Mary was admitted to an acute-care inpatient psychiatric facility treatment facility diagnosed as suffering major depression. Upon admission she was a 48 year old female with a history of childhood sexual abuse, who presented a serious suicide risk.
Prior to admission the facility contacted her health insurer and verified her coverage and further verified that inpatient psychiatric benefits were payable at 100% URC, subject to a 30-day calendar year maximum. The facility obtained precertification for the admission, which the insurer subsequently withdrew.
Upon admission, Mary executed a standard assignment of benefits form, which would normally allow the facility to pursue her health benefit claim on her behalf. Mary was treated and released from the facility. Charges for her inpatient treatment exceeded $30,000, but the insurer refused to pay the claim. The first reason stated for the refusal was that the facility was not “recognized” by the insurer, despite the fact that the facility was licensed and accredited by the JCAHO. However, in the next item of correspondence the insurer stated that it was conducting a “utilization review”, some three months after the rendition of service.
The next letter received from the insurer stated that the insurer’s “physician consultant” had determined that treatment “could have been provided at a lesser level of care” and therefore “did not meet the medical necessity guidelines explained in your health benefit contract.”
There was no indication as to who the anonymous “physician consultant” was; nor was there any indication as to what the alternative “lesser level of care” was supposed to have been; nor was there any specific reference to any plan provisions upon which the denial of the claim is based, nor were the so-called “medical necessity guidelines” identified, which were relied upon to deny the claim. The denial simply stated bare conclusions and no well-reasoned rationale for the claim denial
The facility appealed the denial and the insurer upheld the denial after the appeal stating once again in the denial letter that “The patient’s symptoms and the patient’s degree of clinical stability indicated that treatment could be provided at a less intensive level of care.”
Once again, the “less intensive level of care” that treatment “could be provided at” was not identified (nor was any such alternative level proposed by the insurer at any time during Mary’s treatment). Again, no plan provisions were cited; no objective criteria were identified; and no well-reasoned rational for the decision was set forth. The final denial letter merely sets forth “bare conclusions”, which were not a rationale for denial.
Mary’s treatment had been carried out by a team of highly qualified professionals. Upon admission she was self-destructive and suicidal. Even the most cursory review of the medical records disclosed that because of her unstable emotional condition, and the suicide risk posed thereby, her inpatient admission was absolutely justified. Any attempt to have treated her at some lower level of outpatient care would have been a dangerous and irresponsible alternative to pursue and might well have resulted in her death. In fact, Mary did not immediately participate in, respond to or benefit from even the inpatient level of care rendered. It took more than a week to get her to even take medication for her depression and it took two more weeks to stabilize her to a point where she could be safely discharged. Therefore, her success at some lower and less intense level of care would have been problematic at best.
The insurer’s retroactive finding that Mary could have or should have been treated at some unspecified lower level of care was disingenuous to say the least. At no time during the course of her treatment did the insurer ever bother to propose any less intensive or more appropriate alternative setting or treatment approach. The standards set forth in its denial letters seemed to have been pulled out of thin air. There were no pertinent plan provisions referencing any of the standards relied upon by the insurer to deny the claim, or which set forth criteria to be relied upon by the plan for covering inpatient treatment for depression. In fact there was no medical literature, or other generally accepted medical authority, which supported the insurer’s conclusions. It appeared that the insurer simply recited its own internal certification guidelines to deny the claim. However, such “managed care” policies and fiduciary responsibilities under ERISA are fundamentally different. The internal, subjective, cost-containment standards, that a managed-care entity may choose to apply, prospectively, to certify the “medical necessity” of a proposed treatment are not necessarily the same as the more objective standards, to be applied by a plan fiduciary, or by the courts, when making a retrospective claims determination as to “medical necessity”. Nor is it proper to use certification guidelines, which are not a specific part of the plan, in making ultimate determinations about the “medical necessity” of inpatient care.
The case was referred to me and I requested a further final review of the claim. Thereafter, the case was resolved satisfactorily.