The Problem: Your medical claims for
rehabilitation are being terminated over the issue of medical improvement
or denied for lack of medical necessity.
specializing in rehabilitation often find a paradox in insurance.
Treatment is available for X number of visits as long as patient
improvement can be demonstrated.
Then, even if substantial progress is made, treatment is likely to be
discontinued once the specified number of visits have been reached. If
progress is not made, many carriers deny treatment as not medically
necessary. It is one area of medicine where “Do no harm” may not be good
“Insurance companies are looking for improvement and if you can’t document
improvement, they say, “Why did you treat the patient?” A lot of times you
don’t know if the treatment is going to result in improvement or not,”
said Jim Morse, Director of Finance for The Rehabilitation Institute in
Kansas City, Missouri.
Several years ago, the rehabilitation hospital stepped up their efforts to
overturn medical necessity denials. Morse indicates that they have been
very successful in overturning denials, often getting several members of
the treatment team, including therapists, to write letters explaining not
only the short term goals but also the potential long term impact of not
pursuing the recommended rehabilitation program.
Medical necessity letters also frequently refer to standarized tests which
are conducted at the patient’s admit and discharge. The Rehabilitation
Institute also redefined job roles to more clearly designate
responsibility for inpatient and outpatient appeals among the staff
“We do have problems and we do have to fight sometimes on behalf of a
patient. We are right there doing anything we can do to get the bill
paid,” Morse said.
Unfortunately, some patient’s prognosis for improvement is not good. For
some, stopping further deterioration can be a daunting task for the
medical team. Getting the treament approved can be equally challenging.
One Patient’s Lawsuit for Coverage
One such patient recently took on her carrier over the issue of medical
improvement. Linda McGraw, a multiple sclerosis sufferer, was getting
progressively worse under rehabilitation. In the early 1990's, Ms. McGraw,
now deceased, began a course of physical therapy and home health care
which would ultimately be denied by her insurance carrier Prudential.
Prudential denied about $47,000 in claims under a general exclusion of
unnecessary services or supplies. The company's medical director who
reviewed the case stated that the claim denial was correct partly because
"physical therapy does not affect the course of MS."
Her medical providers argued that the physical therapy had helped arrest
the progression of MS. Ms. McGraw's attorney also successfully argued that
improvement was not a criteria under the plan document in question. The
plan document defined medical necessity as a service or supply which was:
(a) ordered by a doctor;
(b) recognized as safe and effective, is required for the diagnosis or
treatment of the particular sickness or injury and is employed
appropriately in a manner and setting consistent with generally accepted
U.S. medical standards, and
(c) is neither educational nor experimental or investigational in nature.
"Part of the problem with the denial is that if you looked at the plan
document's definition of medical necessity, it did not have the
requirement of significant improvement. They just had an internal office
memo referring to that. The court said it does not govern," said Glen
Mullins, the attorney who represented Ms. McGraw. Mr. Mullins practices
law in Oklahoma City, Oklahoma.
However, Mr. Mullins came to court prepared to argue the medical necessity
of the treatment. Prior to the trial, Mullins compiled about 25 peer
reviewed medical articles regarding the medical necessity of physical
therapy for multiple sclerosis patients. He also believes the physician's
deposition regarding the necessity of care was instrumental in the case.
However, Mr. Mullins said the case was unusual in that he was able to get
all the documentation he compiled admitted as evidence in the case. Often,
Mr. Mullins said, such lawsuits come down to an administrative law judge
reviewing only the records on file at the time the lawsuit is filed.
"It is impossible to prevail in a lawsuit if you don't have the evidence
on record before the final decision. Sometimes you know that the doctor
ordered X but not the reason for X. You need a detailed narrative," he
Not only was the need for treatment well documented in the medical
records, one of Ms. McGraw’s physicians took a strong stance on the bias
insurers show against rehabilitation.
In his deposition in the case, Sherman Lawton, M.D., Ms. McGraw’s
neurosurgeon, analogized the use of physical therapy in the MS setting to
treating malignancies with chemotherapy. He observed that many people
suffering from certain insurable cancers are routinely given chemotherapy,
a treatment which in some instances, makes the patient worse and often has
no effect on the progress of the disease at all. No one, he offered, would
characterize the chemotherapy as not medically necessary.
In McGraw's suit against Prudential, a number of letters regarding the
effectiveness of rehabilitation for MS were submitted. Also notable,
Prudential officials conceded that they did not attempt to contact Ms.
McGraw's physicians or review medical records to reach the decision. After
reviewing the medical literature and Prudential’s claim file, the Oklahoma
Supreme Court overturned the lower court ruling in favor of Prudential.
"Our odyssey through this record makes clear Prudential never evaluated
Ms. McGraw's individual case but rubber stamped the "nature of her
condition and denied each subsequent claim arising from her MS," the court
Rehab Often has Long Term Benefit; so do Appeals
Although many internal medical necessity appeals are unsuccessful, Mullins
encourages medical providers to consider the potential long term benefits
to filing an appeal with a detailed letter of medical necessity. Even if
the appeal is unsuccessful, submitting an appeal will ensure that, if the
case goes to trial, the court will have this additional piece of medical
information to consider. Mullins also recommends attaching a curriculum
vitae or resume to letters of medical necessity to establish the
provider's authority on the subject.
Any information reviewed by the insurance carrier during the appeals
process typically becomes part of the claim records and will likely be
reviewed by the court if a lawsuit ensues.
Cases such as McGraw v Prudential provide a number of medical citations
from medical literature which might be helpful in appealing denials of a
similar nature. The full text of this case is available at www.kscourt.org/ca10/cases
/1998/03/97-6064.htm and the appendix includes specific medical citations
used to argue the effectiveness of treatment.
Additionally, Morse states that medical facilities should not be daunted
when the carrier quotes the limitations of the policy.
“Case managers at insurance companies have a lot of flexibility. There job
is to preserve the insurance companies money but also to get the patient
through the system in a way that benefits the patient,” he said.
As a result, case managers are willing to consider more treatment upfront
if there is a good chance it will save the patient from more invasive, and
more costly, procedures down the road.
Morse says the efforts in this area at his facility have paid off. They
now question just how much money was needlessly written off before they
began aggressively pursuing appeals.
“We appeal just about everything. If we get a denial, we fight it one way
or another,” he said.
Your claims are being denied due to
lack of timely filing, preexisting conditions, lack of medical necessity,
treatment exclusions/limitations, subrogation/coordination of benefits
issues, and any one of hundreds of other reasons.
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