Independent Medical Review Experiences in California, Phase II: Cases Including Medical Necessity

Transcription

1 Independent Medical Review Experiences in California, Phase II: Cases Including Medical Necessity April 2003 Prepared for the California HealthCare Foundation by The Institute For Medical Quality Authors Jill K. Silverman, President and CEO, IMQ Ellen Kaufman, M.S., Project Director, Phase I Tracy Barry, Project Director, Phase II Consultant Susan Radius, Ph.D., C.H.E.S., Statistical Consultant Professor and Master's Program Director, Department of Health Sciences,Towson University

2 Acknowledgments IMQ gratefully acknowledges the support and active involvement of the DMHC in contacting patients who became study participants. This effort to make initial contact with patients and families, to distribute consent forms, and to introduce the study was fundamental to the work. It would have been difficult to initiate and complete this project without their assistance. The Institute for Medical Quality (IMQ) is a 501 (c)(6) nonprofit organization dedicated to improving the quality of care provided to patients across the continuum of health care. IMQ offers a wide range of educational, accreditation, consultation, and certification programs. For further information regarding this study, please contact: Jill K. Silverman, M.S.P.H., president and CEO Institute for Medical Quality 221 Main Street, Suite 210, San Francisco, CA Disclaimer: IMQ was the only recognized accreditor of external review organizations in California during IMQ reviewed IROs during this time period in which IMR was regulated by Friedman-Knowles legislation. IMQ ceased accrediting IROs after 2000 and no longer has an active program in this field Copyright 2003 California HealthCare Foundation ISBN Additional copies of this and other publications can be obtained by calling the California HealthCare Foundation at (510) or by visiting the Web site ( The California HealthCare Foundation, based in Oakland, is an independent philanthropy committed to improving California s health care delivery and financing systems. Formed in 1996, our goal is to ensure that all Californians have access to affordable, quality health care. CHCF s work focuses on informing health policy decisions, advancing efficient business practices, improving the quality and efficiency of care delivery, and promoting informed health care and coverage decisions. For more information, visit us online ( 476 Ninth Street Oakland, CA Tel: Fax:

3 Contents Executive Summary...1 I. Introduction...7 Background...7 Timeline for Study...8 Methodology...9 II. Findings...12 Patients...12 Physicians...22 Plans...25 Analysis...31 III. Recommendations...39 Patients...39 Physicians...41 Plans...41 DMHC...41 IV. Conclusion...43 Appendix A. Advisory Panel...45 Appendix B. Patient Survey...47 Appendix C. Summary of IMRs by Health Plan...71 Appendix D. Geographic Distribution of IMRs...72 Appendix E. Physician Survey...73 Appendix F. Health Plan Survey...83 Endnotes...94

4 Executive Summary Background Independent, external review of HMO decisions has been a major tenet of patients rights proposals enacted over the past decade. Independent medical review (IMR) is a formal process used by patients and health plans to resolve disputes involving denied treatments or services. The review process consists of an evaluation by independent clinical experts of a specific service or treatment decision made by a health plan after the patient has exhausted the plan s internal appeals process. Reviewers are selected by an independent review organization (IRO) unaffiliated with the health plan. The earliest state external review program was established more than twenty years ago. By the end of 2001 at least 42 states had established external review programs. Since the Friedman-Knowles IMR legislation was passed in California in 1999, almost 1,000 reviews have been requested. Phase I of the Independent Medical Review in California study evaluated patients experiences with this process during its first two years (1999 through 2000). During this time, participation was limited to patients seeking reviews of health plan denials of investigational/experimental treatments for life threatening or seriously debilitating conditions and the process was managed by health plans and IROs, not a state agency. Legislation in 2001 broadened the scope of IMR and changed administrative processes. Eligibility for IMR expanded to include patients for whom a service was denied, delayed, or modified by their plan based on medical necessity. Participation in the process was no longer contingent upon a physician recommendation for a certain service, but only required that the patient had been seen by a physician, denied a service, and participated in the plan s own internal grievance process for 30 days. The patient, or a designated representative, could then request a review by submitting an application to the new state regulator, the Department of Managed Health Care (DMHC). Independent Medical Review, Phase II California HealthCare Foundation 1

5 This report covers the period during which the criteria for participation included all patients whose requests had been denied as not medically necessary, in addition to those requesting investigational and experimental treatments. Study Design and Methodology Using a written survey and telephone interviews, Phase II of this study sought to review the experiences of 661 patients whose cases went through IMR in California during Surveys were completed by 154 patients, representing nearly 25 percent of the total number of IMRs conducted during the study period. These patients were asked to identify their physicians who were involved with their IMR. Forty-nine percent of these physicians then responded by completing a written survey or by telephone interview. Primary study goals were: to review the experiences of patients, health plans, physicians and the Department of Managed Health Care (DMHC); identify opportunities for improvement; and compare findings with those from Phase I. This study did not review the clinical appropriateness of recommendations or the medical outcomes of procedures. Seven health plans representing more than 15 million of the approximately 20 million California HMO members participated in the study. Patients from these plans accounted for 94 percent of all independent reviews conducted during 2001 and The study was guided by an advisory panel of experts representing the viewpoints of four primary parties to the process: consumers, physicians, DMHC, and health plans. Major Findings As summarized below, study findings provide important insight into the current effectiveness of IMR in California and suggest specific areas for improvement. The full report also includes observations about differences between patients whose health plan decisions were overturned and those whose decisions were sustained, and between patients appealing investigational/ experimental treatments and those bringing less serious or life-threatening cases denied based on medical necessity. Based on these differences, suggestions are offered for improvement of the IMR process. Awareness and Knowledge Awareness of the IMR process among patients and physicians is an important goal of the DMHC. Concerted efforts have been made to increase patient and provider knowledge of the availability of the review process since its inception in Notification requirements were expanded beginning in Nevertheless, the study found that patient awareness of IMR remained essentially the same during both study phases. Targeting patients before they are in a position to consider IMR as an option appears to have little impact. Independent Medical Review, Phase II California HealthCare Foundation 2

6 Two-thirds of patients were not aware of the availability of IMR before direct involvement. Most learned about it during the health plan denial process. Of those who knew about the process prior to involvement, the highest percentage learned about it through their health plan. The majority of patients who brought cases forward for IMR first learned about it from the health plan s denial letter. Additionally, very few physicians knew about IMR before one of their patients used it. California s IMR process was designed to be independent of health plan influence. However, study patients did not possess good overall knowledge of the IMR process and even less knowledge of safeguards to protect its independence. Only about one-third of patients knew that medical experts had no significant financial interest in the patient s health plan, provider, or medical facility and that findings had to be supported by medical and scientific evidence. Physicians also lacked the information or knowledge to know if reviews were truly independent. A majority, for example, did not know if the health plan played a role in selecting the IMR medical experts. However, three-fourths believe that independence of the medical experts is a very important feature. Experience and Expectations Regardless of a review s outcome, long-term success of the program depends in part on how easily patients navigate the process and how well supported they feel. A majority of patients reported that they received all the information needed to initiate a review and felt that the DMHC provided them with timely assistance in getting through the administrative process. However, once the process was initiated, only about one-third of patients said it was clearly explained. While two-thirds felt they had access to information to support their case, only thirty percent of patients said they actually received assistance supporting their case. Most often, their physician was cited as the source of this support. Sixty-percent of patients were satisfied with the amount of time it took to receive the results of the IMR and a slightly higher percentage realized that the DMHC was involved in the process. The largest percentage of patients reported a 3 to 5 month time period from the decision to pursue a treatment until they were notified of a final determination. In contrast to patients, physicians often said they did not have an active role in the process and did not feel directly involved. It is notable that physician responses to many of the questions indicated that they were not not well integrated into the process. When asked an open-ended question about what worked best with IMR, responding patients focused on how well the administrative process served them and most often praised the speed of the process and DMHC for providing good assistance. Patients had high expectations about the potential outcome of IMR. About 73 percent of respondents gave themselves a 50/50 chance that their denial would be overturned. In fact, 60 percent of all patients in the study did have their health plan denial overturned and were approved to receive the requested treatment or service. However, experimental/investigational appeals were overturned only 36 percent of the time. Independent Medical Review, Phase II California HealthCare Foundation 3

7 In contrast to patient optimism about the process, physician expectations were low. Only 33 percent thought chances were good that patient appeals would be approved. Confidence and Outcomes Trust and confidence in the conduct of reviews was moderate; confidence was noticeably lower among patients who submitted investigational/experimental cases. Patient confidence ranged from low to high on key attributes of the program. Only about half of all respondents felt confident that consideration was given to the individual s medical status, that medical experts conducted a fair and impartial review and thoroughly considered available scientific information, and that individual reviewers had appropriate expertise. IMR did not appear to change how physicians made future treatment decisions. Only six percent of doctors reconsidered the efficacy of certain treatments based on their IMR experience. In spite of this assessment, 80 percent of physicians said that patients with treatments approved through IMR experienced an improved or a sustained quality of life. For the vast majority of those whose denials were upheld, the experience did not change their belief that the treatment was in their best interest, despite the intent of the process to provide the patient with expert independent assessment. Less than 10 percent of this group understood the reasons the reviewers upheld the denial. Physicians open-ended responses to a question on how to change the process focused on how reviews are conducted. They recommended a broader review, consideration of more updated information, use of appropriate experts, and a more open process. Health Plan Role and Evaluation Health plans play a crucial role in notifying patients about IMR. All seven plans in the study reported that they provided written information concerning the right of a patient to request IMR on at least some letters of denial. Not all plans, however, report that they include IMR information on all denial letters or in all other places required by current law. With one exception, plans reported that services approved through IMR were promptly authorized within the legislated time frame. A number of patients, however, reported significant difficulty obtaining the approved service because the plan continued to deny it even after IMR approval. Six of the plans surveyed reported that IMR results did influence internal medical policy and coverage decisions, particularly in regard to gastric bypass surgery, pharmaceutical criteria, breast surgery, chiropractic and physical therapy treatments, and oral-maxillofacial procedures. Plans believe that IMR had an impact on internal policies and operations in mainly positive ways, but the majority of plans stated there should be some changes to the process. Several comments focused on the need for additional evidence to support reviewer selection and decisions. The plans also say that if they have more information on the rationale of decisions, this will likely influence medical policy or coverage decisions. Independent Medical Review, Phase II California HealthCare Foundation 4

8 The majority of plans agree that the 2001 revisions to the law strengthened IMR by requiring greater disclosure, but weakened the process by eliminating IRO accreditation, reducing oversight, and loosening requirements for the types of literature to be included in reviews. Recommendations and Conclusion Based on an analysis of findings, several recommendations were made to improve the quality of IMR, making it more accessible and efficient for consumers, physicians, and health plans. 1. Assist patients in the IMR process by formalizing steps leading up to IMR. Focus IMR notification and IMR instructions on the health plan s denial letter and assist patients in submitting information into the review process. Accomplishing this recommendation might also include: sending patients an IMR application separate from the health plan s grievance paperwork providing patients a How To handbook verifying that plans display IMR information according to statute and clarify which denial letters and grievance forms need to include IMR information 2. Assure enforcement of IMR decisions. Some patients faced obstacles in receiving services or treatments after receiving IMR approval. There is an opportunity for follow-up with patients to verify that the IMR decision has been implemented. 3. Create a more open IRO process. All respondents wanted a more open process, including provision of information on how reviewers are selected, their specialty and qualifications; requiring the IRO to contact the patient before the review to verify that correct records are being reviewed; assurance that updated information is used in reviews; considering more than one expert on a panel to represent different schools of thought; and, finally, giving the patient s physician access to the reviewer to discuss the case. 4. Ensure the quality of the IRO process through use of an independent monitoring entity and monitoring of accreditation status. 5. Integrate and more actively involve physicians in the process by informing them of the availability of IMR and when it has been initiated for a patient. 6. Enable health plans to better integrate and process the outcomes of IMRs by including them in feedback loops and offering plans information on the criteria and the literature used by IROs to make decisions. During the time IMR has been studied, it has generally been viewed as an effective mechanism for resolving disputes between patients and health plans regarding medical decisions. Health plan decisions have been upheld about 60 percent of the time over the life of California s IMR program. Plans have pointed out that IMR reduces perceptions of bias and may help reduce liability. Independent Medical Review, Phase II California HealthCare Foundation 5

9 IMR is relatively cost effective, quickly accomplished, and provides a forum where medical professionals make medical decisions. It is seen as an important patient protection, giving consumers access to treatment, expertise, and services that they might not otherwise have. Despite the fact that some people perceive that they win or lose through this process, IMR has the potential to assure them that a sound decision was made because their request was evaluated by independent and well-qualified experts. IMR in California has undergone dramatic changes in short periods of time. The California legislature greatly increased the number of cases going through IMR by making a greater number of patients eligible for the process. This study indicates that some components of the program are working well. Other components should continue to improve as experience helps to identify opportunities for improvement. Adoption of this report and its recommendations could assist the program during its evolution to become more accessible and effective for all parties who participate in independent medical review. Independent Medical Review, Phase II California HealthCare Foundation 6

10 I. Introduction Background Independent medical review (IMR) is a formal process used by patients and health plans to resolve disputes involving denied treatments or services. The review process consists of an evaluation of a specific service or treatment decision made by a health plan. Experts selected by an entity separate from the health plan conduct the evaluation to eliminate conflict of interest issues. The earliest state external review program was established more than 20 years ago, and most states had established their own external review programs by the end of California established its independent medical review system in 1998 with the passage of Friedman-Knowles legislation. The legislation was motivated in part by individuals who believed that HMOs might be approving or denying treatment due to concerns about costs rather than medical appropriateness. The goal of the legislation was to increase public confidence in managed care and the way in which health plan decisions were made. Since this initial legislation was passed, almost 1,000 independent medical reviews have been requested. Phase I of this study evaluated how well this process worked when it was limited to experimental/ investigational treatments in 1999 and The purpose of this second phase is to evaluate how well this process has served the patients, health plans, and physicians that engaged in it from January through December Independent medical review in California was initially limited under the Friedman-Knowles Act to patients with life-threatening or seriously debilitating conditions requesting investigational or experimental treatments. Physicians played an essential role in this environment because they certified that a patient s condition met certain requirements and that they believed nonstandard therapies might be beneficial to their patient. During this time, health plans contracted directly with one or more independent review organizations (IROs) to conduct external reviews of these cases. The IRO staffed its panel with three medical experts to make determinations for each case. These review organizations were accredited by a nonprofit independent accrediting organization to enforce standards and provide ongoing quality monitoring. Under the law, disclosure of IMR information was fairly narrow. The Department of Corporations (DOC) was the state regulator of independent medical review during this time. Independent Medical Review, Phase II California HealthCare Foundation 7

11 Legislation effective in 2001 dramatically expanded the scope of IMR and changed the way in which the process was administered. Now patients whose services were denied, delayed, or modified by their plan based on a decision that the service was not medically necessary could also pursue independent review. Eligibility for these patients was not contingent upon a physician recommendation of a certain service. Patients had to be seen by a physician, denied by the plan based in whole or in part on a decision that the health care service is not medically necessary, and participate in the plan grievance process for 30 days. The patient, or a designated representative, could then request a review by submitting an application to the new state regulator, the Department of Managed Health Care (DMHC). The DMHC, not individual plans, determined whether a denied service was eligible for review. In addition, the decisions of the IRO were adopted by the DMHC and, in the event a plan decision was overturned, the services were required to be promptly authorized or plans could face administrative penalties. In an effort to reduce conflict of interest issues, the new law also required that the DMHC, instead of health plans, contract with one or more IROs. The DMHC contracted with a primary IRO to have the initial option to review all cases. This IRO was the Center for Health Dispute Resolution (CHDR). The DMHC also contracted with a secondary IRO, Medical Care Management Corporation (MCMC), and a teriary IRO, Hayes Plus, to review any cases that CHDR declined. In 2001, only one case went to MCMC and no cases went to Hayes Plus. (MCMC and Hayes Plus were the only two IROs recognized in California to conduct independent medical reviews during 1999 to 2000 under the auspices of Friedman-Knowles legislation.) IROs no longer had to be accredited by an independent professional entity, but did need to meet certain legislative specifications. The IRO, for example, is required to have a quality assurance program in place ensuring that experts are appropriately selected and credentialed and that reviews are monitored so they are timely, clear, and credible. Expert reviewers must be screened to make sure they have no material professional or financial affiliation with any of the participants in the process. The IRO panel would now consist of one medical expert rather than three, as it had previously. (During 2001, three medical experts were still required to review investigational/experimental cases. Medical necessity cases were usually reviewed by one medical expert, although more than one expert was possible upon patient, plan, or DMHC request.) The new law also required a broader and more prominent display of IMR information and now included disclosure on denial forms and grievance paperwork. The expansion of IMR presented the Institute for Medical Quality (IMQ) with a unique opportunity to study a greater number of cases resulting from the significantly larger number of reviews conducted under this new environment. The larger study universe included patients who were less seriously ill and perhaps in some cases better able to respond and relate experiences of their independent medical review. We believe this larger study universe provides substantial information about the way in which patients learn about and reach IMR, their ability to navigate the process, and how fair they perceive the process to be. Timeline for Study Phase I Friedman-Knowles legislation required that from 1999 through 2000, HMOs must provide external and independent medical review for specific types of patients who requested investigational or experimental treatments and had been denied by their health plan. During the Independent Medical Review, Phase II California HealthCare Foundation 8

12 first year of this program, independent medical review was available to patients with lifethreatening conditions. In the second year, patients with seriously debilitating conditions also had the option of independent medical review. Phase I of this study, released in 2002, evaluated experiences during this time period. Phase II The legislature continued to expand the scope of independent medical review in California in In the preceding legislative term, Assembly Bill 55 and Senate Bill 189 broadened eligibility for independent medical review to include patients whose treatments or services were denied by health plans as not medically necessary. It also modified the way in which reviews were administered. Phase II of this study discussed below evaluates independent medical review experiences during 2001 which includes both investigational/experimental cases and medical necessity cases and compares them with experiences during Phase I. Methodology Advisory Panel From the onset, this study was guided by a body that represented the viewpoints of four primary parties to this process. This advisory panel assisted in framing the questions for the study and served as a review body for survey documents. The study was fortunate to have the participation of a group of individuals with a broad base of expertise. The 13 members, listed in Appendix A, are distributed as shown in Table 1. Table 1. Advisory Panel Member Distribution Number of Group Represented Members Health Plans 4 Consumers 5 Physicians 2 DMHC 2 Questionnaire Development Questionnaires for each study segment (patients, physicians, and health plans) were developed in consultation with Susan Radius, Ph.D., C.H.E.S., professor and master s program director at Towson University. Dr. Radius, who has expertise in drafting survey instruments, reviewed the questionnaires to ensure that the document flowed logically and that questions were posed in a neutral manner and were accessible to the respondents. The basic format of Phase I questionnaires was used, but it was modified to consider the new environment under which IMR was being administered. Advisory panel members reviewed the modified questionnaires, which were also field tested by parties independent of the study. Patient Consent Process The original introductory letter and consent form sent to patients during Phase I was re-written to reflect the current protocols for IMR and the larger and different patient population now eligible Independent Medical Review, Phase II California HealthCare Foundation 9

13 for IMR under Phase II legislation. The final patient letter was revised with the assistance of legal counsel at the DMHC. The DMHC, which has contact information for all patients who received an IMR in 2001, decided that, to protect patient confidentiality, they would not release that information to IMQ. Instead, the DMHC agreed to send letters requesting participation in the study, together with consent forms, to these patients. Consent forms were returned to IMQ, and if the patient agreed to participate, an eight-page questionnaire was sent to them. Patient responses to the questionnaire are shown in Appendix B. Physician Consent Process The patient consent forms asked patients to identify the physicians who were involved in their independent medical review and give IMQ consent to contact these physicians. If the patient gave approval, IMQ sent the physician a letter requesting participation in the study. The letter and consent process was reviewed by IMQ legal staff to make sure that proper procedures were being followed to protect patient and physician confidentiality. Health Plan Consent Process IMQ identified six major health plans and one smaller regional plan because these plans enrolled numerous patients who participated in the IMR process. Individuals in a variety of management positions within those plans gave their verbal consent to participate in this study. Study Universe During our study period of 2001, a total of 661 reviews were conducted. IMQ s study universe included the 610 cases conducted and completed during this time. IMRs that were withdrawn were not included in our totals. The total number of IMRs conducted during 2001 and their distribution among health plans is shown in Appendix C. Patient Participation/Response Rate The DMHC s Help Center mailed 610 letters and consent forms to patients who completed an IMR in Patients, family members, or legal representatives returned 181 consent forms to IMQ. One hundred sixty-seven agreed to take part by completing a survey. Twenty-eight patients in this group elected to complete the survey over the phone with the research project director. Fourteen patients declined on their consent form to take part in the study. Follow-up calls and reminder letters, which included another survey, were used to encourage patients to return their questionnaires to IMQ. One hundred fifty-four patients completed and returned their surveys, representing a 25 percent patient response rate based on the total number of IMRs completed in Fifty-six percent of the reviews conducted in our study sample were for female patients, and 44 percent were for male patients. 2 A slightly higher percentage of women responded on behalf of the patient than did men, suggesting that women might take a more active role in directing the process for their families, including minor children and spouses. Respondents in this survey were fairly evenly distributed geographically throughout the state. Responses came from 140 different zip codes and approximately followed general population densities within the state. Distribution of study respondents by zip code is shown in Appendix D. Independent Medical Review, Phase II California HealthCare Foundation 10

14 Physician Participation/Response Rate On their consent forms, 107 patients identified 118 physicians who were involved in their IMR and gave IMQ approval to contact them. Not all patients identified their physicians or gave consent to contact them. Several identified more than one physician. Questionnaires were sent to the 111 identified physicians; seven could not be located. Once again, IMQ placed calls and sent reminder letters, including another survey to encourage physicians to return the questionnaire. IMQ received answers to 44 percent of all questionnaires sent to physicians. IMQ was aware that surveys of physicians have been characterized by low response rates; it took this fact into consideration in designing this survey. A shorter version was used; physicians were given the flexibility of choosing the mode of interview (recommended to increase response rates for this group); and open questions provided physicians with the opportunity to express their views completely. Although IMQ received a small number of physician responses, the data allowed us to capture some preliminary evidence regarding the degree to which physicians were integrated into the process and how they experienced IMR. It is one of the first attempts to collect data regarding physician experience with the process. Responses to the physician questionnaire are shown in Appendix E. Health Plan Participation/Response Rate IMQ identified six major California health plans and one smaller regionally based plan that represented 94 percent (573 cases) of all IMRs completed during Six plans were selected because they are major health insurance providers in California, enroll significant numbers of patients, and have larger numbers of IMRs. IMQ included a smaller regional plan as well, to see if their experience would parallel that of the larger plans. All of the identified plans participated with the exception of Aetna US Healthcare of California. This represented an 88 percent response rate among identified plans. Table 2 lists the plans that participated, the distribution by plan, and the number of reviews for each plan. Responses to the health plan questionnaire are shown in Appendix F. Table 2. Distribution and Number of Reviews by Plan Plan Number of Reviews Membership Enrollment Health Net 152 2,275,985 Blue Shield California Physician Service 130 1,257,793 PacifiCare of California 141 1,646,501 Blue Cross of California 64 4,244,284 Cigna HealthCare of California ,163 Kaiser, California Division 33 5,597,761 Western Health Advantage 4 49,269 Independent Medical Review, Phase II California HealthCare Foundation 11

15 II. Findings Patients Knowledge of Independent Medical Review Almost two-thirds (62 percent) of the patients in the study were not aware of independent medical review prior to their direct involvement with the process. Even though the total number of independent medical reviews (IMRs) increased from 263 reviews performed in 1999 and 2000 (combined) to 610 reviews in 2001, the percentage of patients who knew about the process before they had a case themselves remained essentially the same over a three-year time period. One-third of the patients knew about IMR before they were involved in a case, and almost half of this group cited their health plan as their first source of information. Forty-three percent of this group first learned about IMR from their plan. Twenty percent cite other sources for information on IMR, such as friends, the Internet, their own occupation, or hearing about it in a medical setting, (e.g., from a caseworker in the hospital). Twelve percent report that their first source of information was the DMHC. The general media, such as TV, radio, and newspapers, reached only 6 percent of this group. Physicians, lawyers, and employers were not commonly reported as first sources of information about IMR. Almost 60 percent of patients who had a case referred to IMR first found out about it when the health plan or medical group denied the proposed treatment. The next two commonly cited times of first exposure to IMR are during the health plan s grievance process (16 percent) and during a variety of other events (13 percent) for example, during their own research, when a physician or nurse told them, or when contacting an attorney or employer. Health plan denial letters were identified as the single most common source for learning that a patient s individual case would qualify for IMR. Patients listed the DMHC, closely followed by their doctor or medical group, as the next most common sources of information about their case. It appears that patients are increasingly using the DMHC, not as a first source of information, but for assistance after becoming aware of it. During Phase I of this study, none of the respondents used the DMHC or the previous regulator of HMOs in California, which was the Health Plan Division of the Department of Corporations. The Department of Corporations served as the state Independent Medical Review, Phase II California HealthCare Foundation 12

16 regulator of managed care plans until July 1, 2000, after which the Department of Managed Health Care was established. During phase II of this study, 30 percent of all patients indicated that they used the DMHC as a source of information regarding their case. Patients did not have good overall knowledge of the IMR process, and even less knowledge of the safeguards in place to protect the independence of the process. When patients were presented with a list of features that described IMR, a little less than one-half understood the following by the time their case was sent out for review: IMR is defined by state legislation and regulations; and the independent review organization (IRO) is not affiliated with any health plan. When asked if they knew about specific safeguards and protections built into the process, the numbers shifted downward. Only about one-third of the patients knew: medical experts are selected by the IRO and not the health plans; medical experts have no significant financial interest in the patient s health plan, provider, or medical facility; and medical expert findings have to be supported by medical and scientific evidence. This one-third ratio, however, reverses when patients report knowing that IMR requires health plans to provide treatment if approved. This may suggest that patients were particularly interested in the enforcement aspect of IMR and made inquiries about this, or were more highly informed about this feature of the process. Almost two-thirds of all patients said they knew that the health plan was required to provide the treatment if the medical experts determined that it would be helpful. Despite general lack of knowledge about the features of IMR discussed above, the majority of all patients, after completing an IMR, rated each as being very important to having an effective review process. When ranking features of the IMR system, patients placed the most emphasis on the enforcement aspect of the process. Ninety-two percent of all respondents ranked as very important that the health plan is required to provide the treatment if the medical experts determine it would be helpful. One hundred percent of all patients in this study sample learned about independent medical review through services and information provided in English. Only two patients indicated that it would have been helpful to receive this information in another language; both identified Spanish. It is possible that patients speaking other languages may have self-selected out of this study because the invitation to participate in this study and the accompanying consent form were presented in English only. Another possibility exists as well: Patients with limited English proficiency may not have been able to participate at all in the IMR process because of language barriers. Independent Medical Review, Phase II California HealthCare Foundation 13

17 Pathways to IMR Introduction If a patient appeals a denial, the plan provides its own internal grievance process as a forum for resolving disputes. Patients whose cases were denied as not medically necessary must participate in their plan s grievance procedure for 30 days before applying for an IMR. The law does not require patients whose requests are denied because a certain treatment is investigational or experimental to go through the plan s grievance process. Most patients in this category, however, elect to work out their dispute with their health plan before applying for external review. Grievances By statute, patients are required to participate in a grievance for at least 30 days before they become eligible to apply for IMR. Almost 60 percent of all patients did not know when the clock started and stopped on this 30-day time period. This figure remains constant among patients, whether denied or approved through the IMR process. Only one-half of patients report that they received a decision regarding their grievance within 30 days. Fifty-one percent said that their grievance was completed in 30 days. An additional 19 percent stated that they did not know if their grievance was finished within 30 days. About one-half of the patients who had participated for 30 days in the grievance process were notified that their case was then eligible for IMR. Fifty-four percent of the patients say that their health plan notified them of this after the 30 day time period. Twenty-seven percent said they were not notified and 14 percent could not remember. After patients participated in the grievance process, however, their expectations about their potential success with IMR were fairly high. About 73 percent of all patients give themselves a 50 percent to very likely chance that their denial would be overturned through IMR. Independent Medical Review, Phase II California HealthCare Foundation 14

18 Patient Experience During IMR General Experience with IMR IMR may have been fairly easy to initiate, but explanations of the process itself were not reaching many patients. Overall, when describing their general experience with IMR, the majority of patients said that they had received all the information needed to initiate a review in a timely fashion. Although it appears that the majority had the information to initiate an IMR, only about one-third of all patients said that the process was clearly explained and knew what to expect. (Among denied patients, less than one quarter say that the process was well explained and that they knew what to expect.) Fewer knew how long it would take to receive the recommendations of the medical experts. A small percentage faced a physician or health plan that discouraged them from proceeding with the review. Supporting a Case and Submitting Information into the Review Once IMR was initiated, about two-thirds of all patients felt that information was available to explain how to support their case, including who could submit information for the review. The same number of patients also expressed confidence in their own ability to support their case. Patient confidence dipped, however, when it came to knowing how and where to find information about their case. Only about one-third responded that they knew how to do this. Thirty percent of the patients reported that they had assistance supporting their case. Physicians were identified one-half of the time as the individual who helped them. Twenty percent would have appreciated assistance from a knowledgeable person and identified an advocate/advocacy program or physician as their first choice. While most patients did not feel intimidated by supporting their case, one-quarter of patients with investigational/experimental cases said they felt this way. Despite the fact that few patients knew how and where to find information to support their case, an overwhelming majority (82 percent) believe that they took an active role in this part of the process and said they personally submitted information into the review. Timeframes Most patients (60 percent) were satisfied or very satisfied with the amount of time it took to receive the results of the IMR. Satisfaction levels dropped to 35 percent among denied patients and to 44 percent among investigational/experimental cases. The largest percentage of patients reported that three to five months elapsed from when they first decided to pursue a treatment until they were notified of the final determination of the IMR. These timeframes differ, however, between medical necessity cases and investigational/ experimental cases. Variations could be due to the length of time required in the plan s internal review process and expedited reviews; they may also correlate with the complexity of the investigational/experimental cases. Independent Medical Review, Phase II California HealthCare Foundation 15

19 Table 3. Responses to How much time passed from when you first decided to pursue the proposed treatment until you were notified of the final determination of the IMR? Base (total respondents) 1 month or less 1 2 months 3 5 months 6+ months Don t remember Not applicable (had treatment before review) No answer Medically Necessary Cases % % % % % % 3 2.3% 5 3.9% Investigational/ Experimental Cases % % % 1 4.0% % % 1 4.0% 1 4.0% Outcome of Independent Medical Review Approval vs. Denial Approximately 60 percent of patient participants in the study had their health plan denials overturned and were approved to receive their requested treatment or service. Approximately 40 percent had their health plan denial upheld. These figures show that our sample was weighted toward those who were approved. The percentages in our study sample differ from the results of all reviews conducted in California during 2001, in which 63 percent of all denials were upheld and 37 percent of all denials were overturned. Nationwide, other states have approved services and treatments on average at a slightly higher rate than California. 3 Complete Study Sample (154 cases) Denial Overturned 60% Denial Upheld 40% Figure 1 Of the 154 cases in this study sample, 25 were cases where an HMO denied a service on grounds that it was experimental or investigational. Of these types of cases, 36 percent were approved Independent Medical Review, Phase II California HealthCare Foundation 16

20 through IMR and 64 percent were denied. The approval/denial rate for these types of cases is almost identical to the rate in California for all cases. The remaining IMR cases were based on the finding that the HMO denied a service based on medical necessity. Of these types of cases, 61 percent were approved and 39 percent were denied. Experimental / Investigational (25 cases) Denial Overturned 36% Denial Upheld 64% Denial Overturned 61% Medical Necessity (129 cases) Figure 2. Figure 3. Denial Upheld 39% Result of Treatment Almost all patients who were approved through IMR received the treatment they had requested and overwhelmingly experienced positive results from it. Patients most frequently noted that the service or treatment had improved the quality of their life. The second most common response was that the treatment enabled them to live longer. Patients specified that positive results included children being able to operate closer to the level of their peers, needing to visit the doctor less often; and maintaining their condition so that it did not become more serious. A very small percentage of patients responded that their condition declined. In spite of these generally positive findings, some patients reported that they had difficulty getting coverage for these approved treatments. A number of patients faced implementation or financial difficulties related to their treatments or services. A summary of patient comments on these issues is included in Additional Findings in Appendix B. Response to Denial of Treatment Among denied patients, IMR had little impact on a patient s belief that the treatment would have been in their best interest. After participating in a review, 76 percent of the denied patients still believed that they should have received the treatment. Close to one-half felt angry that they had gone through IMR. Less than 10 percent understood the reasons why the treatment was denied. In the end, almost a quarter of all denied patients decided to go ahead with the treatment without the health plan paying for it. Understanding the IRO s Final Report Most patients did not have the assistance of a physician to explain the final report. About 80 percent, in fact, did not talk with a physician about the IRO s findings. There is slightly more physician involvement with investigational cases, yet less than one-third of these patients discussed the final report with a physician. Most patients (62 percent), however, said they understood the basis for the decision upon first reading without the assistance of a physician. About one-third of all patients reported that they did not understand the report or they partially understood it. Most of these responses, however, Independent Medical Review, Phase II California HealthCare Foundation 17

21 come from denied patients who explained through their comments that they understood the report literally, but did not understand why the conclusion was reached. Patient Evaluation of the IMR Process Assessment of State Agency Sixty-five percent of patients realized that the DMHC was involved in their independent medical review and most commonly evaluated it favorably for acting in a timely manner. The majority of patients answered on the survey that the DMHC responded quickly to a request for IMR. The second most common response selected was that the DMHC made the IMR occur in a timely manner. Less than one-third of respondents, however, said that the agency helped them understand the IMR process. Very few patients thought that the agency was affiliated with their health plan. Perceptions of Basic Fairness and Conflict of Interest Issues Confidence in the way reviews were conducted was moderate. Confidence in the issues discussed below was fairly evenly distributed between low and high levels. The one clear exception to this pattern was among patients who had investigational/experimental cases. The data for this group presents clear majorities of patients not at all confident in the system. These attitudes existed during Phase I of this study (1999 through 2000) and still persisted in Consideration of Individual Medical Status Patients were very confident or confident by a slight majority (53 percent) that their individual medical status was considered during the review. Eight percent were somewhat confident on this issue, and 35 percent were not at all confident. Confidence levels reversed for patients with investigational/experimental cases. A slight majority (52 percent) said they were not at all confident that their individual medical status was considered, and 16 percent said that they were somewhat confident. Twenty-eight percent said they were very confident or confident that this was true. During Phase I, 47 percent of these patients said that they were not at all confident that their specific medical issues were considered. Confidence that Medical Experts Conducted a Fair and Impartial Review Once again, a slight majority of all patients expressed confidence in this matter. Fifty-one percent said they were confident or very confident that the experts conducted a fair and impartial review. Seven percent were somewhat confident, and 38 percent were not at all confident. Data from investigational/ experimental cases shows confidence levels reversed in this area as well. The slight majority (52 percent) was not at all confident that the experts conducted a fair and impartial review. Twelve percent were somewhat confident, and 32 percent were confident or very confident. During Phase I, 45 percent of these patients were not at all confident that the experts conducted a fair and impartial review. Confidence that Medical Experts Thoroughly Considered Available Scientific Information Patient attitudes were mixed on this topic. Forty-nine percent were confident or very confident on this issue. Eight percent were somewhat confident. Thirty-eight percent were not at all confident that the experts thoroughly considered available scientific information. A majority (52 Independent Medical Review, Phase II California HealthCare Foundation 18

22 percent) of patients with investigational/experimental cases said they were not at all confident; during Phase I, 45 percent of these patients were not at all confident. Responses to Questions 1. Did patients think that the health plan played a role in selecting medical experts who participated in the review? Patient beliefs varied on this question, and no majority of responses emerges. The largest number of patients (41 percent) responded that they did not know if the health plan played a role in selecting the medical experts. Thirty-three percent said that the health plan did not play a role in selecting the experts for their review. Twenty-three percent said they believed their plan did play a role in this aspect of their review. Even among investigational/experimental cases, these percentages remained about the same. Roughly the same percentages held true among patients with investigational/experimental cases who were surveyed during Phase I. During this time period, 46 percent did not know if the health plan played a role in selecting the medical experts 2. Did patients think that the individual(s) who reviewed the case had appropriate expertise? Patient beliefs were mixed on this question as well. Almost one-half (46 percent) said that they thought the individual had the right expertise. Thirty-two (32) percent said they did not have enough information about the expert s knowledge to evaluate that question. Twenty (20) percent indicated that they thought the expert did not have the appropriate expertise to be reviewing the case. When patients explain why the reviewer did not have the right expertise, most said that the wrong expert was assigned. Patient comments included: The reviewer did not have expertise in autism. There were no maternal fetal specialists or perinatologists on the case as needed. IRO doctor who reviewed the case was an endocrinologist; this field had absolutely nothing to do with the medical problem. A majority of investigational/experimental cases said the reviewer did not have the right expertise or that the patient did not have enough information about that expertise to judge. 3. To what extent did the IMR process affect a patient s confidence that the health-plancovered medically necessary services? There was consensus that the IMR process had the net effect of decreasing patient confidence that their health plan covered medically necessary services. The majority of patients, including both medically necessary and investigational/experimental cases, answered this way about 60 percent of the time. Confidence levels changed, however, when comparing responses of approved and denied patients. The majority of approved patients (63 percent) said IMR increased their confidence in this issue, while 89 percent of denied patients said it decreased their confidence that the health plan covered medically necessary services. Independent Medical Review, Phase II California HealthCare Foundation 19

23 Table 4. Responses to To what extent has the independent medical review process affected your confidence that your health plan covers medically necessary services? Total Cases Medically Necessary Cases Investigational/ Experimental Cases Base: Total respondents % % % Increased (net) % % % Increased confidence a great deal % % % Increased confidence somewhat % % % Decreased (NET) % % % Decreased confidence somewhat % % % Decreased confidence a great deal % % % No answer 8 5.2% 5 3.9% 3 12% 4. What parts of the IMR process worked well? When given the opportunity to answer this question in an open-ended format, most patients focused on how well the administrative process served them. Seventy-five percent of all respondents answered this question and close to one-half of their responses concentrated on the administrative process. Patients most frequently praised the speed of the administrative process and the DMHC for providing good assistance. The next most frequently given answers were: Nothing or not much worked well. The patient got the right treatment or right expertise through IMR. IMR handled information correctly by reviewing all the facts or added additional knowledge Few patients said that the independence of the process worked well and fewer still said that the process included their doctor. Independent Medical Review, Phase II California HealthCare Foundation 20

24 5. What should be changed about IMR? Once again, with the opportunity to answer the question in an open-ended format without any preset answer options, patients most frequently said that the IRO should change the way it operates, and particularly the way it selects reviewers. Eighty-nine percent of all respondents answered this question and close to one-third of all responses focused on the way that the IRO operated. Comments included: Use a greater variety of doctors experienced in using new methods. Evaluate the qualifications of reviewers. Select a doctor with more experience in the field being reviewed. Do not hide the qualifications of reviewers. Patients also wanted direct contact with the IRO. Comments included being able to call to ask questions, calling to verify that the correct information had been received, and being able to participate through a hearing process where they could be physically present. The next most frequently given comments were: Nothing should be changed. Change the administrative process by streamlining it. Change the DMHC by improving customer service, enforcing the law, and being more active in the process. 6. What did patients wish they had known before beginning the IMR process? In the last open-ended question, the largest percentage of patients could not identify anything that they wished they had known in the beginning of their IMR experience. Sixty eight percent of all patients answered this question. Almost one-third could not identify any information that would have made the process go more smoothly for them. The next most frequently reported response was that patients wished they had known about IMR earlier. Comments included: Wished they knew about IMR before the grievance process; Wished they knew to request IMR right away ; and Wished they had known about it earlier could have gone to IMR before six appeals. The next most frequently reported responses were: Wished they knew about information gathering and information review requirements; Independent Medical Review, Phase II California HealthCare Foundation 21

25 Wished they knew more about their IMR rights under the law; and Wished they knew more about the details of the IMR process itself. Physicians The majority of physicians (76 percent) participating in this study were in-plan physicians who treated the patient requesting an independent medical review. Fourteen percent were out-of-plan physicians. About two-thirds of these respondents were specialists and one-third were primary care physicians. A small percentage (8 percent) were specialists who would have provided treatment if the IMR was approved. Knowledge of Independent Medical Review Few physicians knew about independent medical review before one of their patients had a case referred to it. Seventy-six percent of all physicians said they did not know about the law that required health plans to make external review available for certain types of patients. Several of those who did have knowledge of IMR before having a direct experience were either vague or unsure about their source of information. Small numbers learned about it through previous patients, professional societies, or their medical group. No one cited another physician as a first source of information. The data suggests that there was no one common time when physicians learned that IMR was an option for their patient. About one-third of the time, physicians reported they only knew IMR was an option after they had received the survey from IMQ, quite some time after the review had taken place. About one-third of the time they learned about it when a patient told them. Somewhat less than one-third learned from a health plan, either during the grievance process or when the plan advised them it had sent the case for review. In general, physicians usually did not play an active role in the independent medical review. In the beginning of the process, only about one-half were informed and knew that the patient had initiated IMR. Slightly less than one-half were active in helping the patient prepare information or records to be sent to the IRO beyond that which may have been submitted for the plan s grievance process. Once a final decision was reached, slightly less than one-half discussed the final report with the patient. Physicians most often summarized their experience during IMR as not being directly involved with the process. Thirty-seven percent responded this way and gave responses such as had no direct contact with the process or didn t know the review was going on and was not part of the process. A smaller percentage of physicians characterized their experience differently. Twenty-seven percent of responding physicians said that they had all the information necessary to assist their patient during IMR; 20 percent did not answer this question; and 10 percent said their experience was marked by the health plan making demands on their time and on the office staff. Outcome of IMR Physicians reported that more of their patients treatment options were approved than denied, although many answered that they did not know the final result of the IMR. Thirty-eight percent Independent Medical Review, Phase II California HealthCare Foundation 22

26 of the physicians said that their patients treatments were approved and 22 percent said they were denied. Thirty-five percent did not know the outcome of the review. Physicians overwhelmingly said that patients had positive results after receiving treatments approved through IMR and that a majority of patients received IMR-approved treatments. A large percentage of doctors (82 percent) said that these services improved or sustained the patient s quality of life. Eleven percent said it enabled the patient to live longer. Very few stated that it resulted in decline of the patient s health. A significant majority of physicians did not agree with final IMR decisions that denied treatment or services for their patients. Sixty-seven percent of all physicians did not agree with a denial, and an additional 33 percent felt that the patient wasted time going through IMR. A very small number of physicians gained better understanding of the clinical reasons for not approving the treatment and one physician believed that the original denial was appropriate. IMR did not appear to change the way most physicians made future treatment decisions. The denial or approval of services through the IMR process caused only six percent of the physicians to reconsider the efficacy of certain treatments for future patients. If physicians had access to the results of all IMRs, not just for their specific patient; the majority of physicians stated that it was still not at all likely or only somewhat likely to influence recommendations of a particular treatment. This may be due to the fact that physicians most frequently expressed little or no confidence that decisions made through IMR were based on the most current scientific information. Evaluation of IMR Expectations going into the process were mixed. When IMR was initiated, a very small percentage (4 percent), thought it was very likely that the denial would be overturned. Approximately one quarter each thought it was likely or somewhat likely that the denial would be overturned. A small percentage (14 percent) considered it not at all likely. One-quarter of all physician respondents did not answer this question. Most physicians lacked the information or knowledge to judge whether the review was truly independent. Almost 70 percent, for example, did not know if the health plan played a role in selecting the medical experts for the IMR. While some doctors reported confidence that there was an independent and neutral assessment of the patients specific medical issues, the greatest number replied that they had insufficient information to make this evaluation. To a large extent, the IMR process had no impact on physician trust in health plans. Sixty percent said that the process had no impact on trust, with the balance leaning slightly more toward reducing it rather than increasing it. There was most likely little impact on trust due to the general lack of physician awareness of the process and how it worked. Physicians were not able to assess the DMHC as the administrator of the IMR process because most did not have any interaction with the agency. The majority were unable to state whether the DMHC was helpful in facilitating the process because they had no contact with it. Independent Medical Review, Phase II California HealthCare Foundation 23

27 When physicians were asked to rate certain features of the system, a significant majority considered three elements to be very important to an effective IMR process: 76 percent said it was very important that medical experts not be affiliated with nor have significant financial interest in the plan, facility, or pharmaceuticals related to the review. 74 percent said it was very important that the review be based on the patient s specific situation and whether the proposed treatment will be beneficial. 70 percent said it was very important that the health plan be required to provide treatment if medical experts determined it would be helpful. A smaller majority considered these features as very important to an effective process: 57 percent said it was very important that expert findings be supported by medical and scientific evidence. 55 percent said it was very important that IRO performance be monitored by an independent professional organization to make sure reviews were conducted appropriately and experts were qualified. The importance ranking decreases when it comes to having a state regulator oversee the process: 27 percent said it was very important that a state regulator oversee the independent medical review process. Responses to Questions 1. What should be changed about the process? When given the opportunity to express their opinion without preset answer options, physicians expressed interest in a review that was broader, considered more updated information, and used appropriate experts. They also encouraged more openness to the IRO process. Seventy-five percent of the physicians answered this question and one-quarter of all comments focused on the IRO review process. Comments included: Reviewers seem to give opinions based on data that they review and their personal knowledge. They seem to limit their review to medical records and published data; some important information is not yet published at the time of the review. The review should examine types of restrictions plans place on developmental services. Basing health plan services on adult rehabilitation ignores children s developmental needs. The plan s capitated agreements influence their decisions even though the newer procedure is lower in cost and more effective. The reviewer should consider and understand this newer procedure. The IRO report left me uncertain of the qualifications of the reviewer but it was clear that the benefits of the newer procedure were not understood. (paraphrased) Independent Medical Review, Phase II California HealthCare Foundation 24

28 I don t know what experience reviewers have in treating these types of cases; their identity is a mystery. Physicians should work together to help patients. The next most common suggestions were: Speed up and streamline the process; Don t know or have an idea about what should be changed; and Needs more enforcement in terms of paying for approved services. 2. What worked well about the process? In an open-ended format without pre-set answer options, doctors most often identified the fact that IMR allowed the patient to receive a treatment that worked well. Eighty percent of all physician respondents answered this question, and those answering most often felt that the IMR process allowed their patients to receive treatment. Comments included: Process resulted in approval of needed services; Patient received needed care; and Allowed access to experimental therapy where there was no standard treatment. The next most frequently given responses were: Could not evaluate or did not know what worked well about IMR; and IMR existed as a forum for hearing cases. Plans Knowledge and Distribution of IMR Information All plans reported that they displayed written information concerning the right of a patient to request IMR on letters of denial. Not all plans, however, reported that they include IMR information in all places required by law. The law requires information concerning the right of a patient to request IMR to be printed in every plan member handbook or relevant informational brochure, in every plan contract, on enrollee evidence-of-coverage forms, on copies of plan procedures for resolving grievances, on letters of denials issued by the plan or its contracting organization, on required grievance forms, and on all written responses to grievances. All seven plans said they included this written information on letters of denial. Six plans said they included it in their member handbook, on evidence of coverage (EOC), and on written responses to grievances. Three plans included it in their plan contract. Only two plans included it on grievance forms. One plan included it in an informational brochure that was relevant to IMR. Although not required in 2001, two plans put it in a member newsletter, and one posted information on its Web site. Independent Medical Review, Phase II California HealthCare Foundation 25

29 IMR information is required to be displayed during the denial and grievance process. Plan responses indicate that it is included most of the time at the end of the grievance process. Only two of the seven plans say it was included on grievance forms, but six out of seven indicated that it was included at the end of the grievance process on written responses to the actual proceeding. While all plans include IMR information on denial letters, three plans said all denials letters contained it, and two plans did not include it on every denial letter. One of these two plans sent multiple denial letters to its patients during 2001 and did not include IMR information on each denial letter. Patients, for example, could have received a denial letter in one month without IMR information and then received a subsequent denial in the following month that did contain IMR information. Two plans did not answer whether all of their denial letters contained IMR information. All plans provided employee training regarding the availability of IMR. Information regarding the availability of IMR was disseminated among plan employees most commonly through initial employee training and during company training sessions and in company memorandums. Internal Health Plan Function before IMR The majority of plans first notified patients of the availability of IMR for their own specific case on the initial denial letter. Four of the seven plans said it notified patients about IMR on an initial denial letter. One plan stated that the patient was first notified that IMR was an option for a specific denial upon disposition of a grievance. Similarly, another plan said notification came following an uphold of a denial. Most plans reported that denials were made in writing and performed in an expeditious manner. Five of the seven plans required written denials. Two plans did not require written denials. All health plans reported that the average amount of time between a patient s request for service and a written denial was less than one month. No plans reported that this time period went beyond two months, and two did not know what the longest amount of time was between a patient s request for service and a written health plan denial. All seven plans report patients were informed that the grievance process was available as an internal appeal mechanism on the denial letter. Two plans cited other information as well that gave patients grievance information. These other sources of information included fliers, newsletters, the EOC, Web site information, and verbal notification to members. Plans most frequently notified patients of the 30-day time limit for participating in a grievance at the end of the grievance process. Five of the seven plans reported that notification came at the end of the grievance process, four plans said at the beginning of the process (one plan marked both beginning and end), and two plans say that the patient was notified of this time limit at other times. One plan, for example, said it informed patients of this time limit in its EOC, newsletter, and Web site. One plan said it notified patients at the time of the initial denial. Plan Function during IMR Plans indicated that they usually sent the same information to the IRO that they used for the grievance process, but sometimes sent additional information if more became available from the patient or doctor. Six plans said the identical information that was used during the grievance was Independent Medical Review, Phase II California HealthCare Foundation 26

30 sent to the IRO. Four plans said, however, that additional information was sometimes sent, depending on the situation. One said the amount of information it sent varied, but only if further information was received. No plan reported that less information than was used in the grievance process was sent to the IRO. Only two plans notified the patient of what information was being sent to the IRO for the review. One plan indicated that this was accomplished verbally, and one plan said it was done in writing. The statute requires that the plan notify the patient that it has submitted all required information to the IRO. Plan notice is to include an annotated list of documents sent to the IRO. Plans must offer copies of the records to the patient if desired. To make sure that information was submitted within legislated time frames, plans either provided written guidelines to its contracted providers, designated plan staff to manage each case, or handled this in a case-specific way. Plan Function after IMR Is Completed All plans except for one reported that all services approved through IMR were promptly authorized within the legislated time frame. Plans are required under law to authorize services within five working days of receipt of the written decision from the DMHC director. Five plans reported that authorization took place in three to five days. One plan said authorization took place in three days or less. One plan said six to ten days passed, on average, before the service was authorized. Although plans reported prompt authorization, it appears that there may be some gap between authorization and actually rendering the service. Patient narratives illustrated that some had difficulty obtaining the approved service because the plan continued to deny the service, treatment, or drug even after the IMR process had approved it. Some patients said the plan was reluctant or even refused to provide the service. Patients also reported that IMR approval did not necessarily mean that the plan would pay for the approved service or pay without significant delays. A summary of patient comments on these particular enforcement issues is included under Additional Findings in Appendix B. Plans most frequently said they knew an IMR decision had been implemented through the authorization process. Three plans cited the authorization process as their means of verification. Two plans designated a staff person to verify that services were received, although it is not clear how that verification took place. One plan verified compliance with delegated entities. One plan noted that they used encounter data from the IPA and verification calls from providers and members. Two plans said there was no verification process during this time period (one of them said a process has since been put into place). It is noteworthy that no plan said it directly contacted the patient or the physician for verification. The majority of plans thought that they should not be required to report clinical outcomes of IMR treatments or services, but thought it might change their internal decision making if they had more clinical information. Five out of seven plans said they should not be required to do this. Independent Medical Review, Phase II California HealthCare Foundation 27

31 Two were not sure if they should be required. A majority, however, thought this clinical information might impact or would impact the plan a great deal if they had it. Impact of IMR on Plan Operations and Policies All plans except for one report that the results of its own IMR cases influenced their internal medical policy and coverage decisions. Plans noted a variety of areas that had changed. These included: Bariatric (gastric bypass) surgery; Drug criteria; Breast surgery; Chiropractic and physical therapy treatments; and Oral-maxillofacial procedures. Changes in these areas were explained in these ways: One plan reported that information from IMR cases was reviewed and taken into consideration when the medical group revised its clinical guidelines for gastric bypass surgery. One plan said it was experiencing fewer denials for breast surgery (for asymmetry and reductions) that had previously been considered cosmetic. One plan changed its clinical guidelines to include a psychological clearance for bariatric surgery. It also reviewed its clinical guidelines for approving certain drugs such as Viagra and insulin pens. IMR also caused the plan to look at its benefit structure in relation to chiropractic, speech therapy, and oral-maxillofacial services. One plan noted that consistent overturns on emerging technologies and drug criteria had influenced internal medical policy. Plans identified a certain component of IMR information that was missing that would probably have influenced their internal policies. All seven plans said that if they had an explanation of the literature and evidence that was the basis for the decision, this would have been likely to influence the plan s medical policy or coverage decisions. Three of the seven plans then cited the following IMR information that, if they had had it, would have influenced their plan s internal policies: Greater explanation of expert qualifications; Final clinical outcomes for all patients going through the IMR process; and Uphold/denial rates for all IMRs. Independent Medical Review, Phase II California HealthCare Foundation 28

32 Plans believe that the IMRs had an impact on plan policies and operations during 2001 in mainly positive ways. A majority five of seven plans said IMR helped them look at emerging health trends and strengthened their internal review process. Four of the seven plans said that IMRs provided additional expertise in deciding appropriateness of patient services, streamlined the external review process, and decreased liability risk. Two plans considered that it provided a positive public image. IMR impacted plans in some negative ways as well. Three plans agreed that it increased expenses. One plan said it adversely affected their public image, and one plan believed that it provided no additional expertise in deciding appropriateness of patient services. Evaluation of IMR The majority of plans (five of seven) agreed that IRO decisions were clear and well explained most of the time. Two plans said the IRO decisions were clear and well explained some of the time. The plans were almost evenly divided about knowing whom to contact at the DMHC if they had questions about the IRO decision. Three plans said they knew whom to contact and identified their resources within the agency as being an IMR project manager, an attorney, and a medical director. One plan said it contacted a director at the IRO directly. Three plans said they did not know whom to contact at the DMHC. One plan made no attempt to clarify IRO reports. All plans believed that it was very important or important to have an independent physician entity review the IRO. Four of the seven plans consider it very important to have an independent physician panel randomly review IRO cases to assess qualifications of IRO experts, appropriate literature reviews, and compliance with conflict-of-interest provisions. Three plans consider this important in having an effective IMR process. The plans were generally positive about the DMHC s role as administrator of the IMR process during Four of the seven plans regarded the agency as an independent regulator of the process. Two plans said it helped IMR occur in a timely manner and provided clear guidelines on what was needed from the plan. No plan reported that it delayed the IMR process. Four plans said it placed administrative burdens on them. One plan said its guidelines were unclear on what was needed from the plan and one considered it biased in its application of the process. A majority thought that the use of a single IRO did not impact the process by either improving it or worsening it. Four plans out of seven felt that using one IRO made no difference to the process. Two plans felt that using a single IRO either moderately worsened or significantly worsened it. These two plans felt that the quality of the reviewers used by CHDR was not as high as those used by their previous IRO, which provided more detailed explanation of the decision. One plan said it significantly improved the IMR process because it provided uniformity, thus making it administratively easier to handle IMR cases. The majority of plans agreed that the new state laws effective in 2001 strengthened IMR by requiring greater disclosure, but weakened the process by eliminating IRO accreditation, reducing oversight, and loosening requirements for the types of literature to be included in the Independent Medical Review, Phase II California HealthCare Foundation 29

33 review. Six of the seven plans said that greater disclosure of IMR either strengthened the process a great deal or strengthened it somewhat. One plan did not answer this question. Four of the seven plans said that the following weakened the process somewhat or a great deal: Not requiring IRO accreditation; No longer requiring IRO oversight; and Allowing literature reviews to become less restrictive. Plans thought the process was not impacted or slightly less impacted by the following: Plan no longer contracting with the IRO; and Number of expert IRO panelists changing from three to one for medical necessity cases (three plans said this had no impact, two plans said it weakened the process somewhat). There was no clear consensus among the plans regarding the way in which IMR had affected patient trust in the plan. The data were fairly equally distributed on the scale, with no one reporting that trust increased greatly or was reduced greatly. Two plans thought trust was increased somewhat. Two plans thought it had no impact on trust. One plan thought it reduced trust somewhat. Two plans were unable to assess impact on trust. Responses to Questions 1. What worked well about IMR? Plan responses were fairly equally divided on the question of which components of IMR worked well during In general, plans pointed to reduced perceptions of bias, reduction in liability, and parts of IRO process that worked well. Comments from each plan were as follows: One plan said that the IMR process gave members a chance to form an unbiased opinion (although the process itself implied that the plan decision might indeed be biased). This plan thought that IMR was effective for members and that sometimes it supported the plan s position and decisions. One plan reported that IMR reviews decreased overall arbitration and litigation risk. One plan reported the IRO overturn notification was timely and clear and that it was responsive to the plan follow-up inquiry when needed. Independent Medical Review, Phase II California HealthCare Foundation 30

34 One plan reported that IMR provided a focus on integrated care by taking an overall view of clinical issues and the coordinated care sometimes required from other specialties. The IRO also provided guidance by notifying the plan about which type of specialist was reviewing the case. Three plans did not answer this question. 2. What should be changed? Plans almost universally agreed that changes were needed in regard to the way that the IRO operates. Many of the comments revolved around the IRO providing evidence to support decisions and around selection of the reviewer. Five of the seven plans recommended changes within the IRO process. Two plans did not respond to this question. Comments from each plan were as follows: One plan cited a need for an appeal process for the plan when there were disputes about the integrity of the IMR reviewer. The respondent also suggested not using a canned response letter when not applicable to the situation. One plan wanted the DMHC to follow the statute and require physicians to provide literature to justify qualification for investigational/experimental reviews and also require the reviewer on these cases to cite evidence. It also wanted to have a mechanism for providing feedback on poor quality reviews. One plan felt the IRO sometimes poorly selected IMR reviewers. Nontraditional providers were used who ultimately might overturn decisions that are not based on recognized clinical evidence or standards of care. One plan recommended that there be a process initiated to allow feedback from the medical group to the IRO regarding outcome of cases. If the case is overturned, and it results in a poor outcome, the physician would like to have an opportunity to share this information to help prevent needless suffering for future patients. One plan suggested that it be given a contact person at the IRO for issue clarification and closure and for resolution of overturns that had a contingency attached to them. For example, the plan wanted guidelines in the situation where a psychological clearance was required before an approved service was to be rendered and wanted to know what steps should be taken if the patient did not receive the clearance. Analysis Comparing Perceptions of Approved Patients vs. Denied Patients The outcome of the IMR played an influential role in the patient s perception of IMR. When totals are filtered by comparing approved responses to denied responses, the data illustrate that both groups report relatively the same experience at the beginning of the process. For example, the majority of both groups Learned about IMR during the denial process from denial letters; Independent Medical Review, Phase II California HealthCare Foundation 31

35 Reported that their grievance took longer than 30 days to complete; Personally sent information into the review; and Were confident in their ability to support their case and had strong expectations that their denial would be overturned. But perceptions among denied patients changed most significantly in contrast to approved patients when they assessed the way that the review was conducted. Denied patients expressed a lack of confidence that they had received an objective hearing because they: Did not seem to know that an important safeguard was in place to protect the decisionmaking process (independence of the experts); Were not sure that they were treated as individuals; and Were not confident that the appropriate experts were selected or that they considered all available scientific information. Table 5. Comparative Perceptions of IMR by Approved Patients vs. Denied Patients Question Response Approved Patients Denied Patients Do you think that the health plan played a role in selecting the medical experts who participated in the independent medical review? How confident are you that your individual medical status was considered during the independent medical review? (net*) How confident are you that the medical experts thoroughly considered available scientific information? (net*) Do you think the individuals who reviewed your case had the appropriate expertise? How confident are you that the medical experts conducted a fair and impartial review? (net*) Yes 9% 42% Confident 86% 9% Confident 82% 6% Yes 72% 11% Confident 84% 6% * Net was calculated by combining very confident and confident answers. Percentages for somewhat confident were very low and varied slightly (1 2%) between approved and denied patients. Going through the process did not seem to give denied patients peace of mind that the decision was sound; not a single patient said they understood why the treatment was denied. The most common response after receiving a denial was that patients believed they still should have received the treatment; the next most common response was that they felt angry that they had to go through the process. It is not clear if patients would perceive independent review Independent Medical Review, Phase II California HealthCare Foundation 32

36 differently if they had more information about it and understood it better. Human nature may prevail: losing or winning naturally colors a patient s perception of the process. It is noteworthy, however, that significant numbers of patients (both approved and denied) did not know whether the medical experts were selected by their health plan. This is a basic premise of the entire system, and yet a healthy dose of uncertainty persists. Perhaps confidence in the system would be increased if patients were sure this safeguard was in place while their case was being heard; this might eliminate some thoughts that IMR was a rubber-stamp of the plan s decision. Comparing Experiences of Medical Necessity Patients vs. Investigational/Experimental Patients The data diverge for investigational/experimental patients in two important areas. Medical necessity cases in our study sample were approved almost twice as often as investigational/ experimental (I/E) cases. This may be due to the fact that I/E cases are reviewed under stricter guidelines. Medical evidence to support decisions in I/E cases must, for example, be supported by peer reviewed medical and scientific evidence, medical journals, or studies conducted under the auspices of selected federal agencies or by certain listed drug reference compendia. Medical necessity reviews are more expansive. They can include expert opinion, generally accepted standards of medical practice, and consideration of whether treatments are likely to prove a benefit to a patient when other treatments are not clinically effective. I/E patients also expressed lower confidence in their ability to support their case; they said in greater numbers that information was not available to them explaining how to support their case and how to submit information into the review. They also had lower expectations going into the process and were less satisfied with the time it took to receive results. These findings might be attributed to the fact that it is more difficult to find information in the public domain about cutting-edge treatments or emerging technology, and, if found, it must fit the stricter criteria of the I/E review standards. Satisfaction with time frames may be influenced by the fact that it is more difficult to wait for decisions when seriously ill. Impact on Patient Confidence in Health Plans For a majority of patients as well, trust and confidence that their health plan covered medically necessary services was not increased by the existence of independent medical review. As discussed earlier, significant numbers of patients, both approved and denied, did not know whether the medical experts were selected by their health plans. Patients continued to question the independence of the process and had moderate levels of trust and confidence in the way in which reviews were conducted. Patients who received approvals through this process have pointed out that going through a long administrative process and receiving the approval proved that the plan was not providing medically necessary services. Going through a long internal and external review process to obtain what was appropriate in the first place did not build trust in the plan. Independent Medical Review, Phase II California HealthCare Foundation 33

37 Comparisons to Phase I Experiences: Trends and Changes over the Life of the Program Medical Necessity Cases vs. Investigational/Experimental Cases The number of investigational/experimental reviews dropped during 2001 by about 20 percent (35 fewer reviews were conducted), and the denial rate rose considerably, from 60 percent to 80 percent. Assuming patients presented with roughly the same number and severity of serious illnesses in 2001 as they did in 2000, these changes might be attributed to two factors: the introduction of the DMHC into the process and the fact that one IRO reviewed these cases instead of multiple IROs. Under the DMHC, the administration of the process changed, meaning that patients now had to apply for IMR through a state agency and not through their health plan. The pathway to IMR is less distinct for patients with investigational/experimental cases, and the new layer might have further complicated the process. These patients, for example, have the option of going through the plan s grievance process as a means of resolving their dispute. Most elect to do so, but it is unclear whether patients realize that this is not required. Furthermore, patients who do not participate in a grievance do not receive an application for IMR at the end of the grievance proceeding as do medical necessity patients. They are advised of their right to request IMR, but must contact the DMHC, an unknown entity for most patients, to request an application. Patients in effect might have received less help, at least administratively, from their health plan in navigating the process. During Phase I, the health plan contracted directly with the IRO and served as administrator of the process. Plans had more direct involvement with the paperwork and the entire process itself from beginning to end. During this second phase, patients had to navigate the process on their own. This may have been a difficult transition in light of some experiences discussed earlier, especially for patients who had to wind their way through the system during a serious illness. The Center for Health Dispute Resolution (CHDR), under contract with the DMHC, conducted all IMRs in 2001 except for one. It is possible that this IRO may have approached investigational/experimental cases differently from IROs in the past. For example, the IRO may have staffed its panels differently or performed literature searches in a different manner, resulting in different approval/denial rates. Additionally, their cases were not subject to external review. Because IMR was established to help the most vulnerable patients, the significant decrease in numbers of investigational/experimental reviews being requested suggest that the reasons for this decrease in utilization should be considered for further study. Changes in consumer awareness of the availability of IMR Under the expanded scope of independent medical review, every health plan was required, effective January 1, 2001, to prominently display information about a patient s right to request IMR. This information was to be in every plan member handbook or relevant informational brochure, in every plan contract, on EOC forms, on denial letters, grievance forms, and paperwork. During Phase I, notification of IMR was limited to the EOC and specific disclosure forms. It is generally accepted, however, that patients rarely read their plan information in its entirety, and the DMHC has acknowledged facing a challenge in timing their educational activities to Independent Medical Review, Phase II California HealthCare Foundation 34

38 reach patients when the information is pertinent to their individual situation. The data suggest that despite required displays of information, communication, or outreach activities; patient awareness of IMR has remained essentially the same over both phases. Activities or communications that target patients before they are in a position to consider IMR as an option have little impact. (Recognizing this problem, the DMHC has engaged in a three-phase outreach during 2002 to increase patient and physican knowledge of IMR availability. A total of 878 organizations were contacted by or on behalf of the agency, including more than 150 medical groups, employer benefits advisors, unions, consumer groups, case management groups, provider associations, and health advocacy centers. In August 2002, a provider-focused area dedicated to IMR issues confronted by health care providers was incorporated into the DMHC Web site.) This study was not conducted in languages other than English. There are no data to show whether limited English proficient patients are aware of IMR and accessing the IMR system successfully. Plan denial notices and other communications with these patients may need to be in languages other than English to ensure reaching those patients. Further study is needed to determine how cultural or languages differences impact patient experiences in reaching IMR and utilization of the IMR process. Utilization of IMR California has fashioned a program that gives patients relatively easy access to independent medical review. Eligibility is fairly broadly drawn for medical necessity cases, allowing greater access to the system. The definition of whether a treatment is investigational/experimental is not left up to the health plans, but is determined by the DMHC so as not to restrict access because of the way in which a treatment is categorized. There is no dollar threshold required for initiating IMR, and no application fee of any kind. State law gives the patient generous amounts of time to request IMR and provides speedy implementation of it through the DMHC, which staffs an HMO Help Center for patients that is open 24 hours, seven days a week. Furthermore, going through IMR in California helps preserve a patient s statutory right to pursue further legal action regarding a disputed health care service. This access to independent medical review does not translate into large numbers of cases. During this study period, about 20 million people in the state were enrolled in managed health care plans: 4 Six hundred sixty-one reviews were completed. This equals less than one percent of the managed health care population. The question has been asked whether the small number of people reaching IMR has been limited by the health plans grievance procedures. The study shows evidence that patients may be stalled in the grievance process on their way to IMR. Only about one-half, for example, reported that their grievance was completed within 30 days. Patients are eligible after 30 days to apply for IMR, but the majority seemed to have inadequate knowledge of when the clock started and stopped on this 30-day time period. This suggests patients may be staying in the grievance process longer than is needed. Patient surveys also indicated that several went through multiple appeal levels before they realized IMR was an option. A prolonged internal review process brings into question whether the patient has the time and energy to continue to the next step. There is some preliminary evidence that both the denial and the grievance process may lengthen or complicate the path to IMR. A significant majority (70 percent) of all patients completing a Independent Medical Review, Phase II California HealthCare Foundation 35

39 survey by telephone reported difficulty with their denial that negatively impacted their ability to reach IMR and the time it took to get there. The most common response was that patients received multiple denials and then did not have a clear idea of how to proceed after a denial. Complaints about denials included: Receiving multiple denials and only being informed of IMR after the first denial; Plan approving then denying a service; Unsatisfactory interaction with the plan during the denial process (e.g., the plan notifies the patient that no further appeals are available beyond the plan denial); Changing the basis for a denial; and Not knowing why a service was denied. The patient survey did not ask specific questions about a patient s experience with the denial process. It focused three questions on grievance timeframes and patient knowledge of these timeframes. Nonetheless, patients consistently included in their narratives their experience with the denial process as a precursor to IMR. Written surveys also contained additional comments on the denial process in open-ended questions. Although certain patterns emerge, the data may be too limited to draw conclusions that apply to all survey respondents. Further study of the denial and grievance process is advised. A complete list of patient responses in regard to denials is outlined in Appendix C. The low utilization rate could result from other factors as well. It is possible that patients are not challenging denials in large numbers. IMQ attempted to find out how many patients were challenging health plan denials by filing grievances with their plan; IMQ then compared that number to the total number of IMR cases per health plan. The number of patients who had their grievances resolved (denial overturned) was also requested. The balance remaining would represent the pool of patients eligible to request IMR. It was difficult to ascertain whether this number was close to each plan s IMR caseload because plans collect and categorize grievance data differently. Reporting requirements do not appear uniform and grievance data that is collected is not available to the public for research purposes. Accordingly, IMQ cannot be sure that the data collected on this issue is precise or significant as it pertains to all plans participating in IMR. From the data that was collected, it appears that patients are challenging their health plan in much greater numbers than are reaching IMR. In some plans, it appears that patients are filing grievances in the thousands to appeal a denial, claiming that their treatment was not medically necessary or was considered investigational/experimental. During the grievance process, these plans are overturning their denials on average from 40 to 50 percent of the time. That still leaves cases numbering in the thousands that are potential IMR cases. Yet the highest number of IMR cases among these plans is in the low hundreds, and usually below 100 cases. This preliminary data suggest that there are more potential IMR cases than are currently going through the system. Independent Medical Review, Phase II California HealthCare Foundation 36

40 Table 6. Grievances Reaching IMR in Various Plans Plan 1 Plan 5 Plan 7 Plan 6 Grievances based on MN or I/E in ,847 4,247 3, Denials overturned during grievance 1,335 1,699 1, Overturn rate 47% 40% 40% 50% Remaining cases that are potential IMR cases 1,512 2,548 1, Cases that reached IMR Percentage of potential cases reaching IMR 4% 6% 3% 25% Additionally, it should be noted that different models of health care delivery affect the utilization of IMR. IPAs, closed-staff models, and delegated medical groups have different methods for making medical decisions and different financial incentives. It must be noted that financial incentives inherent in prospective payment are present throughout managed health care, regardless of model. Utilization of IMR is also reduced because few Preferred Provider Organization (PPO) patients use the system. Depending on the type of contract held, PPO patients in California have the right to an external review by applying either to the DMHC or Department of Insurance (DOI). The DMHC did not accept IMR applications during 2001 if the treatment already had been rendered. Most PPO services are rendered before they are paid for in contrast to HMO patients, which effectively eliminates PPO patients from the same protection and rights as other managed care patients. Enforcement Issues IMQ found through this study that patients sometimes face obstacles in receiving services or treatments after receiving IMR approval. Although the survey did not question patients about their experience after IMR, responses about problems during the time period after review were offered during the course of telephone interviews. Once a trend became apparent, all telephone respondents were asked their general experience following the final decision of their IMR. Additional comments in smaller numbers came from patients responding by written survey. A little over one half (56 percent) of all patients who received approval and completed their survey by telephone reported that they either had difficulty obtaining the approved services or difficulty getting the plan to pay for the service. A complete list of these additional findings can be found in Appendix B under Additional Findings. Most of the complaints revolve around the medical group or plan not implementing the decision. Experiences included: A clinic refused to provide IMR-approved services. A clinic physician stated that he didn t care what IMR said and that the patient had to try something else first. The clinic cancelled the patient s appointment to make referral to a surgeon who would perform IMR-approved service. Independent Medical Review, Phase II California HealthCare Foundation 37

41 A patient faced a huge bureaucracy and resistance from the plan in providing service. The patient s wife was told that they didn t have the resources (enough nurses) to comply with IMR. It took repeated calls, attempts and, eventually lawyers, fines, and the DMHC, to get the service many months later. A patient was still battling with a plan one year after IMR because the plan would not comply with the IMR decision. Difficulty obtaining the approved service was also related to patients continuing to receive denials after the IMR process was completed. Experiences included: Services or medications being provided for a period of time and then being denied; and Plans denying ongoing treatment and patients repeatedly needing to contact the DMHC to get the IMR enforced. Patients experienced problems on the financial front as well. A common problem was late or delayed reimbursement for IMR-approved services. A few patients reported that even though continuous coverage was specified in the approval, the plan stopped payment after a few months. One patient hired an attorney who, in a very drawn-out process, had to call the plan each time a reimbursement was due. Some of these enforcement issues might be attributed to plans not having sufficient verification systems in place to track implementation of IMR decisions. Although all but one of the plans participating in this study said they had such a process in place, it is unclear whether plans followed-up with the patient beyond the authorization process to see whether services had been rendered and subsequent payment was actually made. The DMHC, once notified of these implementation problems, sent out questionnaires to confirm that services were indeed rendered. DMHC is considering its role in following up on future cases. (The DMHC now provides a name, phone number, and address in each adoption order to respond to any questions or problems regarding the plan s implementation of the IMR determination.) Several compliance complaints were noted somewhat earlier in the process, directly after IMR had been initiated. These included: A plan not complying with a patient request to see the information it sent to the IRO; A plan not sending all the necessary information so the review could begin; and DMHC not enforcing legal standards as they applied to the IRO (the patient s father in this case said the IRO refused to consider legally qualified scientific information and the reviewer consulted with an expert when the reviewer should have been the expert). Independent Medical Review, Phase II California HealthCare Foundation 38

42 III. Recommendations Based on the preceding findings and analysis, this report recommends the following steps to improve the quality of independent medical review and make it more accessible and effective. Patients 1. Formalize the process leading up to independent medical review. 5 Evidence suggests that the denial and grievance process lengthened or complicated the path to IMR. Making sure patients are given the basis for a denial and have clear guidelines regarding how much time is required in internal review will streamline the process and let patients reach IMR more rapidly. State the basis for a denial on written notices to eliminate due process concerns. This will eliminate confusion in appealing a denial. It is difficult to build a case when reasons for the denial are unknown or are changing. State the basis for the denial in the same terminology used by all parties (i.e., plans, DMHC, and IRO) to establish consistency on all denial notices. This makes the process more seamless for the patient by reducing the need to interpret the differences in terms used by the plan, DMHC, and IRO. Advise patients at the beginning of the grievance process that they may apply for IMR if the case remains unresolved after 30 days. Clearly date the beginning of the grievance period. Patients have inadequate knowledge of the time required at the plan level before proceeding to IMR. Advising patients of time frames when starting the grievance process is central to reaching IMR in a timely manner. Notify investigational/experimental patients that the grievance process is optional. Clarifying the path to IMR will assist the most seriously ill patients. 2. Focus IMR notification and IMR instructions on the denial letter. This study shows that health plan denial letters were the most common source of information about patients cases. Since most patients did not have knowledge of IMR before they had an Independent Medical Review, Phase II California HealthCare Foundation 39

43 individual case, pinpointing educational activities at the denial stage reaches patients at the next earliest level and helps them proceed from there. Put IMR information on all denial letters that were based on a medical necessity or investigational/experimental finding. Notifying patients on each denial letter is critical to reaching patients with IMR information as early as possible. Give simple, clear steps that patients can take after receiving a denial. 3. Assist patients in submitting information to the review. Patients wanted to take an active role and a large majority personally submitted information to the process. Clearly stating opportunities to submit information gives patients the opportunity to balance the information being reviewed. Figures show, however, that patient confidence was low when it came to knowing how and where to find information about their case. Move information that advises patients of this right from the back of the IMR application into a more prominent place on the front of the document. Assist patients, especially those with investigational/experimental issues, in knowing where to locate information to support their case. 4. Provide a more open IRO process. Patients, plans, and physician respondents all focus on a more open IRO process when recommending changes to make the system more effective. The following were suggested to make the system more credible. Notify patients of what information is being sent to the IRO for review. Consider requiring that the IRO contact the patient before the review begins to verify that patients agree that the correct records are being reviewed. Advise the patient of the specialty of the reviewer before the review begins. Give a fuller explanation of the reviewer s qualifications. Consider more than one expert on a panel so that different schools of thought are represented. Give the patient s physician access to the reviewer to discuss the case. 5. Provide follow-up support for patients after their IMR. Enforcement problems were identified by this study. Some patients experienced difficulty obtaining IMR-approved services. Therefore, it is important to verify with the patient that IMR has been implemented. Independent Medical Review, Phase II California HealthCare Foundation 40

44 Physicians Physician responses show that they were not well integrated into the process. The figures show that they often were not informed that IMR had been initiated nor were they aware of the results. To better involve physicians in the process: Locate effective sources of information that would reach physicians to inform them of the availability of IMR. Inform physicians when an IMR has been initiated. Give physicians access to the reviewer so that physicians can be effective advocates. Make sure there is a feedback loop that includes the actual outcomes of IMRs. Request that physicians report clinical results of the IMR so they have impact on the review process. Plans This report shows that plans believe IMR has a generally positive effect on their policies and operations. Certain components of IMR information were missing, however, which might help make the process more effective for the plan and for improving the process in general. Offer plans information to understand the criteria and the literature by which IRO decisions are being made. Formalize a system that allows plans to participate in a feedback loop so that final outcomes can be added back into the system, impacting future decision making. Design a follow-up process to directly verify with patients that they have received IMRapproved services. DMHC Figures in this study show that patients increasingly are using the DMHC as a source of information about IMR. This study also shows that during 2001 the majority of plans and patients favorably evaluated this agency as the regulator of this process. Several areas for improvement were identified by this report, including better explanations of the process for patients, enforcement of IMR decisions, and monitoring the IRO. Consider sending an IMR application separate from the health plan paperwork that advises patients of grievance results. This will help the patient realize that external review is being presented by an entity separate from their plan and will help define their role as patient advocates. Provide the patient with a simple How To IMR handbook outlining steps and a timeline. Independent Medical Review, Phase II California HealthCare Foundation 41

45 Provide a feedback loop for plans and physicians involved so the process has current meaning and impact. Ensure that there is adequate oversight and monitoring of IROs to ensure quality within the process. Administer IMRs for PPO patients. Enforce certain features of the system: o Verify that plans are displaying IMR information according to statute. o Provide clarification where the statute is unclear. Clarify which denial letters and which grievance forms need to include IMR information. o Ensure that IMRs have been implemented and provide enforcement assistance to patients experiencing problems after the final IMR decision has been made Independent Medical Review, Phase II California HealthCare Foundation 42

46 IV. Conclusion IMQ began this study when IMR in California was in its early stages. There was no long history to evaluate and thus no particular expectations about what this study would find. IMR, during the time IMQ has studied it, has been generally viewed as an effective mechanism for resolving disputes between patients and health plans regarding medical decisions. It is relatively cost effective, quickly accomplished, and provides a forum where medical decisions are made by medical professionals. It is seen as an important patient protection, giving consumers access to treatment, expertise, and services that they might not otherwise have. Despite the fact that some individuals perceive that they win or lose through this process, IMR has the potential to assure them that a sound decision was made because independent and well-qualified experts concentrating on their individual needs evaluated their request. IMR has supported health plans as well. Health plan decisions have been upheld about 60 percent of the time over the life of California s IMR program. Plans also have pointed out that IMR has reduced perceptions of bias and may help reduce liability. While it is generally recognized that IMR has the capacity to resolve health care disputes effectively and that it works well in many respects, this study has found several areas that might be improved. Improve Follow-Up and Enforcement In an unexpected finding of this study, IMQ identified a lack of enforcement in some areas. A significant number of patients participating in the study by telephone interview reported obstacles to receiving IMR-approved services. This points to the fact that effective follow-up was not yet a part of the system. The DMHC may have adopted the decision of the IRO, and plans may have authorized IMR-approved services, but neither may have had appropriate verification structures in place to make sure the decision was implemented. Other areas needing enforcement or clarification of the law include verification that plans are displaying written information as required and clear guidelines on noticing patients on denial letters and grievance forms. Compliance complaints have also been noted regarding verification of information that plans send to the IRO. Independent Medical Review, Phase II California HealthCare Foundation 43

47 Increase Knowledge and Awareness The lack of knowledge about the availability of IMR persists. Most managed care patients in this study were still unaware that independent medical was available prior to having a case. No one source of information had effectively reached this population. Additionally, there is a lack of knowledge regarding the nature of the process. Significant numbers of patients in this study did not know whether the medical experts were selected by their health plan. Independence of the experts is the cornerstone of the entire effort, yet patients are still uncertain about this feature of the process. Increased public awareness of IMR and better knowledge of the independence of the process would strengthen the system. Integrate Physicians into the Process In keeping with the goal of the program that medical decisions are made by medical professionals and not by governmental agencies, courts, or bureaucrats physicians need to be involved at a more fundamental level. This study illustrates that physicians were not well notified that IMR was in process, nor were they given much of a voice in the process. Not surprisingly, IMR had little impact on the way that most physicians made future treatment decisions. (This was probably true during Phase I as well, but it is hard to verify due to the inadequate response.) IMR might, however, be an important resource for physicians if they had greater knowledge of expert qualifications and thus more confidence in experts. Physicians have also expressed the need to know that decisions are based on the most current scientific information. Improvement in all of these areas might provide more avenues for influencing future decisions regarding treatments or services for their patients. Streamline the Internal Review Process The internal review process is one factor contributing to the low use of IMR. The steps leading up to IMR, including the denial and grievance process, seem to narrow the number of cases reaching IMR. More potential cases might reach IMR if the steps preceding it were streamlined. Provide Clear Guidance and Assistance The dramatic expansion in the scope of IMR may have left behind the most seriously ill patients. Fewer investigational/experimental cases are going through the system. These types of patients express lower confidence in their ability to support their cases and have more difficulty in supporting their cases. These patients presented in fewer numbers and experienced more denials during the transition to a process administered by a state regulator rather than the individuals own health plan. This group needs clearer paths to IMR and more assistance during the process. IMR in California has undergone dramatic changes in a short period of time. The California legislature increased the number of cases going through IMR by making a greater number of patients eligible for the process. This study indicates that some components of the program are working well. Other components should continue to improve as experience helps us identify opportunities for improvement. Adoption of this report and its recommendations could assist the program during its evolution to become more accessible and effective for all parties who participate in independent medical review. Independent Medical Review, Phase II California HealthCare Foundation 44

48 Appendix A Institute for Medical Quality Evaluating Independent Medical Review Phase II Advisory Panel 2002 Bill Cunningham, M.D. Medical Director PacifiCare of California Diane R. Estrin Executive Director Community Action to Fight Asthma Jonathan Freudman, M.D. Medical Director for Medical Policy Blue Shield of California Thomas L. Gilevich Corporations Counsel Department of Managed Health Care Health Plan Division Laurie Jurado Director, Appeals and Grievances/Credentialing HealthNet Lisa Koltun Vice President Health Plan Regulatory Services California Division Kaiser Permanente Health Plan John A. Kusske, M.D., Chair Institute for Medical Quality Independent Review Organization Committee Tony Linares, M.D. Medical Advisor Department of Managed Health Care Health Plan Division Earl Lui, J.D. Senior Attorney Consumers Union Independent Medical Review, Phase II California HealthCare Foundation 45

49 Catherine A. Porter Public Policy Advocate Women s Cancer Resource Center Thomas Rosenthal, M.D. Chief Medical Officer UCLA, Director & Vice Provost UCLA Medical Group Linda Ross, J.D. President, PULSE of Southern California Consumers for Quality Care Lea-Ann Tratten Legal Counsel Consumer Attorneys of California Independent Medical Review, Phase II California HealthCare Foundation 46

50 Appendix B Assessing the Independent Medical Review Process: Impact of California State Legislation: Patient Survey Aggregated Totals for Medical Necessity and Investigational/Experimental Cases Instructions: This survey may be completed by the person who had the independent medical review ( the patient ), or by a representative of the person who had the independent medical review. The patient will be used throughout the questionnaire to refer to the person who had the independent medical review. If the person completing this form is the patient, please answer accordingly. If the person completing this form is not the patient, your answers should reflect your personal knowledge of and experience with the independent medical review conducted on behalf of the person named below. Name of patient who had the independent medical review: Name of person responding and relationship to patient: Name of health plan which made initial denial: Please mark your answers on the line provided next to the answer that best fits your reply. Section 1: Knowledge of Independent Medical Review 1.1 Before your case was referred for an independent medical review, did you know about the law that requires health plans to make an independent medical review available to certain types of cases? 31.8% 49 Yes 61.7% 95 No (Go to Question 1.3) 5.8% 9 Not sure (Go to Question 1.3) 0.6% 1 No answer 1.2 If Yes, what was your first source of information about independent medical review? (Please mark only one response. Then go to Question 1.4) 42.9% 21 Health Plan 12.2% 6 Department of Managed Health Care 6.1% 3 General Media (TV, radio, newspaper, etc) 2% 1 Advocacy 0% 0 Lawyer Independent Medical Review, Phase II California HealthCare Foundation 47

51 6.1% 3 Physician 4.1% 2 Employer 20.4% 10 Other (Please identify) * Patient sometimes does not list other sources. 2 Friend 2 Internet 2 Medical Settings 1 Patient Occupation 6.1% 3 No answer Base: If No, when did you find out about independent medical review? (Please mark only one response.) 20.2% 21 When the medical group denied the proposed treatment 35.6% 37 When the health plan denied the proposed treatment 5.8% 6 When the health plan said that it was sending the case out for independent medical review (in cases of investigational/experimental treatments) 16.3% 17 During the health plan s grievance procedure 2.9% 3 Don t remember 6.7% 7 No answer 12.5% 13 Other (Please identify) * Patient sometimes lists multiple other sources. 4 Patient Research 3 DMHC 3 Health Plan 2 Physician/Nurse 1 Attorney 1 Employer Group Base: From what source(s) did you learn that your case would qualify for an independent medical review? (Please check all sources below that apply.) Health Plan: (Net) 83.1% Evidence of Coverage Denial letter(s) Conversation with health plan staff Member handbook Information/paperwork during grievance procedures Other * Patient sometimes does not list other sources. 1 Plan Attorney 1 Plan Doctor 1 Plan responding to patient letter * 128 respondents chose option(s) in this category Independent Medical Review, Phase II California HealthCare Foundation 48

52 Doctor or Medical Group: (Net) 29.9% Specialist who was treating the patient Patient s primary care doctor Medical group Medical Director Nurse Medical office staff Other 3 Allied health professionals within group 3 Letter from institution * 46 respondents chose option(s) in this category. At the institution where the proposed treatment was/would have been provided: (Net) 15.6% 9.1% 14 Doctor 0.6% 1 Nurse 2.6% 4 Program Coordinator or Case Manager 4.5% 7 Other * Patient sometimes does not list other sources. 2 Allied health professionals 1 Letter from the institution 1 Medication 1 Office Staff * 24 respondents chose option(s) in this category. 2.6% 4 Advocacy Group (please identify): * Patient sometimes lists multiple other sources. 1 American Diabetes Association 1 Amputees in Motion 1 Cancer support group 1 Health Rights Hotline 1 ORATEC, medical device manufacturing company Department of Managed Healthcare (DMHC): (Net) 30.5% 7.1% 11 Web site 19.5% 30 Customer service representative 3.9% 6 Help Center 0% 0 DMHC newsletter 5.2% 8 Other * Patient sometimes does not list other sources. 1 DMHC Attorney 1 DMHC Letter 1 DMHC Nurse 1 DMHC Public Service Announcement * 47 respondents chose option(s) in this category. 3.9% 6 Friends or acquaintances Independent Medical Review, Phase II California HealthCare Foundation 49

53 5.8% 9 Other (please identify): * Patient sometimes does not list other sources. 1 Attorney 1 Employment Group 1 Government Employee 1 Internet 1 Television 3.9% 6 Friends or acquaintances 1.3% 2 No answer * 154 patients gave a total of 343 answers. Because respondents were directed to check every option that applied in their experience, percentage totals will exceed 100%. 1.5 Did you learn about independent medical review through services and information provided in English? 100% 154 Yes 0% 0 No (if not English, what language? ) 1.6 Would it have been helpful to receive information and services about independent medical review in another language? 1.3% 2 Yes (if so, what language? ) 2 Spanish 96.2% 148 No 2.6% 4 No Response 1.7 Health plans provide their own system to enrollees for resolving disputes and complaints before a case goes to independent medical review. Patients whose cases are denied as not medically necessary must participate in their health plan s grievance procedure for 30 days. If the service remains denied at the end of this time period, the dispute may be submitted for independent medical review. Please indicate your experience with the grievance process by marking the appropriate answers. (If not applicable, go to Question 1.9) Was the plan s internal grievance process completed within 30 days? 50.6% 78 Yes 26% 40 No 18.8% 29 Don t know 4.5% 7 No answer 5 No answer 1 Not applicable 1 Medical necessity case reporting no participation in grievance process Did you know when this 30-day time period (for participating in your health plan s internal grievance process) started and stopped? Independent Medical Review, Phase II California HealthCare Foundation 50

54 35.1% 54 Yes 57.1% 88 No 7.8% 12 No answer/not applicable (2) 1.8 After you had participated for 30 days in the grievance process, did your health plan notify you that your case was then eligible for independent medical review? 53.9% 83 Yes 26.6% 41 No 13.6% 21 Don t remember 5.8% 9 No response 1.9 When you initially requested independent medical review, how likely did you think it was that your denial would be overturned? 42.9% 66 Very likely 29.9% 46 50/50 chance 20.1% 31 Very unlikely 5.2% 8 No opinion 1.9% 3 No answer Section 2: Patient Role and Experience During Independent Medical Review (IMR) 2.1 Once you had begun the IMR process, was information available to you explaining how to support your case, including who could submit information for the independent medical review? 61% 94 Yes 28.6% 44 No 9.1% 14 Don t remember 1.3% 2 No answer 2.2 Did you personally send any information to the Independent Review Organization? 80.5% 124 Yes 14.3% 22 No 4.5% 7 Don t remember 0.6% 1 No answer 2.3 Which of the following describe(s) your experience of supporting your case in the independent medical review process? (Please mark all that apply.) Independent Medical Review, Phase II California HealthCare Foundation 51

55 64.3% 99 I felt confident in my ability to support my case. 31.8% 49 I knew how and where to find information to support my case. 16.2% 25 I felt intimidated by the process. 29.9% 46 I had assistance supporting my case. (Please identify who helped you: * Patient sometimes does not list other sources. 22 Physician 6 DMHC 5 Family/Friends 4 Advocacy Program 2 Lawyer 2 Medical Staff Office 2 Plan Employee 1 Allied health professionals 1 ORATEC, medical device manufacturing company 20.1% 31 I would have appreciated assistance from a knowledgeable person. (If so, what type of person would have been helpful? ) * Patient sometimes does not list other sources. 8 Advocacy program/advocate 8 Physician 5 Attorney 1 DMHC 1 Insurance company 1 Medical office staff 2.6% 4 No answer ) 2.4 Which of the following describes your general experience with independent medical review? (Please mark all that apply.) 61.7% 95 a) I received all of the information I needed to initiate the independent medical review in a timely fashion. 16.9% 26 b) It was difficult to find out about how to proceed with the independent medical review. 31.8% 49 c) The process was clearly explained and I knew what to expect. 16.2% 25 d) I knew how long it would take to receive the recommendations of he experts. 3.2% 5 e) My physician discouraged me from proceeding with the independent medical review. 7.1% 11 f) My health plan discouraged me from proceeding with the independent medical review. 19.5% 30 g) Other. (Please specify ). * Patient sometimes lists multiple other sources. 14 Confusion, frustration about process discouraged from proceedings, HMO intimidating: * Confused about process * No contact person for tracking process; completely blind process * Hassle * IMR forced upon patient * Frustration and disbelief with ineffective process * HMO intimidating Independent Medical Review, Phase II California HealthCare Foundation 52

56 5.8% 9 No response * Patient doesn t have same resources as health plan * Plan didn t send all information to start IMR * Timelines were not observed * Confused about why treatment was stopped * No information was given * Did not understand what paperwork was needed * Frustrated that she could only explain in written form * Nightmare * IMR process justified the lack of care * Poor communication * Nurse at medical group discouraged her * Liked receiving this survey because wanted check-up on how process worked 8 Needed more helpful information 4 Positive experience 3 DMHC helpful/not helpful 3 Enforcement/implementation problems 1 Doctor assisted 1 Don t remember 1 IMR denial vague lack references to sources 2.5 How much time passed from when you first decided to pursue the proposed treatment until you were notified of the final determination of the independent medical review? 13% 20 One month or less 21.4% months 26.6% months 18.8% months 13.6% 21 Don t remember 2.6% 4 Not applicable. I had the treatment before the review. 3.9% 6 No response 2.6 How satisfied were you with the amount of time it took to receive the results of the independent medical review? 33.8% 52 Very satisfied 26.6% 41 Satisfied 15.6% 24 Somewhat satisfied 20.1% 31 Not at all satisfied 3.9% 6 No response Section 3: Outcome of Independent Medical Review 3.1 The treatment option that was evaluated in the independent medical review was: 57.1% 88 Approved Independent Medical Review, Phase II California HealthCare Foundation 53

57 42.9% 66 Denied (Go to Question 3.4) 3.2 Did you receive the treatment you had requested? 17% 15 Yes, before the Independent Medical Review Organization approved it. 76.1% 67 Yes, after the Independent Medical Review Organization approved it. 6.8% 6 No (Go to Question 3.4) 3.3 In your opinion, having the treatment: (Please mark all that apply. Then go to Question 3.5.) 34.1% 28 Enabled me to live longer 85.4% 70 Improved my quality of life 4.9% 4 Did not change my condition 3.7% 3 Resulted in a decline in my health status 1.2% 1 None of the above 28% 23 Other (Please specify any other outcomes of having received the treatment.) * Patient sometimes lists multiple other sources. 11 Positive results * Saved life * Improved communication ability * Enabled patient to pronounce R sound * Improved school test scores * Reduced pain * Faster recovery * Child could function closer to or at peer level * Independent productive life rather than institutionalized * Less pain and higher function * Significant weight loss * Peace of mind 4 Condition maintained 2 Condition declined 1 Treatment allowed patient to proceed to surgery Base: When the treatment was denied (please mark all that apply): 8.3% 6 I understood the reasons why the treatment was denied. 0% 0 I had a better understanding about earlier denials of the proposed treatment. 76.4% 55 I believed that I should have received the treatment. 23.6% 17 I decided to go ahead with the treatment without the health plan paying for it. 41.7% 30 I felt angry that I had gone through independent medical review. 13.9% 10 No response 29.2% 21 Other. (Please identify any other outcomes of having been denied treatment.) * Patient sometimes lists multiple other sources. Independent Medical Review, Phase II California HealthCare Foundation 54

58 16 Problems with IRO * Felt IRO panel was not appropriate cross-section of experts * Denial was conclusory opinion, reasoning never stated * Needed reasons for denial in laymen s terms * Believed that reviewer never did read information submitted by patient (2) * Review lumped patient into standards and statistics, no individual consideration. * Felt decision was stupid, requested procedure less expensive * Frustrated that couldn t contact reviewer (2) * Review was biased, in favor of HMO * Rubber-stamp of plan denial * Process bought off by insurance companies * Review based on false information from health plan * Reviewers didn t have all necessary information to make an informed decision * Disagreed with IRO reasoning (age as a factor) * Review based on false information from plan 5 Problems with Plan * Plan misstated treatment request * Changed health plans due to denial (2) * IMR couldn t make plan pay for covered services * Saw that health plan did not value improving speech 5 Negative emotions * Insurance didn t pay for equipment; did not want to be a burden to insurance company * Frustrated that physician s recommendations not followed * Felt ignored by state regulators * Little confidence in IMR 4 More physical damage; prolonged pain; more invasive surgery; safety compromised 1 Enforcement problems 1 Patient paid for treatment Base: Did a doctor discuss the Independent Review Organization s report with you? 13.6% 21 Yes (please specify the doctor who discussed the report with you). 79.9% 123 No 1.3% 2 Don t remember 5.2% 8 No answer 2.6% 4 Primary Care 6.5% 10 Specialist 3.9% 6 Physician who would provide treatment 1.3% 2 No answer 0.6% 1 Other 3.6 How well did you understand the Independent Review Organization s basis for the decision? 62.3% 96 Completely understood it upon first reading without assistance of a doctor 1.9% 3 Understood it after a doctor explained it 8.4% 13 Partially understood it 18.8% 29 Did not understand it 1.9% 3 Don t remember 5.8% 9 No response Independent Medical Review, Phase II California HealthCare Foundation 55

59 0.6% 1 Not notified of basis for decision Section 4: Evaluation of Independent Medical Review Process 4.1 Was the DMHC involved in your independent medical review? 64.9% 100 Yes 7.1% 11 No 23.4% 36 Don t remember 4.5% 7 No response 4.2 How would you evaluate the Department of Managed Health Care s (DMHC) role in administering your independent medical review? (Check all that apply.) 50.6% 78 It responded quickly to my request for IMR. 29.2% 45 It helped me understand the IMR process. 34.4% 53 It made the IMR occur in a timely manner. 24% 37 It was a neutral party in the IMR process. 9.1% 14 It was difficult to get assistance with IMR. 8.4% 13 Its information was not clear. 2.6% 4 It delayed the IMR process. 11.7% 18 It was affiliated with a health plan No response 10 Not applicable 1 DMHC didn t follow law 1 Waste of time 4.3 How confident are you that your individual medical status was considered during the independent medical review? 42.9% 66 Very confident 10.4% 16 Confident 8.4% 13 Somewhat confident 35.1% 54 Not at all confident 3.2% 5 No response 4.4 How confident are you that the medical experts conducted a fair and impartial review? 39.6% 61 Very confident 11% 17 Confident 7.1% 11 Somewhat confident 38.3% 59 Not at all confident Independent Medical Review, Phase II California HealthCare Foundation 56

60 3.9% 6 No response 1 Don t know 4.5 How confident are you that the medical experts thoroughly considered available scientific information? 37% 57 Very confident 11.7% 18 Confident 8.4% 13 Somewhat confident 38.3% 59 Not at all confident 4.5% 7 No answer 2 Don t know 4.6 Do you think that the health plan played a role in selecting the medical experts who participated in the independent medical review? 23.4% 36 Yes 33.1% 51 No 40.9% 63 Don t know 2.6% 4 No response 4.7 Do you think that the individual(s) who reviewed your case had the appropriate expertise? 45.5% 70 Yes 3.9% 6 No response 31.8% 49 I did not have enough information about his/her expertise 18.8% 29 No (If no, please explain. ) * Patient sometimes does not list other sources. 14 Wrong experts were assigned * Doctor did not have expertise in autism * Not experienced in prosthetics * Review showed lack of knowledge for specific type of cancer * Very few experts in this county have the knowledge * Few doctors have experience with her rare disease * No expert performed surgery patient required * No expert from pain management * Doctor who reviewed case was endocrinologist. This field had absolutely nothing to do with the medical problem * Selection of reviewers did not include a pediatric neurologist or physical/rehab specialist * Needed psychopharmocology not psychiatrists * There were no maternal fetal specialists or perinatologists * The wrong specialist assigned (3) 4 Reasoning faulty * Decision was illogical. Cost of requested treatment lower * Decision showed lack of knowledge of gender of patient * Decision was a rubber stamp of plan denial * Decision ignored updated information 4 Reviewers may have had training in specified specialty but were inappropriate Independent Medical Review, Phase II California HealthCare Foundation 57

61 because: * No daily contact with these types of patients * Never saw patient in question/no exam * Never saw patient in question/no exam * None of the experts had performed surgery patient requested * Experts ignored studies 2 No evidence presented reviewer had appropriate expertise 4.8 To what extent has the independent medical review process effected your confidence that your health plan covers medically necessary services? 14.9% 23 Increased confidence a great deal 22.1% 34 Increased confidence somewhat 15.6% 24 Decreased confidence somewhat 42.2% 65 Decreased confidence a great deal 5.2% 8 No response 4.9 Presented below is a list of features that describe independent medical review. Which features did you know about before your case was sent to the Independent Review Organization? (Please mark all that apply.) I knew: a) That independent medical review was defined by state legislation and regulations. 42.9% 66 Know 55.8% 86 Don t know 1.3% 2 No response b) That the Independent Medical Review Organization (IRO) was not affiliated with any health plan. 48.1% 74 Know 51.3% 79 Don t know 0.6% 1 No response c) That medical experts were selected by the IRO and not the health plans. 31.2% 48 Know 68.1% 105 Don t know 0.6% 1 No response d) That medical experts had no significant financial interest in your health plan, provider, or medical facility. 27.3% 42 Know 72% 111 Don t know 0.6% 1 No response Independent Medical Review, Phase II California HealthCare Foundation 58

62 e) That medical expert findings had to be supported by medical and scientific evidence. 35.1% 54 Know 64.3% 99 Don t know 0.6% 1 No response f) That the health plan was required to provide the treatment if the medical experts determined that it would be helpful. 63.6% 98 Know 35.7% 55 Don t know 0.6% 1 No response 4.10 Now that you have completed your independent medical review, how important would you say each of the following features is to an effective review process? (Please mark an answer for each feature where 1 is very important, 2 is important, and so forth.) 1 = Very important 2 = Important 3 = A little important 4 = Not at all important a) That independent medical review is defined by state legislation and regulations. 71.4% 110 (1) 13.6% 21 (2) 3.2% 5 (3) 3.9% 6 (4) 7.8% 12 No response b) That the Independent Review Organization (IRO) is not affiliated with any health plan. 89% 137 (1) 1.9% 3 (2) 0.6% 1 (3) 2.6% 4 (4) 5.8% 9 No response c) That medical experts are selected by the IRO and not the health plans. 84.4% 130 (1) 5.2% 8 (2) 0% 0 (3) 3.9% 6 (4) 6.5% 10 No response d) That medical experts have no significant financial interest in your health plan, provider or medical facility. 86.4% 133 (1) Independent Medical Review, Phase II California HealthCare Foundation 59

63 2.6% 4 (2) 0% 0 (3) 3.2% 5 (4) 7.8% 12 No response e) That medical expert findings must be supported by medical and scientific evidence. 66.9% 103 (1) 21.4% 33 (2) 0.6% 1 (3) 2.6% 4 (4) 8.4% 13 No response f) That the health plan is required to provide the treatment if the medical experts determined that it would be helpful. 91.6% 141 (1) 1.3% 2 (2) 0% 0 (3) 1.9% 3 (4) 5.2% 8 No response g) That medical experts reviews are randomly audited by a panel of physicians to be sure that reviews are conducted appropriately and experts are qualified to make the determination. 77.9% 120 (1) 11.7% 18 (2) 2.6% 4 (3) 1.3% 2 (4) 6.5% 10 No response h) That there is oversight of the review organizations. 70.8% 109 (1) 15.6% 24 (2) 1.9% 3 (3) 1.3% 2 (4) 10.4% 16 No response 4.11 Based on your experience, what worked well about the independent medical review process? 45% 88 A. Administrative Process 46 The process was timely. 23 DMHC provided good assistance. 12 The process was simple, clear to follow. Independent Medical Review, Phase II California HealthCare Foundation 60

64 5 Patient had the opportunity to submit info into the process. 1 Patient received an application for IMR. 1 Plan guided patient through process well. 1 If paperwork worked well, process worked well. 1 Found DMHC after months of appeals and grievances. 1 Process sped up after DMHC involved. 1 The way they handle things. 11% 22 B. Nothing / Not Much 10% 20 C. Patient got the right treatment or right expertise. D. IMR handled information correctly / provided appropriate research on condition/possible treatment options. 5 Reviewed all the facts. 1 NIH standards were used 1 Correct information was used 1 IMR provided research on condition 1 Considered as individual not statistic 1 IRO gave detailed report 1 IMR provided good judgment on what was medically necessary 1 Used IMR decision when switched plan 1 Reviewer cited patient s submitted information in decision 1 IMR added countless studies / facts supporting treatment 8% 15 E. No response 6% 12 F. Independence of the process 3 No affiliation between reviewers / plan 3 IMR balances powerful HMO 3 IRO looks at medical issues not financial issues 1 Doctors, not administrators made decisions 1 Selection of unbiased reviewers 1 Selection of experts w/specialized knowledge, not currently available in HMO, necessary to make appropriate decisions 6% 11 G. That IMR existed / provided a forum for hearing case. 3% 5 H. That IMR process listened to patient s doctor. 3% 5 I. IMR process provided enforcement. 2 IMR forced plan to provide treatment recommended by doctor 1 Health plan obligated to render medically necessary services 1 DMHC has power over health plan 1 State supports patients rights for valid medical claims 4.12 Based on your experience, what should be changed about the independent medical review process? 19% 40 A. Change the way IRO operates Independent Medical Review, Phase II California HealthCare Foundation 61

65 15 IRO reviewers should be evaluated. 3 Increase number on review panel 2 Quality check doctors doing reviews 1 Both men and women should review cases 1 Greater variety of doctors experienced in using new methods 1 Review panel needs more experience in field being reviewed 1 Don t hide qualifications of reviewers 1 Qualifications of reviewers should be evaluated 1 Review panel should have experience in field being reviewed 1 Reviewers should be selected based on expertise 1 Select correct experts for panel 1 Appropriate experts should be assigned to each case 1 Review the doctors who make uneducated suggestions 12 Patient wants direct contact IRO 10 Wants contact with IRO 1 IRO physicians should examine patient 1 So patient can ask questions about the review 7 Change the IRO explanation of determination. 3 More supporting documentation for IRO decision 2 Need better explanation of IRO denial 1 Needs more information in understandable manner on IRO denial 1 Accountability for review by showing reasoning 5 Change the way IRO evaluates information. 3 IRO doctors should rely on / consider updated information or latest research 1 Reviewer should collect more information 1 Do more research on patient s condition 1 Patients should be given a choice of reviewers 13% 28 B. Nothing should be changed. 12% 25 C. Change administrative process. 9 Streamline / reduce paperwork. 2 Shorten it 2 Reduce paperwork 1 Clarify paperwork between plan/clinic 1 Procedure required too many legal-type forms 1 Better organization of paperwork 1 Send documents by certified mail so they don t get lost 1 Make system more user friendly 9 Speed up the process / shorten it. 7 Faster process needed when patients in pain 1 Make the process less exhausting Independent Medical Review, Phase II California HealthCare Foundation 62

66 1 Faster service 6 Speed up the process / shorten it. 2 Needs better explanation of how to submit supporting documentation 1 Make it clear on forms that IMR is separate from plan s grievance 1 Wants better explanation of process before it begins 1 Change fact that IMR information comes in HMO grievance paperwork 1 Inform patients about IMR from beginning of grievance procedure 1 Give patients more choice in electing to participate in IMR. 1 Notify patients of reviewers name / medical training before patient elects to participate in IMR 12% 25 D. Change DMHC. 9 Improve DMHC customer service. 2 More follow-up 2 More personal touch 1 Make it easier to reach contact person at DMHC 1 Improve service; call backs take too long 1 Customer service desk should handle initial calls differently, not rebuff callers 1 Better quality phone liaison at DMHC 1 Get phone calls returned by DMHC 8 DMHC needs to enforce laws / monitor process 2 DMHC should force plans to pay for IMR-approved services 2 Needs more enforcement of IMR decisions 1 Make agency ensure that IMRs conform to laws 1 DMHC needs to monitor health plans so biased information is not sent to IRO; patients should know what information is being sent 1 Make DMHC stronger; give it backbone to ensure IMR conforms to legislation 1 DMHC shouldn t allow HMO to provide service right before IMR decision 6 DMHC should take a more active role in process 3 Should provide advocate to help patient find research 1 State should provide research/reference information regarding disputed service 1 Should be active patient advocate 1 Wants advocate during process 2 DMHC should not administer IMR 1 Disband the DMHC 1 Don t allow DMHC to administer IMR because it didn t enforce laws requiring to notify what information is being sent to IRO 10% 21 E. Broader and earlier dissemination of IMR information. 12 General awareness 4 More public awareness Independent Medical Review, Phase II California HealthCare Foundation 63

67 4 More information about IMR earlier 3 Advertise it more 1 Need more information about IMR laws and safeguards 5 Patient / doctor education 1 Introduce IMR information to patients at earlier stages 1 More doctors should be aware of IMR options 1 Patients should be informed of their IMR rights 1 Too much burden on patient to find out about IMR 1 The process should not be so mysterious for patient 3 Plan should distribute IMR information 1 IMR information should accompany all plan information 1 Plan should state IMR information in bold, clear format 1 Plan should give information about IMR 8% 17 F. No response 8% 18 G. Change information gathering / information review. 8 Don t rely on incorrect / incomplete information. 2 Don t rely on old information 1 Don t rely on info from doctor originally denying, because then IMR is rubber stamp 1 Review should address all concerns, not just one selected by provider 1 IMR process should take accurate history of problem 1 Case should not rest on information of paid-off doctor 1 Old boys network maintains status quo on what information is used; go to med school and then don t get new updated information 1 Reviewers should cite balanced array of studies, not just ones that support their personal opinions 5 Review of case should not be based solely on scientific data 2 Consider preventative medicine as important 2 Review case treating patient as individual, not statistic 1 Consider emotional/intellectual needs of patient 5 Change how information is sent to the IRO 3 Verify with patient that correct information sent to IRO 1 Patients get information to IRO not plan 1 Change conflict of interest in relying on plan to provide medical files to IRO 8% 17 H. Change process before IMR 8 Change the way that plan denials are made 2 IMR should go into effect after first denial 1 Don t let health plans keep changing grounds for denial (due process issue); can t fight denial, provide information based on reasoning that is changing 1 Plan s denial criteria was inadequate 1 Don t let plan change its mind about treatments, e.g., deny then approve Independent Medical Review, Phase II California HealthCare Foundation 64

68 1 Shorten plan denial process before IMR 1 Wants to know about IMR on initial denial; got many denials 1 Plans should be required to disclose their denial rates 1 Shorten plan s denial process before IMR 7 Shorten / streamline plan s denial and internal review process. 1 Redesign process denial / grievance so it doesn t exhaust patients and keep them at health plan level 1 Speed up process before IMR 1 Reduce time for health plan grievance 1 Paperwork between plan/medical group before IMR is a delay tactic 1 Change denial process/grievance process before IMR; these are delay tactics 1 Limit number of appeals patient has to make at plan level 1 Wants more information about IMR during grievance 1 Eliminate plan s internal review 1 Take internal review away from plan; it is a rubber stamp for original denial 1 Information should be reviewed before IMR 1 Medical groups should read doctor s initial assessment before IMR 6% 12 I. Change physician involvement / weight in the process 9 Listen to patient s doctor 1 Doctors should coach patients to present their case 1 Doctors should tell patients they have a right to IMR 1 Doctor s office should be more helpful during process 3% 6 J. Appeal / remedy to IMR decision should be available 1 Consequences or penalty for not playing honestly during IMR should apply; i.e., old boys network which controls information 1 Wants appeal of final decision or second opinion or IRO decision, especially if treating physician s judgment was not given enough weight 1 Provide protection for those going through process if the plan retaliates 1 IMR decision should be binding, plan should not be allowed to appeal it 1 Wants recourse if review sloppy 1 Wants remedy if IRO doesn t follow law and DMHC doesn t enforce law as to the qualifications of reviewers and review of scientific information 2% 5 K. Miscellaneous 2 Eliminate IMR 1 U.S. needs universal coverage like Europe 1 Eliminate IMR, give patients immediate recourse through the courts 2 Eliminate financial concerns of plans 1 Require HMO to provide interim care until final IMR decision Independent Medical Review, Phase II California HealthCare Foundation 65

69 4.13 What, if anything, do you wish you had known upon beginning independent medical review that would have made it easier or better? 31% 49 A. No response 17% 27 B. Nothing 13% 20 C. Known about it earlier 2 Knew before grievance 1 Knew to request it right away 1 Known about it earlier, could have gone to IMR before all five appeals patient did 10% 16 D. Knew about information gathering / information review 4 Knew what type of information IRO would consider / was needed 4 Knew patient could have submitted information 1 Knew plan was unreliable in regard to submitting correct / relevant information to IRO 1 Knew if IRO needed more information 1 Knew patient was solely responsible for providing appropriate medical information 1 Knew where to find information to support case 1 Known his medical information related to the case 1 Known that plan were required to notify patient which information is sent to IRO so patient can check accuracy 1 Known reviewers qualifications so she could submit information necessary to make informed decisions 1 Knew who was allowed to submit information 9% 14 E. Known more about the law 1 Could have been more assertive in pursing case if knew state was neutral 1 Knew that IMR not affiliated with plan 1 Knew to end grievance process 1 Knew IMR was enforcement tool 1 Knew if PPOs qualified for process 1 Knew not to continue in plan grievance process after initial grievance completed 1 Knew about laws/safeguards 1 Known how to eliminate run-around by plan before IMR 1 Known decision was binding 7% 11 F. Known more about process itself 3 Had a fair chance 1 How impersonal it was 1 How to get through complicated process 1 How process would apply when standards of care change (bone marrow) Independent Medical Review, Phase II California HealthCare Foundation 66

70 1 Known location for review (patient wanted to attend) 1 Known patient needed lawyer to present case 1 Known not to be intimidated as she entered process 1 Known how long it would take 1 Known that IMR would not consider her condition advanced 1 Known there was no opportunity to speak to reviewer` 1 Known how rapidly case would move once IMR initiated 1 Known time frames for process 1 Known IMR was repeat review of plans documents and not through enquiry 1 Known results were going to be rubber stamp of grievance 1 How to play game of rationed health care 4% 11 G. Known more plan 1 Knew that denials were stall tactic 1 Knew why plan PCP stopped treating her in first place; what happened to trigger discontinued case 2 Knew plans IMR uphold / overturn rates 1 Knew medical group was not concerned with safety during surgery 1 Knew why plan denied service in first place 3% 4 H. Known it would be a waste of time 2% 3 I. Known more about the DMHC 1 Known DMHC not following its own rules 1 Known a contact person was available 1 Known DMHC could help enforce IMR approval Thank you for your participation! You will receive a copy of the final report. Independent Medical Review, Phase II California HealthCare Foundation 67

71 Additional Findings Patient Experiences and Comments 19 - Enforcement Issues 11 - Patient has difficulty obtaining IMR approved service Patient denied after IMR 1 - Plan denies medication after IMR approval 1 - Plan provided service then began denying 1 year later 1 - On-going continual treatment approved. Plan still denies every time patient needs replacements. Needs to contact DMHC repeatedly to get IMR enforced. Patient faces obstacles after IMR 1 - Clinic refuses to provide IMR approved services. Clinic physician states he doesn t care what IMR says. Also states she must try something else first. Clinic cancels patient s appointment to get referral to surgeon for approved services. 1 - Patient gets surgery approved, group goes bankrupt. Plan will not assist patient finding new doctor. 1 - Patient faces huge bureaucracy and resistance from plan in providing service. Took lawyers / fines. DMHC to get service. 1 - Had to beat plan over head to get treatment. Plan puzzled patient entitled to service after IMR. 1 - Surgeon approved through IMR to see patient refuses to se him due to conflict between Plan and surgeon s institution. 1 - Patient states plan retaliates after IMR. Maintains separate file on patient about her complaints. Patient worried plan not just keeping medical files. 1 - Patient still battling with plan 1 year after IMR. Plan not complying with IMR decision, wants DMHC caseworker to assist after IMR to enforce. 1 - IMR approves treatment. Patient understands decision binding. Plan requests re-review. Lengthy review after IMR. Patient inquires about re-review, told proceedings were closed-door. DMHC overturns CHDR approval. Patient reports IMR approved service not paid or payment delayed 1 - Has unpaid claims 1 year past IMR approved surgery 1 - Financial problems getting bills paid for IMR service 1 - Attorney has to call plan for reimbursement check to be sent. Process very drawn out 1 - Continuous coverage specified in IMR approval. Plan stops payment after 5 months. 1 - Receives rejection notices of bills. Plan must review bills sent back and forth between provider / plan. 5 - Compliance complaints 1 - Plan won t comply with patient request to see information it sends to IRO 1 - Plan did not send all necessary information to start IMR. Patient gives plan forms from DMHC web site. 1 - DMHC not enforcing legal standards as they apply to IRO: IRO refused to consider legally qualified scientific information. DMHC not ensuring appropriate reviewer is on panel. Reviewer consulted w/expert. Should be the expert. Independent Medical Review, Phase II California HealthCare Foundation 68

72 45 - Problems with Pathways to IMR 18 - Denial issues 8 - Reports multiple denials 1 - Denied 2-3 times by different physicians 1 - Denied 3 times before grievance 1 - Patient receives 2 written denials before grievance 1 - Received 2 written denials from plan and 1 verbal denial from plan specialist 1 - Denied 2 times in writing Notified of IMR on 2nd denial 1 - Reports three denials (5/18) (5/24) & (6/5). Plan includes IMR application on 3rd denial 1 - Multiple denials from medical group. Not informed of IMR on initial denial. 1 - Denied 3 times. Suspects plan did not expect him to appeal 3 rd denial 5 - Patient interaction with Plan during denial process 1 - Plan advised patient nothing could be done after denial, no way to appeal 1 - Plan denies, then wears patient down, hopes patient won t take beyond denial 1 - Plan tells patient under no circumstances would medication ever be approved ever 1 - Patient wanted advocate during denial process. 1 - Waiting for plan s formal denial time consuming and a delay tactic 3 - Basis for denial changed / unclear / inaccurate 1 - Plan changes grounds for denial mid-stream Due process issues, can t defend against denial when reasons for denial changing. Wants DMHC to investigate plan s denial process. 1 - Changed basis for denial many times. Two examples: One time because out of plan, one time because investigational. 1 - Basis for denial wrong because plan didn t bother to read report showing progress. 2 - Plan approves then denies 1 - Plan at one time approves (modification of wheelchair), later denies 1 - Plan denies surgery two times by phone: Plan originally approves surgery, calls patient night before procedure to deny. Approves later and calls patient two days before procedure to deny and cancel again Grievance Issues 8 - Patient participates in multiple appeals before becoming aware of IMR; patient must navigate multiple appeal levels 1 - Reports 7 appeals before being made aware of IMR 1 - Reports 10 months of appeals/grievance with plan before finding IMR 1 - Patient went through 5 appeals before he know he could go to IMR 1 - Denied at grievance. Plan then offers oral interview to appeal in 2 months 1 - Patient goes through 2 denials, arbitration, grievance and IMR. 1 - Grievance includes many different reviews 1 - Patient goes through multiple appeal levels 1 - Plan upheld denial at grievance. Plan then tried to convince patient to file 2 nd level appeal 7 - Grievance took too long/paperwork confusion/term confusion 1 - Grievance review process took way too long Independent Medical Review, Phase II California HealthCare Foundation 69

73 1 - Grievance took a long time due to paperwork being sent to wrong departments 1 - Grievance too slow because plan staff confused. Didn t know what to do 1 - Paperwork confusion between plan/group 1 - Confusion about when grievance starts, IMR starts 1 - Plan didn t tell patient during grievance that care was denied because it was not medically necessary. Plan never uses medical necessity terms, DMHC does. Labeling problem per patient 1 - Felt strung along by grievance took 5 months. Plan asks patient for research / records. Patient sends, plan says never received. Grievance is stall tactic 4 - Plan interaction with patient during grievance 1 - Applied for IMR during grievance, got nasty letter from plan, said patient should have worked it out with plan first. 1 - Grievance was a telephone conference with other plan doctors whose minds already made up. Plan disgusted with patient when she wanted to appeal. Treated in bad manner. 1 - Plan made first denial in 24 hrs. Indicated appeal wouldn t help. Notified patient of 30-day time limit for grievance. Indicated verbally grievance would be denied. Plan actions indicated it would not pay out-of-plan services even though it is covered by plan. 1 - Plan gave no info during grievance, Long plan review causes cancer to progress. Overall Experience with Process before IMR 1 - Not satisfied w/time frames for IMR because IMR last step after long plan process. 1 - Spent 6-8 months in denials, appeals, grievance, IMR 1 - Once IMR initiated plan asks patient to resubmit request. This their graceful way to get out of IMR 1 - Medical group/plan actively resistant to treatment plan before IMR. Medical group tells physician to get child out of hospital when Mom leaves on business trip. Mom pushes her way into IMR DMHC front desk resistant to her request. Once IMR initiated with help of DMHC attorney, then process moves quickly. Independent Medical Review, Phase II California HealthCare Foundation 70

74 Appendix C California Department of Managed Health Care * Summary of IMRs by Health Plan, January 1, 2001 December 31, 2001 Experimental / Investigational IMR Medical Necessity IMR Health Plan Aetna US Healthcare of CA Blue Cross of CA Blue Shield CA Physician s Service Cigna Healthcare of CA Community Health Group Health Net of CA Health Plan of the Redwoods Kaiser Foundation Health Plan Total IMRs Total IMRS Plan Upheld Plan Overturned IMR Withdrawn Total IMRs Plan Upheld Plan Overturned IMR Withdrawn Lifeguard, Inc Managed Health Network Maxicare Health Plans, Inc. PacifiCare of CA San Joaquin Co. Health Comm. Sharp Health Plan Universal Care Western Health Advantage Total Less 51 withdrawn IMRs 601 * The California HMO Help Center Annual Report 2001 John Q. Doesn t Live Here Anymore Independent Medical Review, Phase II California HealthCare Foundation 71

75 Appendix D Geographic Distribution of IMRs for Study Sample Based on Respondent s Zip Code Total Number of Zip Codes = 140* Southland: 39% Bay Area: 20% Sacramento Valley: 10% San Joaquin Valley: 9% Inland Empire: 6% Wine Country: 5% Gold Country: 3% Central Coast: 1% North Coast: 1% Northern Mountains: 1% Eastern Sierra: 0% APPENDIX E *Zip codes outside of California not included in percentage totals: (2 AZ, 1 OH, 1 NV) Independent Medical Review, Phase II California HealthCare Foundation 72