Do managed healthcare interventions benefit you?

The matter is further complicated by the presence of a third party who is the service provider or hospital.

The typical scenario is that members receive service from the healthcare providers or hospitals, who in turn submit the claims to the medical scheme for payment. It would be naïve to assume that all service providers will always be entirely honest in presenting their claims and that some members would not occasionally have the desire to maximise their benefits beyond what is provided for.

Medical scheme managers are entrusted with the duty of dispensing benefits fairly and equitably amongst members. The objectives therefore in managing the member's benefits are to:
- ensure that benefits are fairly and equitably distributed amongst members;
- limit abuse from service providers and
- ensure that members are not unduly exposed to unforeseen costs that are not covered in their benefits.

Medical schemes have incorporated a variety of managed healthcare practices into their business processes either as in-house or outsourced services. The following are some examples of these interventions and how they benefit the member.

Hospital pre-authorisation

This is the process where the service provider l notifies the medical scheme of their intention to admit the patient or perform a medical procedure. The scheme has the opportunity to confirm available benefits and issue relevant disclaimers on certain procedures or surgical equipment not covered in this particular admission. The scheme also scrutinizes all diagnostic and procedure codes and fees submitted by the service providers, and approve as appropriate. It is advisable that members also call in personally in order to get first hand information from the scheme regarding the disclaimers. Often service providers and hospitals disregard disclaimers and go ahead with the admission and procedures and claim any excess from the members.

The authorisation process is largely to confirm available benefits and to ensure members don't end up with huge bills for procedures and fees that were not properly discussed and agreed upon.

The Health Professional Council of South Africa (HPCSA) has recently scrapped the ethical tariffs which are the fees that healthcare service providers could charge above the RPL (reference price list) tariffs. The Council concurrently rules that doctors charging above the RPL rates need to discuss their fees with the patients and obtain a written consent, in which case the member will be liable for the excess.

Case management

Case managers are highly trained registered nurses working for the scheme. They engage with hospital case managers and doctors during the hospital admission to ensure the appropriate level of care and length of hospital stay. Any additional request for further investigations and procedures are evaluated and approved accordingly. The scheme's case managers also have the opportunity to monitor referrals amongst specialists whilst the patient is in hospital. Some referrals may be opportunistic and inappropriate in a hospital setting and may unduly increase the member's hospital bill.
Case managers ensure members receive appropriate care and are not subjected to out- of- pocket payments from unauthorised procedures whilst in hospital.

Chronic medicines authorisation

A doctor who intends putting the patient on chronic medication needs to submit a request to the scheme. The scheme will then approve the prescription according to the diagnosis and the scheme's medicines formulary. Schemes often approve out-of-formulary prescriptions upon a written letter from the doctor motivating why his patient requires the particular medication. The purpose of the formulary is to ensure that doctors practice cost effective and scientifically based medicine.

Clinical protocols

A scheme may have a set of guidelines that govern the manner in which certain diseases ought to be treated. These clinical protocols are drawn up from national and international treatment guidelines as well as clinical studies from medical journals. The protocols ensure that there is consensus in the manner in which doctors diagnose and treat the scheme's members. It also ensures that doctors adhere to cost-effective and evidence based medical practice.

Underwriting

All new applications are subjected to an underwriting process which ensures that members who have not been on any medical scheme for the past two years have certain conditions excluded from the benefit for up to twelve months. Underwriting is a legal recommendation provided for in the Medical Schemes Act of 1998. This process is to protect the pooled benefits of existing members by ensuring that new members with existing conditions contribute to the pool at least for one year before they can claim for those conditions.

Disease management

This is a process where some schemes identify their members with serious chronic conditions, direct them toward appropriate resources and medical expertise and ensure that they remain compliant on their medications and treatment plans. A lot of the diseases so managed are life style diseases, in which great impact can be made in reducing the health risk to the members if they cooperate with the scheme and health care providers. The disease management process also coordinates the treatment plans of the various doctors that the members may be seeing.

There are a lot of third party service providers who provide a variety of managed health care interventions to medical schemes. Some of these are IT based solutions that interface with incoming claims, to reject, with reasons, any irregular claims. Managed health care cost is classified as a non-healthcare cost by the Council of Medical Schemes. Other non-healthcare costs are brokerage fees and administration fees. Because such costs are not directly for the benefit of members as in claims costs, schemes need to evaluate such services carefully before purchasing them, to ensure that they produce the intended savings and that members are not unduly denied benefits in the process.

Managed healthcare interventions, when properly implemented and audited, can reduce costs by confining the practitioner to evidence based medical practice, and hence limiting abuse of benefits.
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Dr James Arens
Clinical Operations Executive
Pro Sano Medical Scheme
25 March 2009