Win/win with an improved appeals process.

In the past, decisions on what services were appropriate and/or desirable were made between the patient and the physician. In most cases, the cost of services was ignored. Lately, concern for cost containment has introduced a new person into the health care decision-making process: the managed care monitor/planner. The appearance of this new person has produced ambivalent feelings among patients and physicians, from joyful approval for those concerned with rising costs to extreme anger for those whose services are denied, while perceived by them as absolutely necessary. Thus, appeal mechanisms have become a way of life. This article explores ways in which the appeals process may be used as a tool to improve satisfaction levels among providers and subscribers and still fulfill the cost containment and efficiency goals of case management.

Utilization management, case management, and you.

Historically, most monitoring functions have been carried out by insurance companies. Monitoring costs was considered their fiduciary obligation to their customers. The exercise of this fiduciary obligation kept premiums low, while increasing or maintaining the benefit levels. Risk (the assumption of losses generated by services costing more than the income received from premiums) was assumed by the insurance company and eventually passed to the customer or the payer. Today, risk is being transferred more and more to the provider. This transfer was started by the creation of DRGs, the main purpose of which was to transfer risk from payers (insurance companies, employers, state and federal government, etc.) to provider health care organizations (physician groups, individual practitioners, hospitals, clinics, etc.).

Economic credentialing is here to stay.

Health care organizations are being scrutinized by payers for the efficiency of their processes to render health care. Organizations must offer alternative avenues to satisfy health care needs that are less resource consuming and have a reasonable chance of success. This presents an enormous challenge to U.S. health care. In the past, while in training, physicians were conditioned to ignore costs in the provision of care. We cannot afford that behavior today. Physicians must be reeducated and their behavior reconditioned to alter the teachings at medical school and residency with respect to resource utilization. To be effective, this education and behavior modification must be done in a nonpunitive fashion.

Constitutional rights versus malpractice insurance settlements.

The increasing costs and complexity of malpractice litigation have created an statutory right that allows malpractice insurance companies to settle malpractice claims regardless of the desires of the defendant physician. In the past, the consequences of settling a malpractice claim out of court were not as important as they are today. The Health Care Quality Improvement Act of 1986 mandates that any settlement in behalf of a physician be documented in the National Practitioner Data Bank (NPDB), which must be consulted every time the physician is credentialed. This NPDB requirement denies due process to health care providers and thus becomes a violation of the federal and many state constitutions. Physician executives and medical leaders must bring these issues to the table and negotiate solutions before damage to practicing physicians and the U.S. health care delivery system caused by this legal paradox become too severe.

I get paid fast; what about you?

The process of billing an insurance company for health care services has changed radically. In the past few years, the emphasis has been on automation. The change is fueled by the opinion of cost containment experts who claim that automation will help reduce costs in the U.S. health care delivery system. Key to success for the provider in adapting to this change will be understanding the coding used in the billing process and following standards of accuracy and fairness. This article is not intended to represent the adjudication rules of any particular insurance company. It is the result of experience as a practicing surgeon and as a consultant in the health care field.

A case of wrongful use of quality management. Summit Health, Ltd., v. Pinhas.

Summit Health, Ltd., v. Pinhas liberalized the jurisdiction of the Sherman Antitrust Act to include cases of intrastate hospital credentialing. The U.S. Supreme Court decision eased the requirements for plaintiffs to sue when they perceived that health care organizations were acting as monopolies. The court removed the defense that a plaintiff had to prove that the decision of a health care organization affected interstate commerce for the case to be heard in court. Important as the case is in antitrust law, however, greater lessons can be gained by health care organizations from analyzing the events that led to the lawsuit.

Mandated benefits: a misguided effort.

The U.S. Congress is toying with the creation of universally mandated benefits for health care, most specifically in the health care reform proposal offered by the Clinton Administration. The notion of mandated benefits has already become a part of the health care scene in insurance and managed care plans. Instead of benefiting U.S. citizens as a whole, however, mandated benefits are likely to result in a reduction in health care accessibility and quality. The reason is that mandated benefits consume a continuously growing portion of the health care pie. Deming demonstrated that quality brings lower costs, but to obtain quality we must commit adequate resources. The free allocation of resources is negated by mandated benefits.

Physician managers can play key financial management role.

Societal and technological changes experienced in the past few years have been instrumental in the creation of a new medical specialty--medical management. In this age of scarce resources for health care, physicians must be involved in management and leadership roles in the financial, managerial, and strategic planning aspects of their institutions.