Who decides what is "medically necessary?"
November 12, 2023
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November 12, 2023
ProPublica published a lawyer's challenge in getting a health insurance company to cover the costs of a specific cancer treatment. While the insurer offered to cover a different treatment, that treatment is less precise and could cause significant damage to the patient's health. Part of the article details the multiple medical reviews by different medical doctors that the appeal went through, leading readers to think that the denial was reasonable. However, it becomes clear that all of the doctors relied on guidelines that were published by a separate company. For the lawsuit that the patient field, one of the patient's doctors compiled evidence that the preferred treatment could lead to meaningfully better health outcomes. After losing the case, the insurer filed an appeal, which ended in the patient's favor.
The article explains that in this case, the insurer was governed by a statute known as the Employee Retirement Income Security Act (ERISA), which apparently gives insurers broad discretion in deciding what to cover. This arrangement seems like an inherent conflict of interest. Theoretically, the insurer adopting guidelines published by an independent company addresses the conflict of interest. However, if most of the company's revenue is derived from insurers, it is not difficult to imagine the company guidelines being biased in a certain direction. Additionally, it is not clear how strong of an incentive the company has to evaluate and recommend newer technologies, especially since they tend to be more expensive.
The federal government (or state governments) could offer an appeals panel to adjudicate disputes on what constitutes "medically necessary" on a case-by-case basis. Alternatively, the government could publish guidelines. A less direct way would be to hold the insurer responsible for unnecessary pain and suffering -- beyond the cost of the operation. If legal liabilities were significant enough over a long enough period of time, insurers might be more collaborative. This option is likely the least pleasant for patients, and perhaps for insurers as well -- assuming the legal liabilities are high enough.
November 06, 2023
As mental health issues become more prevalent, it seems that Medicare has adjusted: KFF Health News reports that for the first time, Medicare will be paying marriage and family therapists and mental health counselors for their services. The article notes: "For decades, Medicare has covered only services provided by psychiatrists, psychologists, licensed clinical social workers, and psychiatric nurses. But with rising demand and many people willing to pay privately for care, 45% of psychiatrists and 54% of psychologists don't participate in the program. Citing low payments and bureaucratic hassles, more than 124,000 behavioral health practitioners have opted out of Medicare — the most of any medical specialty."
Given that the wider population (not just 65 and over) frequently sees therapists and mental health counselors for mental health treatment, it makes sense that Medicare would also pay for their services for the elderly population. As the article notes, it is unclear whether meaningful numbers of these types of providers will sign up. Nevertheless, this seems like a step in the right direction.
October 29, 2023
KFF Health News reported on small businesses that offer a free (or inexpensive) clinic to their employees. In this context, "small business" appears to mean companies that employ between 200 and 999 workers. The article reports on companies who help set up such clinics, and that these small businesses might share the clinics with other employers -- both of which seem like creative and practical industry approaches.
The small business featured in the article thinks that the effort has been successful at diverting costly emergency room and urgent care visits, while others who have considered doing something similar are skeptical of the value of the employee benefit. The article points out that it can take years before the benefits are apparent. Interestingly, the featured small business offered a monetary incentive to employees to undergo a physical, with the CEO explaining that the region is known for poor health. This idea of rewarding patients for engaging with their health has been around for a while, but does not seem mainstream. It seems likely that there is no single approach that is cost-effective for all employers, but it is encouraging that a benefit that one might think of as exclusively in the domain of large companies is now a possibility for much smaller ones.
October 21, 2023
Health care is generally provided in clinics or hospitals. However, not everyone can make it to those settings. KFF Health News reported on the Centers for Medicare & Medicaid Services (CMS) changing policy to reimburse healthcare providers who provide care on the street ("non-permanent location on the street or found environment"). Although some states and localities have previously provided reimbursement for this type of care, this change in policy is reported to be the first time that the federal government has done so. The article notes that many providers were previously providing the care on a volunteer basis.
The hope is that "by dramatically expanding primary and specialty care on the streets, they can interrupt the cycle of homelessness and reduce costly ambulance rides, hospitalizations, and repeated trips to the emergency room." Even if no additional providers wish to provide care on the streets, this flexibility seems to be a better policy.
October 15, 2023
Medicaid -- the government's health plan for the indigent -- is known for its access issues: patients frequently cannot find physicians who are willing to accept Medicaid reimbursement. KFF Health News profiled a woman who experienced this effect firsthand. While regulations exist stipulating that patients are entitled to see a specialist within fifteen business days ("unless a longer waiting time would not harm the patient's health"), the profiled patient was unable to do so -- despite severe pain. The insurance company administering the patient's health plan appears to have simply decided that the patient's condition was not urgent and was reported to be unresponsive when pressed.
Without any real repercussions for failing to comply with regulations, it is not difficult to imagine some companies choosing the route that costs less. However, if the government were to impose consequences (e.g. fines), it is unclear what might happen. Some companies might comply, whereas some other companies might stop offering the service. After all, if complying with regulation would cause the health plans to be unprofitable (e.g. because they need to pay more in order to ensure access), some plans would likely exit the market, making the government's job more difficult. An actual longer term solution likely involves paying providers substantially more than current rates for treating Medicaid patients -- something that the government is likely trying to avoid.