Wednesday, June 18, 2003
12:01 a.m. EDT
One In Ten Requests For Health Insurance Coverage Denied
In Utilization Review Process, Health Affairs Article Says
Coverage Most Commonly Denied For Durable Medical Equipment
And Emergency Care; Surgery, Obstetrical Care Rarely Denied
BETHESDA, MD - Between
8 and 10 percent of requests to cover medical services are denied during utilization
review, according to a new study of coverage decision-making in two large medical
groups in California, published as a Health Affairs Web-exclusive article.
The study also reports that coverage denials were most common for utilization review decisions involving emergency services that members had already received and for durable medical equipment.
Management of health care utilization is a defining feature of managed care, but until now remarkably little information has been available about the decisions made in this process.
Kanika Kapur and Carole Roan Gresenz of RAND, along with David Studdert of the Harvard School of Public Health, analyzed nearly a half-million coverage requests filed by managed care enrollees at two large multispecialty medical groups in California. The medical groups receive capitated payments from health plans in exchange for delivering health care and conducting utilization review. This "delegated" system of care is prevalent in California, and nationwide approximately 40 million managed care enrollees receive care through this type of delivery model.
Utilization review requests for services enrollees had already received were nearly four times more likely to be denied than requests for services enrollees desired but had not received. A substantial share of coverage denials for services already received involved reimbursement for emergency care. The authors suggest the need for more extensive dissemination of coverage rules for emergency care.
Coverage denials for services yet to be received were sometimes based on a judgment that the requested service was not medically necessary (29 percent) or resulted because the enrollee wanted to see a provider outside of the managed care network (22 percent). But the most common reason was a judgment that the service was not a covered benefit in the enrollee's insurance policy (42 percent). According to lead author Kapur, "It appears that the utilization review process is a way to test the boundaries of the insurance coverage policy."
The study also found differences in the way in which coverage requests and denials are counted and recorded by the medical groups. "Policymakers have shown sustained interest in holding managed care organizations more accountable for the health care decisions they make," says Gresenz, "and utilization review statistics are seen by some as an important component of managed care reporting requirements and health care quality report cards. But our findings suggest that careful standardization is essential if the utilization review performance of managed care organizations is going to be compared."
Among the study's key findings:
23 percent and 15 percent of enrollees' requests for coverage of durable medical equipment (e.g., wheelchairs, hearing aids, orthotics) were denied at each of the medical groups, respectively
17 percent and 16 percent of enrollees' requests for coverage of emergency care were denied at each of the medical groups, respectively
Services with low denial rates were obstetrical care (less than 1 percent), inpatient care (3 percent), and major surgery (1 percent)
Health Affairs, published by Project HOPE, is a bimonthly multidisciplinary journal devoted to publishing the leading edge in health policy thought and research.
©2003 Project HOPEThe People-to-People Health Foundation, Inc.