Lesson 4 Clinical Practice

7/17/2019 Lesson 4 Clinical Practice

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AHM Medical Management: Clinical Practice

Objectives:

After completing lesson Clinical Practice Management, you should be able to:

Describe the components of a health plan's coverage policy

List several types of services that health plans typically limit or exclude

Describe the types of coverage issues typically addressed by medical policy

Explain the importance of technology assessment as it relates to medical policy

Explain the role of clinical practice guidelines

Introduction

In The Role of Medical Management in a Health Plan, we began our discussion of medical

management by presenting quality and cost-effectiveness as the two main objectives of themedical management process. You also learned about the primary methods for achieving theseimportant objectives and the influence of various environmental factors on a health plan's medical

management decisions.

Now, in Clinical Practice Management , we will turn our medical management focus to thedelivery of healthcare and, within that context, more specifically to the development andimplementation of parameters for the delivery of healthcare services to a health plan's members-a

process known as clinical practice management. Clinical practice parameters include:

Clinical Practice Parameters include:

1. A health plan's medical policies concerning the appropriate use of medical services

2. Clinical practice guidelines (CPGs) used by healthcare practitioners when delivering clinicalservices and also used by health plans to develop medical policy

Figure 2A-1 provides additional information on the roles of these two types of parameters.

In this lesson, we examine medical policy, its relationship to a health plan's overall coverage

policy, and the role of technology assessment in medical policy development. We also explore theuse of clinical practice guidelines and how such guidelines are developed and implemented. Inaddition, we discuss risk management as it relates to clinical practice management.

Please note that medical policy content sometimes overlaps with the content of CPGs. For example, a health plan's medical policy on hysterectomies might indicate specific clinical criteria,

such as the size of the uterus, symptoms, and/or failure of conservative therapy, that must be present to support the appropriateness of the hysterectomy. Similar clinical criteria might bespecified in clinical practice guidelines.



It is also important to note that the use of terminology varies in the health plan industry. In thiscourse, we use the term coverage policy to refer to all the rules and processes that a health plandevelops and implements in conjunction with its purchaser contracts to determine covered

healthcare services and supplies. This definition broadly includes both clinical and nonclinicalissues. Some health plans use the term medical policy in this broader sense; others use medical

policy, as we do in this lesson, to more narrowly refer to a subset of coverage policy. M edical

policy , in this narrower sense, refers to the rules and processes health plans apply when making

coverage determinations that require an interpretation of the contract's medical necessity andappropriateness provision and experimental/investigational provision. Regardless of terminology,

however, virtually all health plans use the types of policies and guidelines described in thislesson.

Medical Policy and Other Components of Coverage Policy

A health plan finances and arranges the delivery of healthcare according to the terms of a contract

issued to the purchaser. In this section, we examine how health plans develop and use policies tohelp support the consistency of activities related to the financing and delivery of healthcare with(1) the terms of the purchaser's contract and (2) available evidence-based medical information.

As Figure 2A-2 illustrates, there are three general categories of coverage policy: (1) medical

policy, (2) benefits administration policy, and (3) administrative policies governing processes and procedures used in conjunction with coverage decisions.



Medical Policy

As we noted earlier, medical policy is a type of coverage policy used to determine the medicalnecessity and appropriateness of services. Medical policies rely as much as possible on the use of

evidence-based medicine, which typically comes from peer-reviewed medical literature reportingthe results of clinical trials of medications, tests, procedures, treatments, and devices. For a new

treatment or test to be included as an appropriate intervention in the health plan's medical policy,the studies must show an improved outcome resulting from the treatment or test under

consideration. However, because many currently accepted healthcare services do not have theevidence necessary to meet this standard, many health plans also rely on current community

standards and expert provider opinion when determining medical policy.

Medical policies typically address a specific test (such as bone densitometry tests for osteoporosis) or treatment (such as chiropractic) and the situations in which that test or treatmentis considered medically necessary and appropriate. In some cases, a medical policy focuses on a

specific medical condition (such as urinary incontinence) and identifies applicable tests or treatments considered medically necessary and appropriate for that condition. Medical policiesalso describe situations in which the test or treatment is typically not considered medically

necessary and appropriate and, therefore, will not be covered. Other elements often included in amedical policy are billing and coding information for providers, definitions of key medical terms,

references, and dates for policy implementation and updates

In addition to using medical policies for coverage decisions, health plans distribute their medical policies to providers to help them determine whether a treatment approach is appropriate for a

particular patient's situation. Some health plans have begun making their medical policiesavailable to the public. For instance, BlueCross BlueShield of North Carolina was one of the firsthealth plans to provide access to its medical policies on its Web site. Figure 2A-3 shows one such

medical policy.



Corporate Medical Policy

Growth Hormone

File Name: Growth HormonePolicy Number: DRU4080

Origination: 8/1996Last Review: 12/1999Next Review: 12/2001

Description of Procedure or Service

Growth hormone (GH), also called somatotropin, is a hormone produced during sleep by the pituitary gland. When the gland fails to produce enough of the hormone, a child is short in statureand has bone growth problems. Occasionally, the gland is damaged by radiation, trauma, or

disease, in which case the result is the same: the child fails to achieve a normal height. Growthhormone treatment is indicated for children who fail to grow because they have a growthhormone deficiency. The growth hormone covered by this policy is an artificially producedversion of the natural hormone, which must be injected under the skin either daily or several

times a week. GH has been marketed under the following names: Humatrope®, Nutropin®,somatrem®, Protropin®, Serostim®, and Saizen®.

Policy

BCBSNC will provide coverage for growth hormone (GH) when it is determined to be medicallynecessary because the medical criteria and guidelines shown below are met.

Benefits Application

Please refer to certificate for eligibility of benefit. See Professional Services. This drug is prior

approved for PCP only.

When Growth Hormone (GH) Is Covered

The following conditions are FDA-approved labeled indications for growth hormone(GH) therapy. (See Policy Guideline section for specific requirements.) For each of these

clinical situations, GH is considered medically necessary:o Children who have growth failure, defined as having fallen 2 standard deviations

off his/her predicted growth curve (as defined under Policy Guidelines) due to

inad- equate secretion of normal endogenous growth hormoneo Children with chronic renal insufficiency before renal transplant



o Children with Turner's syndrome, i.e., a 45, XO genotypeo Adults with congenital or acquired GH deficiency (e.g., pituitary dwarfism)

o Patients with AIDS wastingo Turner's Syndrome

In addition, recombinant human GH therapy is medically necessary for the followingFDA off-label use:

o Promotion of wound healing in burn patients

When Growth Hormone Is Not Covered

The use of GH is contraindicated in children with active malignancies-

FDA off-label applications for human growth hormone therapy consideredinvestigational are not covered. They include the following:

o Non-GH deficient short stature, except for Turner's Syndromeo Constitutional delay (lower than expected height percentiles compared with their

target height percentiles) and delayed skeletal maturation when growth velocities

and rate of bone age advancement are normal. (Height is measured in percentilesof average height; for example, people in the 25th percentile are shorter than 75%of the general population.)

o Therapy for geriatric patientso Anabolic therapy, except for AIDS, provided to counteract acute or chronic

catabolic illness (e.g., surgery outcom~s, trauma, cancer, chronic hemodialysis)

producing catabolic (protein wasting) changes in both adult and pediatric patients

o Anabolic therapy to enhance body mass or strength for professional, recreational,

or social reasonso Glucocorticoid-induced growth failureo Intrauterine growth retardationo Short status after renal transplantation

o Short stature due to Down, Noonan's, or Prader-Willi syndromes Diagnostic tests that are considered investigational are not covered. These include:

o 24-hour continuous monitoring of growth hormone levels

o Serum levels of insulin-like growth factors (IGF) or insulin-like growth factor binding protein (IGFBP)

Policy Guidelines

All claims for growth hormone (GH) will be subject to medical review.

The following guidelines should be followed in use of the growth hormone:o In use for children and adults with proven growth hormone deficiency, proof is

defined as an abnormal response of less than 10ng/ml to two provocative



stimulation tests (e.g., L-dopa, clonidine, glucagon, propranolol, arginine, or insulin challenge test). Both responses must be abnormal.

o Chronic renal insufficiency is defined as a serum creatinine of less than 30 mg/dlor a creatinine clearance between 5 and 75 ml/min per 1.73 m2.

o AIDS wasting, defined as greater than 10% of baseline weight loss that cannot beexplained by a concurrent illness other than HIV infection. Patients treated with

GH must simultaneously be treated with antiviral agents. Therapy is continueduntil this definition is no longer met.

o GH therapy for burn patients should be limited to those patients with third-degree

burns.o In children, GH therapy is typically discontinued when the growth velocity is less

than 2 cm per year, when epiphyseal fusion has occurred, or when the height

reaches the 5th percentile of adult height. In patients with chronic renal failureundergoing renal transplantation, GH is discontinued at the time of transplant.

Billing/Coding/Physician Documentation Information

BCBSNC may request medical records for determination of medical necessity. When medicalrecords are requested, letters of support and/or explanation are often useful, but are not sufficient

documentation unless all specific information needed to make a medical necessity determinationis included.

Policy Key Words

Human growth hormone, growth hormone, GH, GHD, Humatrope, Nutropin, Somatrem,

Somatotropin, Protropin

Medical Term Definitions

Epiphyseal

the end of a long bone, usually wider than the shaft and comprised primarily of cartilage

Pituitary gland

gland in the head responsible for producing the growth hormone (somatotropin)

Scientific Background and Reference Sources

1995 AMA Dry Information

2/96 TEC Bulletin

Lawson Wilkins Ped. End. Soc., Guidelines for the use of growth hormone in children with shortstature, The journal of Pediatrics, 1995; 127:857-67.

11/97 BCBSA Medical Policy Reference Manual



1999 USPDI

1999 AHFS Dry Information

3/99 BCBSNC Corporate Pharmacist

3/99 Independent Consultant Review

12/99 Medical policy Advisory croup

Policy Implementation Update Information

8/96 Original policy issued

3/99 Revised, Included approved adult indications. Changed policy guidelines for adults to

include one provocative stimulation test instead of two.

5/99 Reformatted; description of service changed and medical term definiti.ons added.

12/99 Medical Policy Advisory Group

Medical policy is not an authorization, certification, explanation of benefits or a contract, Benefitsand eligibility are determined before medical guidelines and payment guidelines are applied..Benefits are d~termined by the group contract and subscriber certificate that is in effect at thetime services are rendered. This document is solely provided for informational purposes only and

is based on research of current medical literature and review of common medical practices in thetreatment and diagnosis of disease. Medical practices and knowledge are constantly changing andBCBSNC reserves the right to review and revise its medical policies periodically.

Benefits Administration Policy

Often, coverage decisions do not require clinical interpretation of medical necessity or

appropriateness or a determination as to whether a particular service is experimental or investigational. Decisions such as these are guided by a health plan's benefits administration

policy. A health plan's benefits administration policy evaluates clinical services against specific benefits language rather than against scientific evidence.

In some cases, benefits administration policy does provide clinical input to see that services areappropriate, but the purpose of this information is to facilitate coverage decisions by interpreting

the contract language and not to evaluate medical evidence. For example, when health plan personnel consider coverage of durable medical equipment, they might consult the applicable benefits administration policy to determine if a particular type of medical equipment is covered

by the contract. The benefits administration policy might provide a list of equipment to indicatethat certain "basic" models are covered, but specific "deluxe" models are not. Benefitsadministration policy may also include

Benefits Administration Policy may include:

Information used to determine dependent eligibility, continuation of coverage, or coordination of benefits with other benefit plans



A database of current procedural terminology (CPT) codes and the usual, customary, andreasonable (UCR) fees for each code

A list of services for which the member must obtain preauthorization from a primary care

provider (PCP), such as services from specialists

Fast Definition

Du r able medical equipment refers to healthcare equipment that is designed for repeated

use rather than disposal after a single use or after use by one patient, such as homehospital beds, wheel chairs, and oxygen equipment.

A current procedural terminology (CPT) code is a five-digit number that identifies each

medical service or procedure included in a classification system established by theAmerican Medical Association.

A usual, customary, and r easonable (U CR) f ee is the amount that physicians within a particular geographic region commonly charge for a particular medical service.

Administration Policy

In addition to medical policies and benefits administration policies, both of which address what is

covered, health plans maintain policies that provide guidance on how to administer the processesfor making coverage determinations. These administrative policies outline processes and

procedures for the development, application, and revision of medical and benefits administration

policies , including a reconsideration and appeal process for providers and members to resolve

disputes with the health plan. Administrative policies are often based on specific regulatoryrequirements or, in the case of health plans that obtain private accreditation, specific accreditationstandards.

Administrative policies govern day-to-day implementation of medical and benefits administration policies. For instance, administrative policies specify timeliness requirements for review of medical necessity, such as 20 days from the date of the complaint for reviewing medical necessityquestions on non-life-threatening conditions. Administrative policies also document which

medical management activities may be delegated to providers or other entities and the degree of oversight needed to monitor such delegated services.

A health plan's administrative policy on appeals contains the guidelines to be followed whenhandling member and provider complaints and disputes, which can pertain to a wide variety of issues ranging from questions of medical necessity to the courtesy of health plan personnel. We

discuss the member appeals process in more detail in the lesson, Utilization Review.

Figure 2A-4 summarizes the characteristics of the three types of coverage policy.



Purpose and Scope of Medical and Benefits Administration Policies

Health plans use medical and benefits administration policies to improve the likelihood that

Members receive medically necessary and appropriate care within the framework of the

contract and are protected from unnecessary and unproven services Coverage decisions are consistent with the purchaser's contract Coverage decisions are legally defensible and in compliance with all applicable

regulatory requirements

While benefits administration policy is generally established by health plans in collaboration with purchasers, medical policy is established in accordance with evidence-based medicine and inputfrom relevant expert providers, with little, if any, input from purchasers. Both must be inaccordance with applicable state and federal laws.

Contract provisions and benefits administration policies vary from one health plan to another. For

example, different health plans may have different positions on covering certain types of caresuch as behavioral healthcare, rehabilitative care, and reproductive therapy. A health plan mayalso have different contract provisions and benefits administration policies for its different

purchasers.

A number of factors help a health plan determine whether to cover a particular service. Suchfactors include (1) state mandates, (2) safety and effectiveness, (3) cost-effectiveness, and (4) the

preferences of purchasers and members.

Benefits administration policy usually addresses the entire continuum of care, including

Preventive services, such as wellness programs, prenatal care, immunizations, routineexaminations, and disease screening

Primary care Services from healthcare specialists



Mental/behavioral healthcare Acute care, such as inpatient hospital care and emergency care

Inpatient care at other types of healthcare facilities, such as skilled nursing facilities Prescription drugs Vision care, dental care, and other ancillary healthcare services, if applicable Follow-up care, such as rehabilitation and home healthcare

Medical policies, on the other hand, are confined to an evaluation of whether specific services,

procedures, medical devices, or drugs are medically necessary and appropriate and neither experimental nor investigational.

Considerations for Medical Necessity and Appropriateness

Health plans must consider a number of factors when determining if services are medicallynecessary and appropriate. For example, defining medically necessary and appropriate services

strictly according to evidence-based medicine effectively eliminates coverage for some treatmentsthat have not undergone rigorous clinical studies but that may be effective treatments nonetheless.The lack of studies in some cases is because the procedure is so widely used with good effect thatto design an experiment with a control group (i.e., patients who do not receive the treatment

under study) would result in individuals in the control group being denied treatment that commonmedical knowledge considers safe and effective.

Experimental services are services that have not been tested for safety and effectiveness or are being tested outside standard clinical trials. I nvestigation al ser vices are services that are being

tested in humans for safety and effectiveness in accordance with standard clinical trials and for which conclusive results are not yet available.

1The two terms are sometimes used in conjunction

(experimental/investigational services) to refer to interventions for which the safety and

effectiveness have not been established.

Sometimes, patients are willing to try new or unproven treatments for medical conditions thathave not responded to conventional treatment. In addition, the medical and scientific communitiesmay embrace new medical technologies before research has been completed. Because of thesefactors, most contracts exclude experimental and investigational procedures. In addition, medical

policies indicate which procedures are considered experimental or investigational for specificconditions.

Typically, health plans rely on peer-reviewed medical studies and opinions from nationallyrecognized medical experts to develop policies concerning services that are considered

experimental or investigational. Also, health plans often use an internal review process thatincludes network providers. Some health plans have a team dedicated to evaluating new medicaltechnology.

Proving the effectiveness of a new medical technology may require a research period of severalyears or more. The wait sometimes frustrates patients who are anxious for a cure, while also

creating difficulties for health plans seeking to apply medical necessity and appropriateness provisions based on a requirement that the treatment meet an evidence-based standard of proof.

A prominent example of a controversial experimental treatment is the use of autologous bonemarrow transplants (ABMT) for various medical conditions. Although clinical research has

proven bone marrow transplantation effective in some diseases, for other conditions, the evidence



on the benefits and drawbacks of this approach is inconclusive. When evidence-based medicaldata is not sufficient to guide clinical decisions, as is the case with emerging technologies, a

variety of factors (some not medically related) can influence what is considered an appropriate

course of treatment. As Insight 2A-12 illustrates, the widespread use of a particular medicaltreatment, consumer demand, public opinion, and government mandates all have the potential toaffect a health plan's medical policy.

Once a particular drug has received approval from the Food and Drug Administration (FDA), it is

no longer considered experimental or investigational. However, even after the FDA approves adrug, questions of medical appropriateness may arise if that drug is prescribed for off-label use .Off-label use refers to a situation in which a healthcare practitioner prescribes a drug for clinical

indications other than those stated in the labeling approved by the FDA. For example, using adrug to treat prostate cancer when the FDA originally approved the drug to treat lung cancer is anoff-label use. The FDA's long-standing policy has been not to interfere with off-label uses, citing

a reluctance to interfere with the practice of medicine.3

I nsight 2A-1. AB M T and L ate-Stage Br east Cancer.

The procedure known as autologous bone marrow transplant (ABMT) has been proven effective

in treating certain types of cancer, such as leukemia and lymphoma. However, clinical sciencehas not yet demonstrated that this painful, expensive, and high-risk procedure is successful ineither curing or prolonging the life expectancy of late stage breast cancer patients. In the case of

breast cancer, several factors combined to delay the process of evaluating the effectiveness of ABMT.

For new procedures, such as ABMT, evidence-based data is often obtained through clinical trials. In clinical trials, patients are randomly assigned to either (1) a group that receives the

treatment being studied or (2) a control group that receives conventional therapy. Patients do not know which group they are assigned to, so they cannot be sure that they are receiving thetreatment that is being studied.

At the time ABMT first started receiving attention as a potential treatment for late stage breast cancer, many patients were unable to obtain coverage because their health plans excluded ABMT

as an investigational procedure. In addition, many patients were unable to enroll in ABMT trialsbecause their health plans typically did not provide coverage for clinical trials. However, evenwhen breast cancer patients did have access to clinical trials, they were reluctant to participate

in the ABMT trials because they did not want to take the chance of being given the conventional therapy.

Various factors combined to convince breast cancer patients that ABMT was their last best hope. A number of physicians recommended it and soon the media began to run stories that touted it as

a promising new procedure. Public pressure quickly mounted for health plans to cover ABMT and, in response, government programs and a few states mandated coverage. In addition, some

patients filed lawsuits to force health plans to provide coverage. Consequently, health plans werecompelled to treat ABMT as a medically appropriate procedure for breast cancer even though

recent clinical studies have shown that it is no more effective than less risky conventional procedures.

In part to avoid problems like those that surrounded the use of ABMT and breast cancer, a growing number of health plans now provide coverage for clinical trials. Also, America's Health



Insurance Plans (AHIP)and the National Institutes of Health (NIH) have entered into anagreement intended to make clinical trials available to more health plan subscribers and their

families. AHIP encourages its member plans to cover the costs associated with NIH-sponsored

clinical trials, provided the cost does not substantially exceed the amounts that would have beenincurred for the conventional course of treatment on an in-network basis.

Impact of the Purchaser Contract on Coverage Policies

As we saw in The Role of Medical Management in a Health Plan , an essential provision in thecontract between the health plan and the purchaser is the coverage requirement that healthcare

services be medically necessary and appropriate to support the (1) safety, (2) clinicaleffectiveness, and (3) cost-effectiveness of care. Medical policies guide a health plan's personnelin making these types of decisions.

Because medical policy and benefits administration policy are closely linked to the purchaser's

contract, it is important to understand how the contract works. Figure 2A-5 describes somecommon provisions contained in the contract between a health plan and a purchaser.

Determining whether a particular service, medical device, or drug is covered under the contractcan be a complicated process. Medical and benefits administration policies expand upon coverage

provisions in the contract and provide guidance for decision-making. For example, a health plan

may rely on such policies to determine whether the custodial care exclusion in the contractapplies to a particular service. The gradations of services between skilled care (which is typicallycovered) and custodial care (which is typically excluded) are often subject to dispute. Benefits

administration policies can help health plan personnel consistently evaluate if specific servicesare actually covered according to the purchaser's contract.



As Insight 2A-2 explains, it is impractical to specifically address all the criteria for all coveragedecisions in a contract. Consequently, health plans rely upon medical and benefits administration

policies to provide the additional information that is sometimes needed to make coverage

determinations. These policies are typically approved, documented, organized, and madeavailable in manuals, a collection of memos, an electronic database, or a combination of theseformats.

If the contract contradicts a specific medical or benefits administration policy, then the contract,

which is a legally binding document, takes precedence. Similarly, if a medical or benefitsadministration policy addresses a benefit or exclusion that is not included in the contract, then themedical or benefits administration policy does not apply. The contract takes precedence in all

situations, except when it fails to reflect applicable state or federal requirements. Ideally, all suchrequirements are incorporated into the contract, medical policy, and benefits administration

policy; but if not, then regulatory requirements govern.

I nsight 2A- 2. The Need for M edical and Benefi ts Admini stration Poli cies.

Theoretically, a health plan could include in its contract every piece of information that is used tomake coverage decisions. However, health plans maintain information in medical and benefitsadministration policies outside the contract for several reasons.

First, if all the information included in medical and benefits administration policies (see Figure2A-3 for an example of just one uncomplicated medical policy) were included in the contract, the

sheer volume and complexity would be overwhelming.

Second, the contracts would require constant amendments to keep pace with the extremely

dynamic, rapidly changing healthcare environment.

Third, medical and benefits administration policies provide decision-making guidelines, rather

than legally binding contract provisions, thus allowing the health plan to make exceptions based on individual circumstances. If all these policies were included in the contract, there would belittle contractual leeway for exceptions.

Impact of the Purchaser Contract on Coverage Policies

Health plans that have different product lines need to specify in their medical and benefitsadministration policies any variations in covered benefits across product lines. For example, a

particular healthcare service may be a covered service under the health plan's point of service

(POS) contract, but may be excluded under its HMO contract. Or coverage for physical therapy

may be unlimited under a health plan's HMO contract, but may be limited to a certain number of days under its PPO contract. In making coverage determinations, health plan personnel must be

aware of these types of product differences. Medicare health plans must cover all servicesallowed by the Medicare program and, therefore, health plans must note where Medicare differsfrom their coverage for their commercial products. Furthermore, health plans must be careful to

see that their contracts, medical policies, and benefits administration policies are consistent intheir definitions of medical necessity and appropriateness across product lines.

Health plans sometimes provide extra-contractual coverage , also called administrative coverage,when they wish to authorize a particular service or supply that, although not covered by thecontract, might provide a significant benefit to a member. In this situation, the health plan's



administrative policy establishes the procedure for evaluating the value of noncovered services,while the plan's utilization review program is used to guide the health plan in choosing the proper

course of action in each particular case.

Health plans usually implement administrative coverage when they believe that the additional

expenditure for the noncovered service will be offset by lower long-term costs of care for amember. For example, suppose that a plan member with severe arthritis has difficulty getting inand out of the bathtub and needs handrails installed to assist with this activity. Even if the benefit

contract does not cover the cost of the rails and installation, the health plan may decide toauthorize payment for the rails and installation to reduce the likelihood of the member falling and

possibly experiencing a serious injury. In addition, the coverage of benefits outside the contract

may serve to improve the quality of life for the member.

A certain amount of risk is involved in providing administrative coverage because it may set a precedent for the health plan to pay benefits for other noncovered services in the future. One

approach that health plans take to reduce this risk is to include an alternative care provision intheir contracts. An alternative care provision is a contractual provision or a rider that states that,

at the discretion of the health plan, noncovered services are considered to be covered, providedthey are medically appropriate and comparable in cost to the applicable covered services.Similarly, a health plan may prepare a letter, as needed, to document that services are being

covered on an exception basis. Both the health plan and the member sign this letter, which is not a part of the contract, to indicate their understanding and agreement.

The health plan should be aware of any applicable laws or regulations regarding care alternatives.For example, in Washington, if a patient who meets the criteria for inpatient hospital care

requests care in another setting (e.g., in a skilled nursing facility or in the patient's home), thehealth plan must cover the care in the alternative setting.

Quality-of-Life Considerations for Medical and Benefits Administration Policies

One issue that health plans have to contend with is coverage determinations related to care thatmay be classified as quality-of-life services. Typically, quality-of-life services are not associatedwith a specific disease or injury, but with diminished function, such as infertility or impotence.

Sometimes, however, the line between disease and function is blurred. Usually, the contract or benefits administration policy states whether or not coverage is provided for treatments for hair loss, impotence, infertility, weight management, memory loss, birth control, and incontinence.

Further, the benefits administration policy might state which therapies for quality-of-life issuesare covered, and the medical policy might list the clinical circumstances under which a specificquality-of-life therapy is covered. For quality-of-life services, some health plans apply unique

authorization systems or contract provisions, such as a case-by-case review of need or specific benefit limits.

Monitoring Medical and Benefits Administration Policies

Because of rapid changes in healthcare technology and the regulatory environment, a health planmust closely monitor and modify its medical and benefits administration policies. If a health planfails to keep its medical and benefits administration policies current, then functions such as

quality management (QM), utilization management (UM), and claims administration might become inconsistent with each other, as well as with the contract, current medical evidence,current medical practice, and legal and regulatory requirements. Health plans that have lengthy



policy resources may review part of the policy each year, with a goal of routinely reviewing allthese resources every two to three years.

In addition to conducting ongoing or periodic reviews of its medical and benefits administration policies, a health plan performs reviews and makes modifications on an as-needed basis. For

example, whenever an existing medical policy no longer reflects current medical practice, themedical policy needs to be revised. Factors that could prompt a review of medical policy include

New scientific evidence Significant changes in medical practice

Matters of safety for plan members or providers New legal or regulatory agency requirements for the delivery of medical services Changes in accrediting agency standards

Medical services that are new from a technological standpoint (for example, a newmagnetic resonance imaging scan)

Medical services that are new from a procedural standpoint (for example, a new surgicaltechnique)

Health plans must incorporate newly mandated benefits and other laws and regulations into their

medical and benefits administration policy resources on a timely basis, which often presents achallenge, especially when trying to comply with the multitude of state requirements. In addition,health plans that seek accreditation must have medical and benefits administration policies that

meet applicable accreditation standards. For example, the National Committee for QualityAssurance (NCQA) uses Health Plan Employer Data Information Set (HEDIS) measures, such as

preventive care measures pertaining to childhood immunizations, flu shots for older adults, and

breast cancer screenings, to evaluate a health plan's effectiveness of care.

One critical aspect of maintaining current, appropriate medical policies is technology assessment,as we will discuss in the next section.

Medical Policy Development

Technological advances in medicine have contributed to the U.S. population's longevity and itsquality of life. Many providers, purchasers, and consumers tend to assume that new medicaltechnology means more effective medical care. Often, however, the effectiveness and safety of a

new treatment or procedure has not been established at the time of its introduction, as we saw inInsight 2A-1. Further, advances in medical technology have also contributed to the increasedcosts of healthcare. Careful development of medical policies is necessary to address concerns

about safety, effectiveness, and cost-effectiveness.

To make informed decisions about the safety and effectiveness of medical technologies, health plans rely on technology assessment , a process that evaluates the clinical aspects of new medical procedures, devices, drugs, and tests (as well as new applications of existing medical technology)to determine which approaches should be incorporated into the plan's medical policy. Technology

assessment may also be applied to older tests and treatments that scientific evidence suggests may be obsolete or to nontraditional approaches to healthcare, such as acupuncture or herbal remedies,that are becoming increasingly popular. The use of technology assessment for evaluating

currently accepted practices is sometimes controversial since many of these practices are basedon accumulated experience without formal scientific evidence.



Technology assessment provides the scientific rationale for covering or not covering a serviceand for the medical policy section that specifies when the service is appropriate and when it is

not. Examples of technology assessment include evaluations of

Tests, such as a new prostate-specific antigen (PSA) test, for screening prostate cancer

Treatments, such as bone marrow transplants for various types of cancer or other diseasessuch as sickle cell anemia

Devices, such as coronary artery stents and lasers for various applications

Procedures, such as minimally invasive (laparoscopic) heart surgery

Evaluation of New Treatments

The medical policy development process varies by health plan. Health plans may conducttechnology assessment on a national, regional, or (in the case of small plans) local level.Typically, technology assessment is conducted internally by a health plan, although many health

plans obtain safety and effectiveness information from other organizations to accelerate theassessment process. Several external organizations offer technology assessment services. Health

plans also collectively pool resources needed for high level assessments. In all cases, the finalassessment decisions are made by the health plan.

In many health plans, either the quality management committee or the medical advisory

committee oversees medical policy development for new procedures, devices, and tests. Other health plans have committees specifically dedicated to the oversight of this activity. The

pharmacy and therapeutics (P&T) committee usually oversees the evaluation of new drugs.

A health plan needs to see that its medical policy development follows a logical progression to

the accept-reject decision and that technology assessment is neither too narrowly focused nor tooinclusive. If a health plan's technology assessment is too strict, it will reject technologies that areeffective medical services. On the other hand, less stringent assessment may result in waste of

health plan resources on services that are not effective or that may endanger plan members.

Medical Policy Development

Although each health plan tailors medical policy development according to its own goals,

resources, and limitations, the process generally includes the following four steps:

1. Identification and research of promising new technologies2. Clinical review of the research findings and the proposed medical policy

3. Operational review of the proposed policy's impact on the health plan4. The decision to accept or reject a proposed policy

Identification and Research of New Technologies

The purpose of the first step is to gather information on a new technology and draft a proposed

medical policy. The technology evaluation staff in a health plan monitor new developments andgather evidence regarding the most promising technologies. Staff members may learn about newtechnologies from a variety of external sources, such as medical literature, general media reports

on healthcare issues, providers, members, purchasers, and pharmaceutical and devicemanufacturers' sales representatives. Internal sources (e.g., medical directors, provider relationsrepresentatives, and sales representatives) may also provide leads about new medical approaches.



To gather information about the safety and effectiveness of new technology, staff membersreview information from a variety of research sources, including:

Published information in peer-reviewed medical journals Position statements and technology assessments from specialty medical societies

Policies of federal health agencies such as the FDA, the Centers for Medicare andMedicaid Services (CMS), and the Agency for Healthcare Research and Quality (AHRQ)

Opinions of experts not affiliated with the health plan, often physicians from academic

medical centers

The staff may also consult external resources that specialize in medical technology assessment.Figure 2A-6 briefly describes several professional organizations whose recommendations mayinfluence a health plan's medical policy development. Many of these and other organizations

provide Web site access to information on technology assessment. Consulting these resources isnot a one-time event. Health plans need to monitor the safety and effectiveness of medical

technology and obtain access to independent reviews of experimental or unproven technology onan ongoing basis.

The staff members then prepare an evaluation report, which summarizes their findings on safety,

effectiveness, and any problems with the technology, and draft a proposed medical policy. Thestaff report may also include information on the costs of the technology and any specialconsiderations for implementation. Typically, the next step in the assessment process is a clinical

review of the proposed policy and evaluation report.



Clinical Review

In some health plans, an internal review panel, composed of a health plan's medical directors and

other physician employees, reviews a proposed medical policy and makes recommendations onwhether to accept, modify, or reject the policy. In other health plans, a standing committee that

addresses clinical issues, such as the medical advisory committee (for new devices, procedures, or treatments) or the pharmacy and therapeutics committee (for new medications) performs theclinical review. Recall from The Role of Medical Management in a Health Plan that such

standing committees typically incorporate community providers as well as health plan personnel.Regardless of the panel structure, the focus of the clinical review is on the impact of the medical

policy on clinical outcomes.

A health plan may develop its own clinical review criteria for assessing technology, or it may use

existing criteria, such as the assessment criteria developed by the Technology AssessmentCommittee of the Institute for Clinical Systems Integration (ICSI), which is presented in Figure

2A-7.

The clinical review often occurs prior to the operational review, although some health plans perform the two types of review simultaneously. In some cases, a single multidisciplinary panel

performs both types of review.



Operational Review

The operational review panel may include representatives from finance, claims administration,

legal affairs, member services, marketing, quality management, and network management. This panel analyzes the expected impact of a proposed medical policy on financial outcomes, member

and provider satisfaction, and operating efficiency.

The financial analysis considers both the cost-effectiveness of a new technology compared toexisting interventions and the potential cost impact of a medical policy on health plan premiumsand provider reimbursement. Since premiums are based on actuarial forecasts of the cost of care,

a new technology that substantially impacts healthcare delivery costs must be taken intoconsideration when premium rates are developed. In addition, if a health plan pays providers on acapitated basis, the financial impact of a new technology might impact provider reimbursement

arrangements. For example, if covering an expensive new technology places an undue burden oncertain providers because of the equipment required, the health plan might decide to adjust the

capitation rate to take into account the increased cost of care. Unfortunately, data for in-depthfinancial analysis is often lacking, especially early in the life of a new technology.

The operational review panel determines whether the plan's existing delivery system of network

providers and facilities can deliver the care described in the proposed policy. The panel alsoconsiders the capabilities of the health plan's medical management and claims administration

processes to accommodate the proposed policy as it is written. For example, does the current

claims coding system cover the technology? If not, how should providers code it? Another consideration for this panel is any impact that the proposed policy may have on the health plan'scompliance with laws, regulations, or accrediting standards.

The Accept-Reject Decision

Following the clinical and operational reviews, the health plan makes a decision on whether to

adopt a proposed medical policy. Depending on the structure of the health plan and its medical policy development process, the committee overseeing the development process (e.g., the medicaladvisory committee), a higher level committee (e.g., the quality management committee), or the

board of directors may make the actual decision. If a higher level committee or the board of

directors makes the final decision, then the committee overseeing medical policy developmenttypically plays an advisory role and submits its recommendations.

The accept-reject decision often depends on how a new technology compares to currently usedinterventions. Generally, when compared to an existing technology, a new approach may be

rejected because of

Inferior safety or effectiveness Few or no clinical advantages Higher costs coupled with no significant clinical advantages Insufficient information about benefits and/or drawbacks

If a proposed policy is accepted, then the new medical policy is distributed to the various health

plan departments affected by the change (e.g., utilization management, quality management,claims administration, and marketing) and to network providers



Clinical Practice Guidelines

Recall from The Role of Medical Management in a Health Plan that a clinical practice guideline

is a clinical practice management tool intended to guide providers in the delivery of care toindividual patients. Through CPGs, health plans encourage providers to follow standards of care

and, thus, deliver consistent, efficient, and high-quality healthcare.

The documents and resources that we refer to as clinical practice guidelines in this course are alsoknown as clinical guidelines, practice guidelines, practice parameters, practice policies, or clinicalcriteria. Regardless of what they are called, however, these documents and resources are intended

to state, clearly and systematically, the appropriate care for a specific type of patient in specifiedclinical circumstances, providing a framework for care while also allowing for patient-specificvariations, based on physician judgment.

In addition to providing guidelines to healthcare practitioners, CPGs have a number of other uses.

They are frequently integrated into medical policies to guide health plan decision-making aboutmedically appropriate services, and they often form the basis for health plan activities intended toinfluence the quality of care delivered to plan members. CPGs are an integral part of QM and UM

programs, such as disease management. In some health plans, CPGs serve as the basis for

evaluating whether providers are practicing in accordance with accepted standards. Some health plans even include CPGs in their member education programs. Finally, CPGs enable health plansthat seek accreditation to satisfy applicable criteria for quality management of medical service

delivery. For example, NCQA states that a health plan has a responsibility to adopt or developCPGs for acute and chronic care services that are relevant to the member population.

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CPGs usually take the form of guidelines that are intended to provide healthcare practitionerswith an outline of the accepted standard of care based on a summary of the current medical

evidence. Many of a health plan's CPGs focus on the prevention or early detection of a particular condition. For example, to help detect breast cancer, CPGs might recommend a single baselinemammogram for women ages 35 through 39, followed by one mammogram every one to twoyears for women ages 40 through 49, and one mammogram every year for women ages 50

through 69.

CPGs may outline the course of care in sequential order for a given condition. They are often presented in a clinically detailed, step-by-step plan for delivering care. For example, in the case of a patient with suspected congestive heart failure, the CPGs might initially indicate that an

electrocardiogram (EKG), specified blood tests, and a chest X-ray be done, followed by treatmentwith oxygen and diuretics as indicated by the tests.

CPGs indicate the approach that can generally be expected to work best with respect to a particular medical condition. A health plan establishes CPGs to achieve the best possible outcome

in the most cost-effective way by increasing consistency of care for routine, uncomplicated cases.With this objective in mind, some health plans audit and track compliance with CPGs. However,a health plan needs to temper this standardization of medical procedures with the flexibility toaccommodate the needs of different plan members. CPGs are guidelines, not strict policies, and

are intended to be flexible. The only requirement for a provider to vary from the guideline is thedocumentation of a sound clinical reason for the variation.



In addition, a health plan's CPGs must be regularly reviewed and updated to reflect medicaladvances and changes in the legal and regulatory environment. Insight 2A-4 shows the essential

characteristics of an effective CPG, according to AHRQ.

A health plan's covered services must also be consistent with the CPGs that it uses. For example,

if a health plan's benefits administration policy indicates that positron emission tests for coronaryartery disease are not covered, then the CPGs for coronary artery disease should generally notinclude this test as a recommended option.

Often, the first step in developing CPGs occurs when the health plan identifies an area in which

new or modified CPGs are needed. The sources of information about the need for new CPGs or modifications include medical literature, network providers, health plan medical directors or other medical staff, and provider relations representatives.

The health plan then decides whether to develop their own CPGs or adopt existing guidelines.

Many health plans adopt existing, nationally valid CPGs to reduce the likelihood that providerswill be overburdened by a variety of CPGs from different health plans pertaining to the samecondition. Figure 2A-8 lists various sources that health plans may use when developing CPGs.Many health plans also solicit network providers' input into the development or selection process.

Once the appropriate CPGs have been developed or identified, the health plan's medical policy

director submits the recommendations to the appropriate health plan committee (typically themedical advisory committee or quality management committee) for review. The committee inturn may present its CPG recommendations to the health plan's senior management or board of

directors for approval.



Implementation Strategies for CPGs

It is essential for health plans to bridge the gap between developing CPGs and making sure thatCPGs are put into practice. Successful implementation is accomplished by attempting some or all

of the following measures:

Establishing guideline credibility by incorporating information from resources that

providers know and respect Involving local providers in the development process and allowing some customization

of the guidelines according to the medical practice conventions in the area

Recruiting opinion leaders that the providers trust to assist with dissemination of CPGs Measuring and reporting improvements in outcomes that result from the use of CPGs Introducing CPGs gradually into the provider community, with the initial focus on

clinical conditions that providers consider most important or encounter most frequently Presenting CPGs as decision support tools (recommendations) rather than requirements



Dividing lengthy guidelines into interrelated modules to facilitate usage Making CPGs available in an interactive computerized format

Providing preprinted patient education information and flowsheets that are consistent

with CPGs for common health problems Keeping guidelines current with changes to generally accepted medical practices Working with other health plans in the region, state, or locality to develop guidelines that

are consistent across health plans and relevant to the needs of the member population Giving members health education guidelines that are based on and consistent with current

CPGs to help members understand their conditions, comply with recommended

treatment, and ask their providers appropriate questions

For clinical practice management, risk management focuses on developing and implementingclinically sound and clearly presented policies and guidelines that comply with all applicableregulatory requirements. As we have seen, health plans strive for clinical practice parameters that

are scientifically sound. Rigorous examination of the available scientific evidence when assessing

new medical technology or developing CPGs demonstrates due diligence and good faith on the part of the health plan.

Furthermore, the involvement of network providers and other healthcare experts in clinical practice management activities increases the likelihood that the plan's policies will reflect both

current standards of medical practice and any special considerations for particular member populations. Well-crafted benefits administration and medical policies, which form the basis of ahealth plan's UM programs and claims administration, help demonstrate that decisions are made

in good faith, thereby reducing the risk of litigation.

In addition to scientific trends, health plans continuously monitor new legislation and courtdecisions that might affect clinical practice management. They then incorporate relevant changes

into their policies and programs.

Also, health plans should see that all documentation of covered services-such as marketing brochures, contracts with purchasers, certificates of coverage, and contracts with providers-are

consistent and accurate. These documents must all present the same benefits, exclusions, andlimitations as described in the plan's benefits administration and medical policies. Thesedocuments must be

Reviewed and updated on a regular basis

Readily available during the course of member or provider appeals In compliance with all applicable state and federal regulations such as benefit mandates

and process requirements

Finally, it is essential for health plans to inform members and providers of their right to appeal

coverage decisions. A consistently administered appeals process can resolve disputes in a fair,open, and timely manner and reduce the likelihood that a court will decide that a plan has beennegligent or operating in bad faith.

Lesson 4 Clinical Practice

Documents

Transcript of Lesson 4 Clinical Practice