CASE STUDY: HMO Medical Necessity

CASE BACKGROUND: A 16 year old student-athlete suffered a PCL grade 2 partial tear, has knee instability due to ligament insufficiency/deficiency, and was prescribed Physical Therapy care and a custom knee brace by his Orthopedic Doctor that is considered an integral part of orthopedic protocol. The payor, Monarch Healthcare, approved the Physical Therapy, but the custom knee brace was denied by Monarch’s Associate Medical Director who is a Pediatrician. Initial review was substandard, hindered by financial or administrative burdens and Monarch refused to review the matter upon appeal, stating only Health Net could be appealed.

ERN/NCRA ACTION: We filed an Independent Medical Review (IMR) with the DMHC citing Monarch’s and Health Net’s failure to satisfy their responsibilities under State Law:

Establishing Prospective Policies and Procedures and Notice Requirements

Plans must have policies and procedures [for prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, requests by providers of health care services for plan enrollees], and shall ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes. (Health & Safety Code §1367.01(b) (h)(4))

A Competent Medical Review

Upon an appeal to the plan of a contested claim, plans shall refer the claim to someone who is is competent to evaluate the specific clinical issues presented in the claim. “Competent to evaluate the specific clinical issues” means that the reviewer has education, training, and relevant expertise that is pertinent for evaluating the specific clinical issues that serve as the basis of the contested claim. (Health & Safety Code §1370.2) (Also see Health & Safety Code §1367.01(c))

Decisions Unhindered by Financial or Administrative Burdens

Plans and their capitated providers must be able to demonstrate to the department that medical decisions are rendered by qualified medical providers, unhindered by fiscal and administrative management. (Health & Safety Code §1367(g))

No False or Misleading Statements in Opposition of a Claim or Benefit

In GALLIMORE, Plaintiff and Appellant, v. STATE FARM FIRE CASUALTY INSURANCE COMPANY, ET AL we saw plaintiff argument using CA Penal Code 550 (b) which prohibits any person from presenting or causing to be presented any written or oral statement as part of, or in support of or opposition to, a claim for payment or other benefit pursuant to an insurance policy, knowing that the statement contains any false or misleading information concerning any material fact.

ERN/NCRA OVERTURN: Within one (1) week, Monarch Healthcare’s Medical Director and Orthopedic reviewed the appeal, reversed their decision and authorized the custom knee brace, thus ameliorating harm to the patient and providing restitution for the treatment services obtained.

Categorised in: Case Studies

This post was written by ERN Enterprises, Inc.