Often contained in payers’ participating provider agreements (PPAs) and provider manuals are criteria for accepting or rejecting medical claims. The problem for providers, leading to numerous legal disputes over denied claims, is that nowhere in the published care guidelines used by health plans is medical judgment listed.
In theory, these Milliman® (also InterQual®) care guidelines—which purport to use evidence-based medicine from published, peer-reviewed articles to ensure optimal patient care—are superior to, but meant to be used in conjunction with, medical judgment.
In reality, Milliman criteria act as a poor substitute for medical judgment in payers’ evaluation of provider claims. Despite employing their own in-house medical directors, health plans routinely use published guidelines to ignore medical judgment in evaluating claims as medically unnecessary, leading to capricious claim denials.
Nevertheless, PPAs contractually obligate payers to reimburse providers for medically necessary, covered services. Moreover, PPAs prohibit health plans from dictating decisions on the type of care provided to patients, whether inpatient, outpatient, elective or emergency. Those decisions are rightly left to the provider’s medical staff.
Doctors do not have a crystal ball regarding clinical outcomes. Treating physicians often begin patient care with incomplete information and must use their best medical judgment in testing and recommending a course of treatment. They work with a limited flow of information in real time, often under difficult circumstances, before arriving at a conclusion.
Yet the lack of respect for medical judgment in the published care guidelines has led to an increase in the number of arbitrary reimbursement denials of medically necessary, covered claims. For example, using Milliman criteria in their retrospective review procedures, payers frequently deny claims based on positive patient outcomes. In this way, they can label all the provider’s treatment and testing leading to the final diagnosis as medically unnecessary—even the diagnostic services that ruled the suspected conditions in or out in the first place.
Clearly, the only appropriate medical necessity standards are those employed by experienced and qualified physicians, not by a set of published commercial guidelines. Medical staff who care for patients are the best judges of what is medically necessary and reimbursable care.
Therefore, medical judgment should be on a par with published criteria in every payer-provider contract. Providers must be vigilant in negotiating contracts so that PPAs clearly state that medical judgment is among the criteria establishing medically necessary services and optimum patient care. Furthermore, PPAs should express that any conflict between medical judgment and utilization criteria favors medical judgment.
Anderson & Quinn, LLC is a renowned law firm based in Rockville, Maryland, providing individuals, businesses, corporations, and healthcare institutions with the legal and litigation support they need.
