I served as the chief clinical officer for PacifiCare Behavioral Health for nine years, and I was president of the commercial division of ValueOptions for five years. Prior to that I worked in private practice across many levels of care as a solo clinician, and I was co-director of a large multi-disciplinary group practice holding contracts with several managed behavioral healthcare companies. I have worked with medical necessity criteria from both sides.
A federal court in Northern California recently found that United Behavioral Health (UBH) used its medical necessity criteria to deny necessary care. The testimony of physicians within UBH was deemed unreliable. The clinical focus of the case related in part to the needs of people with chronic behavioral health conditions. The court found that the medical necessity criteria were used to approve only acute care, rather than the ongoing, often intensive care that is needed for chronic conditions.
I will not offer any evaluation of this ruling since I don’t know the facts well enough and I don’t believe it is worthwhile to focus on just one case. Instead, I will share some of my personal experience and attempt to draw the lines of the debate in a way that I believe makes sense.
My commentary will be founded on four assertions that I believe should be pillars in this debate:
- Medical necessity criteria in behavioral healthcare are based less on measurement and specific standards than those for physical medicine.
- Medical necessity criteria in behavioral healthcare are less of a problem than the specific people making medical necessity decisions.
- Criteria for decisions related to substance use disorders are excellent given that the American Society for Addiction Medicine (ASAM) guidelines have been available and have been refined for decades. Mental health criteria are generally developed by the payer, and this practice must be abandoned and replaced with something comparable to the ASAM guidelines.
- Business arrangements impact medical necessity decisions in aggregate given that the company at risk for claims costs, be it the employer or the managed care company, has determined how tightly or how loosely to manage the utilization of care. The relevant issues are company profit, complaints by employees/members, and adherence to clinical standards.
Let’s imagine that a person has intense thoughts about committing suicide or has just made an unsuccessful suicide attempt. How long should an inpatient stay last so that, upon discharge, that person is no longer at risk for suicide? What measurements are useful in making this decision? The best measures today are patient self-report measures, but one can certainly understand a person denying any suicidal thinking just to get out of a psychiatric ward. There are certainly physical health conditions with vague or less measurable treatment guidelines, but behavioral healthcare is the king of blurry lines rather than firm boundaries when assessing the level of care and the medical necessity for treatment.
While behavioral healthcare guidelines may be less measurement-based, they are still explicit in terms of the clinical status expected for each level of care. Clinical judgment is more important than clinical measurement in behavioral healthcare authorization determinations, but it should be understood that clear standards have been articulated by many entities over the years. The more problematic issue is the clinician rendering a medical necessity decision rather than the criteria set.
Clinicians on a bell curve
Clinicians who are incompetent, biased, rushed or largely unaccountable should concern us the most. Patient placement guidelines can vary, from clarifying to confusing, but the person making the decision accounts for much more of the variance in decision-making in the field. We should also note that reviewers often work together, under supervision, with some common view of how to determine medical necessity. There may be utilization review departments that are skewed in a negative direction.
ASAM guidelines provide an excellent basis for discussing what level of care is most appropriate for a patient with a chemical dependency problem. Judgment is still required since there are no cookie cutter standards anywhere in healthcare, but the ASAM guidelines are multi-dimensional, explicit and reasonable. They are also not a product of the managed care company making the authorization decision.
A need for national standards
Unfortunately, this is not the case for decisions related to mental health disorders. Each managed behavioral healthcare company develops proprietary guidelines for patient placement decisions regarding mental health disorders. The history of this is not important. It should be changed so that we have a professional entity like ASAM drafting medical necessity criteria for mental health disorders.
Imagine a large global company based in the U.S. that pays all medical claims for its employees and family members out of its own revenue and hires a health plan to carry out the administrative services connected with this. This company may view the management of its healthcare benefits as fundamentally a valuable service for employees and one that should generate no complaints or dissatisfaction.
Now imagine a smaller U.S. employer that pays an annual premium to a health plan or managed behavioral healthcare organization (MBHO) to cover all medical claims and administrative costs. This healthcare organization will adjust its pricing each year and generate a profit margin for itself based on the utilization of health care services in addition to its administrative costs. These two scenarios are the foundation of commercial health insurance in the U.S. today.
Implicit utilization management agreements
Do health plans and MBHOs under contact with employers to manage utilization adopt standards along a continuum, from tight to loose, based on who bears the risk for medical claims? In my experience, the answer is yes. What is the result at the extremes of each arrangement?
MBHOs may at times authorize care for a large employer that appears unnecessary according to its medical necessity criteria. The contractual arrangement contains an implicit expectation for the MBHO to create no “noise” for the employer around the management of claims payment. On the other hand, MBHOs may at times deny authorization for care for a fully insured employer (where the MBHO bears the risk for all claims and administrative services) that might be viewed as marginal or unclear according to its medical necessity criteria.
This should not be a shocking revelation. Accrediting bodies such as NCQA monitor healthcare organizations for errors in both directions, labelling them, underutilization and overutilization. Patients are placed at great risk when a company does not authorize necessary and appropriate services (i.e., underutilization), and this should always be avoided.
Patients authorized for treatment beyond what is medically necessary (i.e., overutilization) may also be harmed. For example, some patients become overly dependent on outpatient therapy, and while not necessarily destructive, it can work against the goal of empowering people to be confident and resilient. There are also more destructive examples – too much time authorized in an inpatient setting may be quite noxious for the patient.
The need for transparency
Let’s move beyond platitudes, scapegoating and dishonesty from all sides in this discussion of medical necessity. I will close by highlighting another major deficiency in the healthcare system today, applicable to both physical medicine and behavioral healthcare. We need more transparency. I was driven to write this article because I know that clinical decisions are often complicated and unclear, but we should shine a light on those decisions so that everyone knows that they are being made in good faith.
I believe research will ultimately show that the best clinical decisions drive optimal clinical costs. Limiting necessary and appropriate treatment is misguided for many reasons, but surely because it is likely to prolong care and drive up readmissions to higher levels of care. Let’s manage healthcare services out in the open and talk about how to achieve the best clinical and cost outcomes.
Ed Jones, PhD, is senior vice president for the Institute for Health and Productivity Management.