COMMENTS 1310 G Street, N.W. Washington, D.C. 20005 202.626.4780 Fax 202.626.4833 Before the INSTITUTE OF MEDICINE COMMITTEE ON THE DETERMINATION OF ESSENTIAL HEALTH BENEFITS On How Insurers Make Determinations of Benefit Design, Necessity and Coverage Submitted by: Virginia Calega, MD, MBA Vice President of Medical Management and Policy Highmark Blue Cross and Blue Shield January 13, 2011
Introduction My name is Virginia Calega and I am the Vice President of Medical Management and Policy at Highmark Blue Cross and Blue Shield of Pennsylvania. I would like to thank you for the opportunity to be part of this panel today to discuss how insurers develop benefits and determine medical necessity for covered benefits. I am here today representing the Blue Cross and Blue Shield Association (BCBSA). BCBSA is a national federation of 39 independent, community-based Blue Cross and Blue Shield companies that collectively provide health care coverage for more than 98 million individuals one in three Americans. Highmark is a nonprofit, independent licensee of BCBSA with 4.7 million members in Western and Central Pennsylvania and West Virginia. We offer HMO, PPO, HDHP, Medicare Advantage and individual products to our members. At Highmark, I have the responsibility for managing our medical policies for our commercial products. I also oversee medical management activities for our commercial, CHIP and Medicare Advantage lines of business, behavioral health, and pharmacy. This role allows me to positively impact a larger population of patients than when I was in private practice as an internist and geriatrician. The work of this committee is critical to the implementation of the Patient Protection and Affordable Care Act ( ACA ). Any definition of an essential health benefit must balance the need to provide reasonable, appropriate, high quality coverage with the need to assure affordability and access to care for consumers. The definition of essential heath benefits will primarily impact individual consumers, small businesses and the self employed, who will be the main customers for the state-based Exchanges beginning in 2014; therefore, it is important that the initial scope of the essential health benefits package reflect the typical employer plan of small businesses. Research indicates that buyers in the individual and small group markets are especially sensitive to price as individuals in such plans bear much of the premium cost. A definition that is overly inclusive and does not require a sound evidence base for essential health benefits could negatively impact affordability for consumers. 2
In my remarks today, I will describe the industry practice for developing benefit designs and products. I will also explain Highmark s practice for determining medical necessity and benefit coverage (which is driven by evidence-based research, national standards and collaboration with the provider community). Based on our experience, Highmark and BCBSA recommend that: o Any definition of essential health benefits must preserve an insurers ability to utilize medical management tools, including medical necessity tools. These tools are critical to ensuring individuals receive safe, effective, and appropriate services, while maximizing affordability for consumers; and o The process through which essential health benefits are identified and updated be based upon evidence-based research and market-based input. Industry Practice for Benefit Designs and Product Development At Highmark, benefit design is a critical element of the product development process that involves the participation of several areas of the company and relies on information from various external data sources. Benefit designs both influence and are influenced by premiums in the process of creating products that offer meaningful coverage at an affordable price. Where the cost of an added benefit requires an increase in premium that may impact an individual s access to coverage, issuers must have the flexibility to adjust the benefit structure to ensure that individuals have access to necessary care at an affordable cost. For example, adjustments in cost-sharing (such as copayments or co-insurance) may be required as a result of adding a benefit in order to offer the coverage at an affordable cost. The benefit design and overall product development process includes input from various internal business areas and the analysis of internal and external data. o Customer. We collect market research from several sources to ensure that our coverage and premiums match market demand throughout different market segments. For example, information gathered from consumer focus groups as well as customer satisfaction surveys provide direct input from members and potential customers on market demand for different benefit designs and specific 3
benefits. Insurance brokers and sales representatives also provide critical information on market demand. o Internal Performance Reviews. Senior leadership conducts ongoing review and analysis of product portfolio performance, which includes analysis of sales data and medical trends by geographic area, product type and benefit type. This data is a direct indicator of existing consumer preferences and is essential to predicting future trends to ensure that products meet the needs of customers. o Changes in Medical Treatment. Medical Management staff, comprised of board certified physicians, registered nurses and other health professionals, continually review medical literature and collaborate with providers on an ongoing basis to identify any new treatments or changes in medical protocols that may necessitate a change in benefits. o Product Portfolio Analysis. The entire product portfolio is continually reviewed to ensure that consumers are provided with a broad choice of products at different premium levels. As I ve outlined, product development is an iterative process that requires continual collection and analysis of a variety of data to ensure that meaningful coverage at a variety of price points can be offered across different markets. Industry Practice for Determinations of Necessity and Benefit Coverage The primary goal of using medical necessity to determine coverage of benefits for a patient is to ensure that members receive the most appropriate care at the right time and in the right setting. Published research from the Dartmouth Atlas and other sources reveal that where evidence-based protocols are not utilized to support the decision making process, variations in the delivery of care across the country result. Procedures that are potentially more intensive or harmful are may be performed rather than alternatives procedures which provide the same or similar beneficial results with less risk. To ensure that consumers receive the most appropriate, safe and effective care, Highmark and other insurers utilize evidence-based medical necessity protocols. 4
In general, health care services, tests, procedures or medical supplies are deemed to be medically necessary, and therefore covered, if a provider, exercising prudent clinical judgment, would provide such services to a patient and such services are: o in accordance with generally accepted standards of medical practice; o clinically appropriate, in terms of type, frequency, extent, site and duration, and considered effective for the patient's illness, injury or disease; and o not primarily for the convenience of the patient or the provider and not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient's illness, injury or disease. For these purposes, "generally accepted standards of medical practice" means standards that are based on credible scientific evidence published in peer-reviewed medical literature generally recognized by the relevant medical community, Specialty Society recommendations, and the views of providers practicing in relevant clinical areas and any other relevant factors. Advanced imaging services are a good example to highlight the benefits to consumers of medical necessity determinations. Many studies have documented the increased utilization of imaging services, with U.S. national expenditures on all medical imaging now exceeding $100 billion annually. There are a variety of factors that have contributed to this growth over the past 10 years, including increasingly sophisticated equipment, new clinical applications, consumer demand and variations in the prescribing and delivery of advanced imaging by providers. Highmark s analysis of its data related to the use of advanced imaging services identified 25-35% annual increases in utilization of such services, with many members receiving repeat and potentially unnecessary tests. Concerns regarding the quality of the images being produced led Highmark to implement a privileging program in 2005 prior to implementing our prior authorization program in 2006. Providers were required to meet specific quality requirements and safety standards in addition to being accredited and licensed to perform services that they were delivering. National accreditation requirements, as established by professional organizations such as the American College of Radiology (ACR) and the American College of Cardiology (ACC), 5
were utilized. The goal was to reduce the number of duplicate tests due to poor imaging quality and equipment and to implement safety programs to ensure that the lowest necessary radiation doses for members were followed. Our experience has shown that 42% of the advanced imaging studies requested are combination requests meaning that more than one body region is being imaged in a single session. Many of these combination requests are not medically necessary and result in a clinical disapproval saving members from unnecessary radiation exposure. In addition, an alternate course of treatment such as an ultrasound or MRI may be more appropriate to obtain the answer being sought without the potential risk of increased radiation to the member. In these cases, we work to educate our members and providers that alternative and equally beneficial treatment options are available. Medical necessity is further defined for all of our benefits by over 400 medical policies. Highmark medical policies are also based on substantial professional input, including: o A panel of approximately 280 actively practicing health care professionals; o Current medical literature, including the published and peer-reviewed results of clinical studies; o FDA or other regulatory approval where applicable; o State and national professional organizations (such as the American College of Cardiology or the Pennsylvania Medical Society); and o Evidence-based healthcare technology assessments from organizations such as BCBSA s Technology Evaluation Center (TEC) and the Agency for Healthcare Research and Quality (AHRQ). Collectively, this information allows Highmark to develop medical policies for determinations of medical necessity and coverage. InterQual clinical decision support products from McKesson are used in conjunction with these medical policies. McKesson is an independent company that develops national clinical decision support products which are used by many private insurers, CMS and military health systems. Such evidence-based criteria sets are critical to identifying safe, effective, and appropriate services in order to guide patients and providers through a continuum of 6
care. The goal is to protect our members and assist providers in decision making to further the goal of providing the appropriate treatment at the right time and in the right setting at each stage of an illness or condition. The definition of essential health benefits must preserve insurers ability to use medical necessity and other medical management tools. BCBSA and Highmark respectfully recommend that the IOM and the Secretary of the Department of Health and Human Services (HHS) do not limit the use of medical necessity or other commonly used medical management tools as part of the administration of essential health benefits. Employers, insurers and the Federal Employees Health Benefits Program (FEHBP) all use these tools to help keep coverage affordable while also ensuring the consumers receive the right care at the right place and at the right time. It also should be noted that the Medicare program follows an evidence-based approach for coverage determinations and also has policies to guide administration of hundreds of categories of Medicare covered services. Congress did not call for a definition of medical necessity in the ACA. Congress explicitly preserved the right of group health plans and health insurance issuers to employ commonly used management techniques like medical necessity. (See, ACA 1563(d)). Moreover, inclusion of such a definition is unnecessary given that extensive medical and legal negotiations on this subject have resulted in a standard definition of medical necessity agreed upon by national physician organizations and major health insurers. Today, this definition of medical necessity is incorporated into all comprehensive health insurance contracts that are reviewed and approved by state insurance commissioners. Similarly, the U.S. Office of Personnel Management (OPM) reviews and approves the medical necessity provisions used by FEHBP. Thus, medical necessity is currently generally subject to a standard definition and is subject to oversight from state regulators and employers. For these reasons, BCBSA and Highmark believe that there is no need or legal authority for IOM or HHS to develop a standard definition for medical necessity. 7
In addition to the comments already made describing medical necessity, examples of other medical management tools that should continue to be permissible in the administration of essential health benefits include: o Coverage of benefits through only licensed providers and facilities to ensure that consumers receive benefits from professionals that perform services within the scope of their license or certification. o Use of provider networks and cost sharing to direct consumers to those providers that deliver the best value and highest quality medical services to Highmark members. o Precertification and prior approval for inpatient hospital admissions except in cases of a medical emergency and certain outpatient surgical services such as bariatric surgery. This allows for an evaluation of appropriateness and medical necessity. o General exclusions for services not medically necessary or appropriate under accepted standards of medical practice such as benefits for cosmetic purposes or custodial care. Such management tools are essential to further the goal of affordability and should not be considered as part of the definition of essential health benefits. It is also important to recognize that members and providers have appeals rights, which frequently include an independent assessment. This appeals process provides an important check and balance to the medical necessity review process which effectively protects the consumer by furthering the goal of providing appropriate care at the right time and in the right setting. The process for determining and updating essential health benefits should be grounded in evidence-based research and market-based input. We respectfully recommend the following key principles to drive the criteria and process to define and update the definition of essential health benefits: 8
o To provide access to consumers to appropriate care at the right time and in the right setting, the processes, principles, or criteria used to define essential health benefits must be rigorously evidence based, free from political influence, and involve considerations of cost-effectiveness, quality and appropriateness. o The definition of essential health benefits should focus on the set of categories of services specifically established in the ACA. A definition that is too specific regarding covered services creates the risk of undermining affordability and the flexibility necessary to accommodate advancements in medical science. o The process of identifying essential health benefits also requires a determination of what is not an essential health benefit. The independent analyses of what is an essential benefit should consider medical efficacy and social and financial impacts. The creation of a consistent decision-making process that includes independent analysis and explicit guidelines to apply when making these determinations will best service all interested parties. o The process should consider the findings of comparative effectiveness research, including the work of the Patient-Centered Outcomes Research Institute (PCORI) established under the ACA. o The process should involve a periodic survey of the marketplace, which furthers the intent of the ACA requirement that the Department of Labor survey employer plans, to ensure that the scope of essential health benefits is equal to the scope of benefits provided under a typical employer plan. We recommend that this survey initially focus on the scope of benefits offered by smaller companies to more accurately represent the needs of the Exchange-based market. o Essential health benefits should be evaluated on a de novo basis that includes a review of authoritative scientific evidence rather than the frequency or design of state benefit mandates. State benefit mandates may be the result of political pressure from special interest groups, and the adoption process for such mandates may lack the rigorous level of evaluation of efficacy or evidence-based support from medical experts that should be required in determining essential health benefits 9
o The process should establish minimum thresholds which allow for innovation in benefit designs. Meaningful differentiations will provide consumer choice across Bronze, Silver, Gold plans on Exchanges. Examples of market-based innovation that should be encouraged include: value-based plan designs with differential cost sharing; and use of provider network models allowing insurers to incent the use of high quality and efficient providers (e.g., centers of excellence). Conclusion The decisions this IOM Committee and HHS ultimately make regarding the definition of the essential health benefits package will play a critical role in determining whether the ACA is successful in encouraging the creation of affordable health insurance products that are responsive to consumer demands in local markets nationwide. As leaders in the health care community for over 80 years, BCBSA and member Blue Plans such as Highmark look forward to assisting the IOM in developing specific recommendations for defining the essential health benefits package. Thank you for the opportunity to present our views. 10