NCQA’s call for voluntary external oversight panels may upstage legislative push
NCQA’s call for voluntary external oversight panels may upstage legislative push for mandatory review
More than 75% of nation’s HMO subscribers participate in NCQA-accredited plans
Legislative proposals related to external review of medical or coverage determinations by managed care organizations currently are pending in 27 states. But a draft proposal released on March 16 by the Washington, DC-based National Committee for Quality Assurance (NCQA), which accredits about half of the nation’s HMOs, could set the standard for external reviews related to medical appropriateness.
"NCQA sets a high bar for any health plan that wants to distinguish itself from the pack on quality," says Alan Hoops, chief executive officer of Pacificare Health Systems in Santa Ana, CA. "The new Accredi tation 2000 requirements put the focus exactly where it should be: the consumer."
Four states—Alabama, Iowa, Ohio, and Tennessee—currently require NCQA accreditation of the managed care plans they purchase services from. Twelve states accept NCQA accreditation as a licensing standard. More than 75% of the nation’s HMO subscribers are enrolled in NCQA-accredited plans, with 315 plans either NCQA-accredited or awaiting accreditation.
If the NCQA standards go into effect as planned in July 2000, they will have tremendous weight when NCQA inspectors review and score HMO operations. Regardless of state laws governing external review, plans that fail to meet NCQA external review standards could be denied accreditation, which is considered a plum by many in the industry.
NCQA officials likely are hoping their proposal fares better than a recent National Association of Insurance Commis sioners (NAIC) attempt to develop a model law that states could use as a guidepost in developing their own external review legislation.
Alexandra Thomas, policy director for Maryland Insurance Commis sioner Steve Larsen, who chairs a NAIC working group on the issue, says the model law was on the fast track for approval until the group’s March meeting. However, members now have reconsidered the proposal. They are concerned that the model legislation would give state insurance commissioners near-total control over the external review process, as Maryland’s law does. Among other things, the legislation would have left it up to the commissioners to determine whether a claim was based on medical necessity and whether an independent review organization (IRO) decision should be left standing.
The NCQA’s Accreditation 2000 draft, which is expected to be completed in early June, would require NCQA-accredited plans or plans applying for NCQA accreditation to make available an independent external review process for medical appeals. IROs demonstrating appropriate medical expertise and administrative capability would be certified by NCQA or an as-yet-undetermined entity.
Under the proposal, the plan would require internal review programs to include evaluation by a specialist in the same or a similar specialty as the physician making the initial determination.
"External appeals should help restore consumer trust in managed care plans," says Andrew Webber, senior associate with the Washington, DC-based Consumer Coalition for Health Care Quality. "In an NCQA-accredited plan, consumers will be in a position to turn to an independent and expert appeals system when they feel that medically necessary services are being denied, reduced, or terminated."
But Mr. Webber, who served on the NCQA Standard Committee, which developed the plan, acknowledges that important details remain to be hammered out, including how and by whom IROs will be accredited.
For its part, the Washington, DC-based American Association of Health Plans (AAHP) in late February publicly called on its 1,000 member plans to adopt binding independent review programs that would allow patients to "quickly challenge health plan coverage decisions based on medical necessity." Says AAHP president and CEO Karen Ignagni, "Consumers want to resolve these disputes when they’re happening, and not months or years later."
Ms. Ignagni says adoption of binding independent review programs by association members would have a "profound effect" on improving consumer satisfaction and confidence nationwide.
Meanwhile, at press time, lawmakers in 27 states were debating proposals that would beef up existing state external review programs or create them where none currently exist.
Georgia lawmakers approved HB 732 in late March, which includes the Patient’s Right to Independent Review Act. The new law, which was supported by Gov. Roy Barnes, requires managed care organizations to foot the bill for the full cost of external reviews. To qualify for review, treatments or services denied as not medically necessary or as "new or experimental" would be required to carry at least a $500 price tag.
Independence required
The Georgia law provides that independent review organizations will be certified by the State Health Planning Agency. Physicians making review decisions are required to be experts in the treatment of the medical condition at issue, hold a nonrestricted license, and have no history of disciplinary action or sanctions. IROs cannot be a subsidiary or in any way owned or controlled by a health plan, a trade association of health plans, a managed care entity, or a health care provider professional association. As with most state plans, review of a life-threatening condition is put on the fast track.
Significantly, managed care organizations in the state cannot be held liable for abiding by IRO decisions, but they can be sued for damages caused by their initial determination regarding the proposed treatment. Punitive damages cannot be awarded, however. The health planning agency is authorized to immediately begin IRO certification, but the effective date of all other provisions is July 1.
Proposals at the state level run the gamut. They vary regarding the types of disputes subject to review; whether members are required to complete internal appeals procedures prior to external review; whether they specify minimum values of denied services; who will pay the costs associated with the external review; review standards; panel selection and composition; and whether decisions are binding.
AAHP reports that laws in nine states currently apply external review requirements to disputes over adverse medical necessity determinations. The Vermont rule applies only to adverse coverage decisions involving mental health, an AAHP summary of state laws and regulations says. Laws in California and Ohio apply only to disputes over experimental treatment coverage for terminally ill individuals with a life expectancy of two years or less. In Virginia, Gov. Jim Gilmore recently signed a bill that allows coverage appeals to an independent board but does not include earlier proposals that would have allowed Virginians to sue their HMOs for negligence when their decisions contribute to a patient’s injury or death.
Back to the drawing board
The Kansas Legislature at press time was debating SB 80, which would expand its existing patient protection law to include external review. Kansas insurance commissioner Kathleen Sebelius, who chairs the NAIC Health Committee, says "states must be allowed to fashion patient protection measures applicable to their own marketplaces."
The NAIC’s false start on setting a national standard seems to bear out Ms. Sebelius’ point. "It became apparent that the states all want different things," says NAIC’s Ms. Thomas. So it’s back to the drawing board for the working group, which is expected to deliver two model acts.
Those proposals won’t come up for final approval until October at the earliest, says NAIC associate counsel for health Jolie Matthews. "Everything is up in the air. Nothing is set in stone."
Contact the AAHP at (202) 778-3200, NCQA at (202) 955-5104, and Ms. Thomas at (202) 624-7790.
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