Practice Guidelines for Managed Care

As more patients move into managed care plans, additional malpractice risks are created. Managed care adds a complex layer to the physician-patient relationship—including health care financing, eligibility lists, gatekeepers, utilization reviews, quality assessments, and prior authorization for treatment.

The structure of managed care conflicts with many risk management tenets. A solid physician-patient relationship helps prevent malpractice suits. Rather than nurture that relationship, however, managed care frequently requires patients to transfer from their long-term physician to someone new—a gatekeeper.¹In some managed care organizations (MCOs),²the patient may see a different physician at every visit. This places additional burdens on all physicians as it becomes very difficult to maintain familiarity with each patient's history and to provide consistent quality care. Problems can occur that may lead to frustration and anger on both sides.

By being aware of managed care's complexities, you can overcome many obstacles and establish successful relationships with your MCO patients. Because there are potential pitfalls at every level of the managed care process, risk prevention policies and procedures need to be established. The main areas of concern are: eligibility, emergency care, and utilization review (UR).

Eligibility

In the traditional fee-for-service health care system, an effective treatment relationship is established by both the physician and the patient agreeing to see each other. Potential barriers to this relationship include an individual physician's lack of availability and complications with the physician's fees or payment arrangements. If a successful relationship is not established, it is the patient's obligation to find another physician.

In contrast, under the managed care system a physician-patient relationship is initiated by the patient's choice of a particular primary care practitioner (PCP) or being assigned one by the MCO. That primary care physician is then obligated to care for the patient, even if he or she has never seen the patient previously. The physician's office staff must respond to the patient's medical problem and initiate prompt medical care—even if the patient does not appear on the MCO's monthly eligibility list.

MCO health plans may allow new member-patients to be seen by a primary care physician if they sign a waiver, agreeing to pay fees for the visit if plan eligibility is not granted. If you are a primary care physician, instruct your staff to routinely contact the MCO to confirm eligibility of a first-time patient. Your staff should also explain to patients that you will see them for a medical problem if they are not yet on their health plan's eligibility list, but that they will be responsible for fees that are not approved by the MCO. If the patient refuses to see you because of financial concerns, and there is no emergency situation, he or she should be referred to a free clinic, county hospital, or university teaching program. These actions will avoid problems that can occur with delaying or denying care.

Emergency Care

As a primary care physician, you will often be telephoned after hours to authorize emergency care for MCO patients. Occasionally, patients present in the emergency room (ER) in early morning hours with sleeping difficulties or a cold. In such cases, the usual practice is for the triage nurse or clerk to obtain a brief history from the patient before calling you for authorization. Do not rely solely on an ER employee's description as the basis for your treatment decision. Remember that this form of secondhand telephone medicine can engender substantial risk, particularly if the patient is refused authorization and subsequently develops a complication.

It is preferable to speak with the ER patient directly by phone. You will obtain a much better history directly from the patient than from an intermediary. If you are certain that the visit does not require emergency care and that you are unable to authorize the ER visit based on the patient's medical condition, have the ER physician communicate your decision personally in a way that promotes understanding, not anger. It is also important to provide the patient with alternative arrangements, such as the option to see you during office hours the next day.

Patients need to understand that you are acting under their MCO's guidelines. Indicate that you must observe the guidelines because all decisions are reviewed by the health plan's UR committee, which determines whether or not the health plan will pay for a visit. Patients also need to understand that you will see and treat them without prior authorization, but they must accept responsibility for any fees that UR finds ineligible for MCO reimbursement. Also be certain to tell the ER employee who contacts you that the bill may not be paid by the MCO, to communicate this fact to the patient, and to document the conversation in the patient's chart.

It is best to communicate an MCO's authorization policies in a matter-of-fact manner. Painting the health plan as "the bad guy" can cause undue animosity. Usually, your explanation of a denied ER visit will be accepted and your doctor-patient relationship will be preserved. Occasionally, the patient will insist on being seen. If so, it is best to authorize the ER visit and have the health plan contact the patient at a later date to review authorization procedures for emergencies.

Utilization Review

UR presents another area of potential claims. Managed care seeks to limit excessive or unnecessary care. Patients who are new to this system, however, often do not understand its benefits and limitations. Medical information is so prevalent in the media that nearly every patient will read about certain tests, procedures, or specialists that they believe to be essential to their care. The fee-for-service system to which many patients and physicians are accustomed allows greater flexibility in determining the care to be rendered. Therefore, patients often perceive that an MCO's stricter service and treatment policies conflict with their care needs.

In addition, MCO financial incentives, designed to encourage health care providers to minimize care and maximize profits, may create a serious dilemma for practitioners. In either case, a denial of care may cause patients to become angry and frustrated.

When you submit a referral for treatment that you consider necessary and appropriate, take steps to ensure that the referral is not inadvertently filed in the chart without the patient being notified.

Also, as the primary care physician, you may be prevented from referring a patient directly to a specialist or from ordering a diagnostic test at the time the problem is initially identified. Usually you will be required to either call for authorization or to complete and mail a form. The UR committee may request additional information or tests, or it may not approve the referral based on the initial information supplied. Under such circumstances, you will be required to resubmit the referral with the requested additional information. This process can present several problems:

• The greatest concern is the possibility of significant delays in patient care. Delays of any kind can cause increased patient anxiety and frustration. If there is an adverse outcome, a patient will usually see such delays as significant, which could precipitate a lawsuit.
• The UR process could result in a patient not being notified of or acting on the referral. Many patients will not follow up on a referral. It is important that your office have a system for documenting all referral requests, following up on those requests, and keeping patients informed of the steps being taken.
• The patient may not be approved for services or treatment that he or she desires and may not understand why. If the patient develops an associated medical problem later, such a denial could cause sufficient aggravation to motivate legal recourse.
• The UR process can result in primary care physicians managing medical problems that are beyond their expertise—those typically handled by specialists. This issue can create difficulties in relationships with specialists and patients.

The following guidelines can help prevent problems with UR:

1. Explain the need for referrals to patients, and have your office staff explain the UR process to them.
2. Give patients a specific date to call you about a referral if you have not already called them. Document that conversation.
3. Develop policies and procedures that include:
   1. Establishing a central area for charts or forms that need to be sent to UR
   2. Documenting when UR forms were sent, either in a separate log or in the patient's chart
   3. Initiating a telephone or mail notification procedure to ensure that every patient is notified of UR decisions
   4. Documenting that a patient was notified of all UR decisions, either in a separate log or in his or her chart
   5. Establishing a procedure for handling requests for more information so that referrals are resubmitted if delayed
4. Personally contact any patients for whom referrals are not approved. To minimize misunderstandings, do not have your staff inform patients of non-approved referrals. Patients will usually want to speak with you to find out why a referral was denied.
5. Treat any referrals in which failure to diagnose could have an adverse result (such as breast masses) as emergencies. While the patient is in your office, call in such referrals to obtain approval that day or the next.
6. Do everything possible to have a denial reversed if you suspect that the decision could seriously jeopardize a patient's health. Resubmit the referral and, if necessary, call the UR committee chairperson or the medical director of the health plan. Be sure to inform the patient of your efforts and document your referral attempts.
7. If you have exhausted the MCO's appeal process for a denial and remain adamant that a patient needs a specific service or treatment, tell the patient. Explain your reasons for concern and the consequences you foresee if the service or treatment is not performed. Recommend that the patient pay for out-of-pocket expenses to ensure that his or her health needs are met. Document your recommendations in the patient's chart. Include your opinion about proper care.

These seven principles will help prevent omissions and will decrease the chance of making patients angry. If a patient becomes angry at restrictions imposed on his or her medical care, you must use caution in addressing the concerns.

Angry Patients

You are the patient advocate in the managed care system. Recognize and acknowledge to patients that the system may have some burdensome procedures that can create frustration. Make certain that patients are aware of the efforts you have made to obtain authorization for a treatment or service that you consider necessary and appropriate. Explain the MCO system, how it operates, and what your role is. Also encourage employed patients (and their dependents) to work with their benefits coordinators. Often, an employer is better able to explain details of a particular MCO's coverage. If you have a dissatisfied patient, make certain that the health plan's UR committee is aware of that fact.

Summary

Rising health care costs have created the need for managed care plans. For many people, a managed care plan is the only health care coverage available. By recognizing this and by working with your patients' health plans, you and your patients will make an easier transition to managed care. Establishing effective policies and procedures to address potential risks will greatly reduce the threat of malpractice actions.

¹The term given to the function of a primary care practitioner (PCP) who must monitor the need for and coordinate patient referrals for specialized care or other services not rendered by the primary care provider.

²A general term for health care delivery systems that control the use of medical services in various ways—including requiring prior authorization for specific procedures, hospital stays, and specialist referrals.

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