Medical Management "Signature Series" Summary

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This is the final summary article in the Medical Management "Signature Series" by Managed Care Resources, Inc. -- articles on topics in managed care written by experts in the field. The author of this article is Roberta L. Carefoote.

During the past year Managed Care Resources, Inc. staff. have delved into the issue of medical management in managed care. Four authors and ten articles have focused on some of the key components of a medical management system, offering insights, advice, and general subject information. The objectives were clear - identify the basics and simplify the subject matter for the reader. Comments to-date lead us to believe that these objectives were appropriate, appreciated, and achieved.

The authors started with an overview of medical management and quickly moved into the two facets of a good medical management system - utilization management and quality management. The next article addressed the issue of medical management accountability. From there, the authors looked at some of the specifics of a medical management system, including referral management and authorization, case management, practice guidelines, credentialing, preventive techniques, performance measurement, and information management. In the final article, the future of medical management was examined, with an emphasis on specific activities likely to have a significant impact in the near term.

This article summarizes the medical management portion of the Signature Series, noting the contents of each article and the main points highlighted by the author. It provides a road map for the reader, enabling him/her to find material of interest and to selectively target relevant articles.

• Overview

  The first Signature Series article, written by Mary Sajdak and Zachary B Gerbarg, MD, set the stage for future articles. It laid out the activities common to today's medical management programs, and postulated five reasons to develop a program - responding to market demands, responding to financial pressures, facilitating provider and patient satisfaction, and producing valuable data. Realizing that a medical management program has a number of components, the authors highlighted key elements, including risk reduction, resource utilization, quality improvement, and an expanded knowledge base. They identified the resources required to develop and maintain a medical management program and noted that many of these resources probably already exist within an organization. The article ended with a suggestion that a strong medical management component is one of the cornerstones of any organization successfully delivering managed care.

• Utilization Management

  Acknowledging that programs to manage health care utilization have existed for more than twenty years, the authors, Mary Sajdak and Zachary B Gerbarg, MD, tracked the evolution of utilization management (UM) in managed care. They noted that almost every provider or payer-sponsored UM program includes a pre-admission and concurrent review process. Both these processes have undergone significant changes as a result of lawsuits, regulations, and accreditation standards. However, their impact on utilization is still unclear. For those managed care organizations (MCOs) continuing to employ these two techniques, the authors recommended six specific activities to ensure that maximum benefits are achieved. They summarized the article by stating that successful pre-certification and concurrent review processes require careful planning, an understanding of the relationships with the provider community, and reasonable program goals.

• Quality Management

  Starting with the definitions of quality management, the author, Roberta L. Carefoote, suggested that almost all managed care organizations employ quality assurance, most have adopted the notion of quality improvement but few have fully incorporated the principles of quality management. It is recognized that there are many forces driving MCOs to pay particular attention to the quality of their care and services. Such forces include State Insurance Departments, the United States Department of Health and Human Services, and accrediting organizations such as the National Committee for Quality Assurance (NCQA). Marketplace forces including standardized performance indicators and employer and business mandates are also making their mark in evolving quality in managed care. Finally, the author put forth ten characteristics of a successful quality management program and reported that consumers clearly benefit from the emphasis that MCOs are currently placing on quality care and service.

• Medical Management Oversight

  Accountability is the central theme of this article, where the author, Roberta L. Carefoote, identified four prominent categories designed to oversee the quality and utilization activities of an MCO. First is the managed care industry itself, where provider contracts and voluntary accreditation are employed to assure the attainment of specific standards. Second is the use of regulation via federal and state statutes and rules to ensure that specific requirements are met. Third, is the legal system where action is brought against MCOs and where successful jury verdicts have MCOs changing their behavior. Finally, there are marketplace demands such as standardized performance measures that force MCOs to examine their own performance relative to others. What started as a self-policing activity by MCOs, has now turned into a barrage by a variety of stakeholders looking to heighten accountability and tighten the rules under which MCOs operate.

• Referral Management and Authorization

  Recognizing that referral management is one of the more "onerous" processes in managed care -especially for physicians and members - the author, Esther Morales, took the reader through the stages of a referral. Key questions were addressed, including a)When is a referral required? b) What are referral guidelines and what are the issues with using such guidelines? c) Who should get the referral? d) What is involved with authorizing service levels and duration? and, e) How does one make the referral process efficient for the member? The author noted that the current micro management of the referral process suggests its inefficiency, and that a key challenge in medical management will be to simplify the existing referral management process.

• Case Management

  In this article, the author, Mary Sajdak, started with a definition of case management and spoke to how the case management process is currently used in a variety of health care sectors. Despite the variance, there are basic similarities across all sectors - case management influences patient utilization, focuses on the organizations and its resources, uses the expertise of many professionals, and reflects the needs of the target population. In managed care case management is attractive because it can align the interests of the payer, the client, and the physician. It has the ability to respond uniquely to each individual, enable service planning that is consistent with the benefit plan, and it can contain costs. While most MCOs have traditionally focused their case management efforts on the three to five percent of the population that consumes an inordinate amount of resources, case management is now being employed to address conditions that are more prevalent in the population. The author highlighted the key attributes of a well-run case management program, and suggested that case management is an excellent opportunity for MCOs to capitalize on the collective expertise and resources of the organization.

• Practice Guidelines

  In this article, the author, Roberta L. Carefoote, started by recognizing the general problem of accepting practice guidelines, and noted that there is still resistance to their use in day-to-day practice. Nevertheless, the use of practice guidelines is widespread in the managed care industry. The author wenton to provide an overview of practice guidelines - how they differ from other practice tools, their use in practice, the legal implications to consider in their use, the development process, the importance of physician involvement, and where to go to get existing or "seed" guidelines. Worthy of note is that practice guidelines are now being woven in to the very fabric of primary care - national preventive guidelines are heralded across MCOs. The issue today is not whether practice guidelines are inherently good or evil, or whether they should be implemented or not, but whether they are being used appropriately to improve the health status of the member population.

• Credentialing

  Focusing primarily on the credentialing of physicians within managed care, this article identified the requirements set forth by NCQA, and laid out a process for credentialing a practitioner. The article also addressed the issue of delegating all or some of the credentialing process to outside organizations. The author, Roberta L. Carefoote, implied that credentialing is a necessary and critical first step in securing qualified practitioners to render and manage care of MCO members. Failure to adopt and use effective policies damages the reputation of managed care and undermines the principles upon which the industry was founded. Further, failing to devote sufficient attention and resources to credentialing means running the risk of providing substandard care to members who put their faith and dollars in MCOs that promise to provide quality care.

• Preventive Medical Management Techniques

  This article paid particular attention to the preventive medical management techniques commonly employed by managed care organizations - health risk assessment, health education, nurse triage, and disease management. While these techniques have been in existence for many years, there appears to be a resurgence of their importance as MCOs struggle to differentiate themselves in the marketplace, and employers become more aware of their value and ask for them when selecting health plans. Each technique was discussed briefly in this article. The author, Roberta L. Carefoote, noted that preventive medical management techniques frequently differentiate one MCO from another, and help employers and consumers select a health plan suited to their particular needs. Preventive medical management goes a long way toward emphasizing the long-term value and quality of care associated with MCOs. It rightly focuses on the positive aspects of managed care and minimizes the perception that MCOs are more interested in the bottom line than member outcomes.

• Performance Measurement

  This article broadly addressed the issue of performance measurement in managed care. It provided an overview of the value and use of performance measures, and highlighted the critical attributes and future needs of successful measures. It also identified leading organizations in the field of performance measurement, and provided more detail about one set of performance measures extensively used in managed care - the Health Employer and Information Data Set. The author, Roberta L. Carefoote, revealed that performance measurement in managed care is a large, complex, costly and time consuming activity that can significantly impact an MCO's ability to secure contracts, focus on priorities, and increase its membership. When an MCO measures and reports its performance, it can more objectively allocate resources, target needed health services, identify improvement opportunities, and provide valuable information to purchasers and consumers. Without performance measurement, an MCO is likely to find itself losing business to those MCOs who do measure and report on their performance.

• Information Management

  Highlighting an information framework developed by the National Committee for Quality Assurance, the author of this article, Roberta L. Carefoote, posited some key data elements for a medical management information system (IS), and a process for selecting the right information system. The article also identified some of the potential impediments to securing an effective system and provided the reader with some resource sources. The author noted that information systems and technology in managed care is a complex business, but one that administrators must understand, control and own if they are to be successful in the next millenium. Today, the business and information technology strategies must be closely aligned if business outcomes are to be achieved. It is fundamentally important that IS core competencies facilitate rather than erode the MCO's strategic positioning in the marketplace. For this reason, time invested in designing and selecting the "right" information system is time well spent. Nowhere is this more true than in the area of medical management, where service costs and provision, and service outcomes are closely monitored by payers, regulators and accrediting bodies. The right system can catapult an MCO to the head of the pack, whereas the wrong system can effectively strangle any forward movement.

For more information on Managed Care Contracting please contact us at (708) 482-0123 or by email at info@mcres.com .

I hope you have found the "Signature Series" on Medical Management thought-provoking as well as practical. In addition, we have also published a Signature Series on "Managed Care Contracting". We hope that the two series combined will lessen the mystery of managed care and help level the playing field between providers and payers.

Ira H. Rosenberg

President, Managed Care Resources, Inc.

The Managed Care Resources, Inc. team has over 150 years of combined experience in the development and implementation of managed care services. Please visit our home page to learn more about how we can assist you with your managed care needs. We also invite you to contact us with questions or comments.

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