oversight (CCIIO)
- National Association of Independent Review Organizations (NAIRO)
- URAC (health plan and IRO accreditation)
It is essential for surgeons and the societies representing them, for trade associations, for patients and for the medical device industry to stay engaged on these issues, to continue to shine a spotlight on any inappropriate utilization management methods, and to fight back when patient access to appropriate treatment is compromised.
Spine surgery faces utilization management challenges that are influencing patients’ access to care and surgeons’ abilities to navigate the current payor environment.
In Part I of this overview, I discussed prior authorization in general. In this second article, I will further delineate what surgeons are experiencing with two specific, important...
Spine surgery faces utilization management challenges that are influencing patients’ access to care and surgeons’ abilities to navigate the current payor environment.
In Part I of this overview, I discussed prior authorization in general. In this second article, I will further delineate what surgeons are experiencing with two specific, important issues, both of which significantly impact patient access: commercial health plans not allowing prior authorization in certain circumstances, and an appeals process that is increasingly skewed toward the health plans.
Device companies can better serve surgeons and their patients by remaining abreast of changes to the payor climate.
Commercial Health Plans Prohibit Prior Authorization
There are two distinct issues at play with prior authorization. The first is with regard to site of service. Many health plans do not allow prior authorization for outpatient services. While prior authorization is not always warranted and is certainly not a guarantee of payment, for many procedures it is an essential first step in getting to successful payment, especially when the procedure is newer or when medical necessity may be questioned. In addition, as I will discuss later in this article, without prior authorization, it is more difficult to appeal a denial, either pre- or post-service. As more and more health plans direct procedures to the outpatient setting (for cost savings and/or to avoid prior authorization) and as more procedures are conducted in the outpatient setting, this could ultimately lead to further payment and appeal challenges. Prior authorization is currently being debated at the federal congressional level, meaning that this issue is definitely one to keep track of in the next legislative session.
The second issue is with regard to procedures that include FDA-approved products deemed to be “experimental/investigational (E/I)” by commercial health plans. There are at least 15 major health plans that will not allow a prior authorization (in any site of service) for an E/I procedure. Some of these plans will conduct a “courtesy” review, if pressed, but contend that non-covered procedures do not warrant prior authorization. This creates the obvious challenge of patients being unable to proceed with such procedures until they are deemed to be covered in medical policy, which often takes years. This also creates a less apparent but more intractable challenge in the following way: the Affordable Care Act (ACA) mandated that patients have a right to an external review by an independent review organization (IRO) for any denied prior authorization; however, in order for a patient to file a request for a pre-service external review, a written denial of the prior authorization must be received from the payor. Without a prior authorization, that is patently not possible. Patients are, therefore, de facto, denied their right to an external appeal as a result of this process.
Appeals Process Causes Frustration
Related to this second issue cited above, there are significant challenges with internal appeals by the commercial health plans, as well as external reviews by the IROs.
In the case of internal appeals, the typical process is for at least one level of review (sometimes up to three). In discussions with physicians and as I noted in Part I of this article, there is a significant amount of frustration with this process, primarily because denials often occur immediately upon prior authorization submission, even when the procedure is considered to be medically necessary.
Assuming that an internal appeal is not successful, the next step is for a patient to request an external review. Although this right was codified in the ACA, most patients (and many physicians) are not aware that it even exists. In theory, this process is intended to protect health care consumers by offering an independent review of a health plan’s “adverse determination” of coverage of a requested service, whether it is denied for medical necessity or because the procedure is deemed to be experimental/investigational.
Evaluating E/I procedures more closely, IROs are expected to, according to the National Association of Insurance Commissioner’s “Uniform Health Carrier External Review Model Act, Section 1(5)” follow a “legal framework, which considers several factors.”
The Model Act specifies that “IROs and their clinical reviewers assess two factors:
- FDA approval. Clinical reviewers assess whether the recommended service or treatment has been approved by FDA for the patient’s condition.
- Evidence-based standards and/or medical or scientific evidence. Also, clinical reviewers will study the evidence to see if “the expected benefits of the recommended or requested health care service or treatment is more likely than not to be beneficial to the covered person than any available standard health care services or treatment and the adverse risks of the recommended or requested health care service or treatment would not be substantially increased over those of available standard health care services or treatments.” ” (National Association of Independent Review Organizations position paper, “Providing Leading Assessments of Experimental and Investigational (E/I) Treatments”)
The majority of the time, this review process appears to be both independent and effective. I recently conducted a review of six different medical procedures considered to be E/I and found that, on average, almost half of patient cases appealed to an IRO were approved. However, there are a few glaring exceptions. A number of IROs that are national in scope and contracted by many commercial health plans for the external appeal process have been consistently “rubber-stamping” the internal appeal denials, leading to an almost 100% denial rate. In their denials, they refer back to the negative medical policy as the reason for denial, rather than focusing on the two factors specified above as the purview of the independent reviewer. Whether this violates the actual “letter of the law” is to be determined, but it clearly erodes the integrity of an important and codified protection afforded to patients.
Industry and Surgeons Must Rally Around Issue
Each of these issues, taken as a whole and evaluated through the lens of both the physician and the patient, share one common theme—denial for the sake of saving money and/or delaying treatment. Dr. Richard Wohns summarized the impact of this well in a recent interview for Becker’s Spine Review (11/26/19):
“Putting off the inevitable increases the cost of healthcare. Stated in another way, every time the insurance companies deny necessary spine care presumably thinking that they are saving money, they are actually costing the healthcare system more as degenerative spinal pathology worsens with time, causes more disability, causes more use of opioids, causes more time loss at work, and when the condition worsens and the patient needs care with a more advanced spinal problem, the actual cost of the surgery is greater. Insurance denials for medically necessary spine surgery brings on the law of unexpected consequences. In their concerted effort to withhold resources for necessary interventions, i.e., saving present day dollars, they will end up increasing healthcare expenditure in the future.”
There are a number of ways that both surgeons and patients can engage around all of these challenges, including but certainly not limited to contacting the following organizations with specific examples and cases:
- Medical specialty societies (e.g., NASS, AANS, AAOS, etc.)
- Congressional representatives
- State insurance commissioners, including the National Association of Insurance Commissioners (NAIC)
- Medicare’s Center for Consumer Information & Insurance Oversight (CCIIO)
- National Association of Independent Review Organizations (NAIRO)
- URAC (health plan and IRO accreditation)
It is essential for surgeons and the societies representing them, for trade associations, for patients and for the medical device industry to stay engaged on these issues, to continue to shine a spotlight on any inappropriate utilization management methods, and to fight back when patient access to appropriate treatment is compromised.
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Kim Norton is Vice President of Reimbursement, Simplify Medical and Reimbursement Consultant, has worked in medical device reimbursement, payor relations and market access for over 25 years. Her career spans venture-backed start-up companies, mid-sized and large device companies, and roles in consulting. Ms. Norton has worked across the spectrum of health plans, from CMS to commercial plans to Workers Compensation and has primarily focused on implantable Class III devices.
