Medical Necessity Criteria An Overview of Key Components Presented by BHM Healthcare Solutions

Learning Objectives Upon completion of this presentation participants will have a thorough knowledge of Medical Necessity Criteria including emerging definitions Participants will gain general knowledge of the role of managed care and efficacy of treatment in relation to MNC Participants will understand the implementation of Mental Health Guidelines from multiple perspectives Participants will be able to distinguish between Diagnostic Criteria and MNC, and how they effect determination of appropriate levels of care

What is Medical Necessity? “Medical Necessity” is the vehicle for specifying how broad or narrow insurance coverage will be. “Medical Necessity like beauty, can often be a matter of taste or personal opinion and the idea of each his own does not work for medical necessity. The fact that a provider has prescribed recommended or approved medical care or services does not in and of itself make such care or services medical necessary or a covered service."

Defining Medical Necessity Definitions of Medical Necessity vary according to the MCO, and payer but may include the following: Intended to prevent, diagnose, correct, cure, alleviate, or preclude deterioration of a diagnosable condition Care which is effective, appropriate, and necessary for treatment Care that meets the basic health needs of the person Treatment which is safe and effective according to a nationally recognized standard Most appropriate and cost effective level of care Service appropriate for symptoms, diagnosis and treatment of a particular disease or condition as defined under ICD-9 or DSM-IV Service provided in accordance with generally accepted standards of professional practice

Defining Medically Necessary Care Most definitions of Medical Necessity incorporate principles of providing services which are “Reasonable and Necessary” Or “appropriate” in light of clinical standards of practice

Difficulties Using MNC Differing definitions Lack of biological indicator Ambiguous diagnostic criteria Reliance on subjective judgment Lack of objectivity Non public MNC decisions Widely varying interpretation by providers Decision makers don’t see the patient Service limitations and care coverage

New Definitions Emerging Entire Patient Population Select Population Single Patient New definitions for MNC are emerging for the following reasons: Culture of managed care Shift from fee for service to managed system of care New focus on the entire population; not a select few

New Definitions Emerging Cont. New definitions must include an assessment of efficiency of care provided Decisions based on MNC should be viewed as tools to help patients and payers make better informed decisions Decisions based on MNC and cost effectiveness assist in defining relative not absolute thresholds Decision rules must be able to incorporate individual patient risks, benefits and preferences New definitions must allow for reasonable differences in physicians and patients beliefs about available treatments

Managed Care: The Good and The Bad The purpose of managed care is to serve patient populations managed care is both a business and a humanitarian calling These objectives can become distorted when business goals are couched in the language of medical necessity Problems arise due to the many, and varying ways to diagnose and treat mental illness Discrepancies can also arise as clinicians vary widely in their abilities and competence

The Purpose of Managed Care Managed care strives to ensure that treatment is appropriate and cost-affective Its purpose is to help you conceptualize, present, and document clinical care in a manner that greatly increases the likelihood that it will be approved This is achieved through clinical review Medical necessity criteria, diagnostic criteria, and clinical practice guidelines serve different purposes These criteria are subject to different, yet equally defensible interpretations by different clinicians. This is to ensure a set of quality standards of care across all levels and in all areas.

Efficiency is Obtained When: Treatment is prescribed in the least restrictive environment Treatment provided is cost efficient When the intensity of service corresponds to severity of illness MCO decision making thresholds used in medical necessity determinations are fair and consistently applied The goal of behavioral care is to enhance the well being of patients through increased access to: Behavioral Healthcare services Behavioral Healthcare support Behavioral Healthcare solutions

Implementation of Guidelines- Ethical Perspective Guidelines were needed because allocating care which was once lenient has become strict Cost of care is considered along with benefits and potential harm There was concern that the managed care company was making a profit from enforcing greater practice efficiency “The ethical issue therefore is not whether making a profit is right or wrong, it is whether the decision making thresholds used in making medical necessity determinations are fair and consistently applied.” -William Glazer

Implementation of Mental Health Guidelines MNC Criteria are guidelines used by utilization management staff to make payment determinations MNC guide both providers and reviewers to the most appropriate level of care for a patient MNC guidelines are not intended to replace prudent clinical judgment MNC are not exhaustive and will not cover all situations UM clinicians must make a distinction between a service being “beneficial” to the consumer’s health and a service being “essential” to the consumers health

Implementation of Guidelines- Exceptions Exceptions should be reviewed by a physician or peer reviewer based on accepted standards of good medical practice Exceptions may also be based on geographical variances in availability of treatment services. (rural or underserved areas) When a medically necessary service is not available the patient will be able to either obtain outside services, or treatment at a higher level of care

Diagnostic Criteria vs. Medical Necessity Criteria Medical necessity criteria and diagnostic criteria are different Diagnostic criteria focus on the signs and symptoms to make a specific diagnosis Medical necessity criteria focus on the need for a particular level of care

Need For Standardization There are many ways to provide acceptable treatment for a patient Clinicians vary widely in their abilities and competence Medical necessity criteria, diagnostic criteria, and clinical practice guidelines serve different purposes They are subject to different, yet equally defensible interpretations by different clinicians

Appropriate Level of Care Determining the appropriate level of care depends on the following three things: Appropriate Level of Care Severity of Condition Intensity of Service Psychosocial Considerations

Evaluating Clinical Necessity for Continued Care In evaluating clinical necessity for continued care three situations may exist Severity of illness, intensity of service criteria, psych. considerations present at onset of treatment continue to apply New symptoms have emerged and no other level of treatment would be adequate Further evaluation is needed as another level of care or addition of other services appears imminent

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