Psychiatric News August 20, 2004
Volume 39 Number 16
© 2004 American Psychiatric Association
p. 1
`Medical Necessity' Definition Could Set Harmful Precedent
Kate Mulligan
Psychiatrists sound the alarm about a new definition of medical
necessity that could result in reduced access to health care for Medicaid
beneficiaries throughout the country.
Tennessee state officials have developed a definition of the term
"medical necessity" that could weaken federal requirements
concerning access to care through its Medicaid program called TennCare.
At the urging of Gov. Phil Bredesen (D), the legislature passed a bill in
May that would result in copayments of $1 to $40 for certain services for most
beneficiaries, cap coverage at six prescription drugs a month, and require
most beneficiaries to use the cheapest prescription drugs available. It would
also limit days of hospitalization and doctor's visits annually, according to
<www.kaisernetwork.org>
(June 30).
Before implementation, those changes must be approved by the Centers for
Medicare and Medicaid Services (CMS) as a waiver.
The limitations proposed are not new, although the combination exceeds the
cost cutting measures undertaken in most states.
The real threat to access, notes the National Health Law Program (NHLP), is
the unprecedented definition of "medical necessity" contained in
the legislation. The NHLP is a public interest law firm in Washington, D.C.,
that focuses on health issues for the poor.
The new definition contains four parts, all of which must be met for the
patient to receive care.
- "Part 1—[A medical item or service] must be required in order
to diagnose or treat an enrollee's medical condition."
NHLP argues that the requirement to diagnose or treat could eliminate
preventive screening, such as pap smears and blood tests for lead, and
preventive care, such as immunizations.
The definition could also exclude services such as personal care and home
health aid services for elderly patients with Alzheimer's disease and therapy
services for children with cerebral palsy.
Pain medications, such as those used to ease the suffering of terminally
ill individuals, could be excluded because they are used to treat a symptom
rather than a medical condition.
- "Part 2—[A medical item or service] must be safe and
effective.... [T]he reasonably anticipated medical benefits of the item or
service must outweigh the reasonably anticipated medical risks based on the
enrollee's condition and scientifically supported evidence."
NHLP argues that "safe and effective" are terms of art within
the medical community that have been limited in use to the rigorous evaluative
process for new drugs and devices and that it is not clear how they would
apply to a service like a physician's visit. NHLP also said standards of
practice often have not developed from clinical trials or from determinations
of safety and efficacy.
Tennessee has not defined "scientifically supported evidence"
and thus constrains the ability of health care providers to apply new research
before a clinical study has been completed.
- "Part 3—[A medical item or service] must be the least costly
alternative course of diagnosis or treatment that is adequate for the medical
condition of the enrollee.... Where there are less costly alternative courses
of diagnosis or treatment, including less costly alternative settings that are
adequate for the medical condition of the enrollee, more costly alternative
courses of diagnosis or treatment are not medically necessary. An alternative
course of diagnosis or treatment may include observation, lifestyle or
behavioral changes, or, where appropriate, no treatment at all."
NHLP points out that when considered in combination with the previous two
parts, this part forecloses any treatment that is not the cheapest, regardless
of efficacy, and goes on to claim that the likely result is a reliance on
observation or lifestyle changes rather than testing and treatment.
"Adequate" is not a medical term and implies treatment of a
lesser standard than "most appropriate" or even "most cost
effective."
Under the new TennCare law, physicians will no longer be guaranteed
reimbursement for care they are ethically required to prescribe and will
realistically be limited to offering treatments that are reimbursable but fall
short of the prevailing standard of care.
- "Part 4—[A medical item or service] must not be experimental or
investigational.... This standard is not satisfied by a provider's subjective
clinical judgment on the safety and effectiveness of a medical item or service
or by a reasonable medical or clinical hypothesis based on an extrapolation
from use in another setting or from use in diagnosing or treating another
condition."
According to NHLP, this definition runs counter to existing definitions of
medical necessity, which recognize a variety of acceptable justifications for
treatment including scientific evidence, professional standards, and expert
opinion.
Psychiatrists React
Peter Frizzell, M.D., president of the Tennessee Psychiatric Association,
told Psychiatric News that there was concern among psychiatrists
about the proposed definition.
Karen Rhea, M.D., vice president for medical services for Centerstone, gave
Psychiatric News the following statement. Centerstone is a multisite
community mental health center in Tennessee.
"The rising role of the uninsured defines our national health care
crisis. Tennessee through TennCare has approached more closely than any other
state, except Hawaii, the goal of universal health insurance coverage. We do
understand, however, that there are budgetary constraints, which will
precipitate tradeoffs between coverage and scope of benefits.
"We are especially concerned about the patient population with
serious and persistent mental illness and their potential for recovery with
continued access to cutting edge pharmacotherapy and efficacious psychosocial
services. However, we are cautiously optimistic and have been promised the
opportunity to participate as providers in the dialogue, which will define the
working details of medical necessity."
Forensic psychiatrist and former APA president Paul Appelbaum, M.D.,
identified several problems with the proposed definition (see box).
David Fassler, M.D., a child psychiatrist in Vermont and member of APA's
Board of Trustees, told Psychiatric News, "The proposal appears
particularly problematic with respect to child and adolescent psychiatric
treatment. Under the revised definition of medical necessity, many of our
routine clinical interventions would be classified as `experimental' and
thereby excluded from coverage. In an attempt to save money, the legislation
would create barriers to access. Whatever modest savings might be achieved
likely will be more than offset by increased spending on special education,
juvenile justice, and social service programs.
"In addition, while the legislation purports to emphasize
`evidence-based medicine,' it imposes random and arbitrary limits on monthly
prescriptions and annual visits, procedures, or lab tests. The primary
emphasis clearly is on cost containment, as opposed to access to necessary and
appropriate clinical services."
What's at Stake?
Ron Pollack, executive director of Families USA, and other health care
advocates fear that approval of the definition by the CMS eventually could
result in a weakening of federal requirements nationally concerning care for
Medicaid beneficiaries.
Senate Majority Leader Bill Frist (R-Tenn.) backs the change, according to
an article in the July 7 USA Today.
Reporter Skip Cauthorn speculated in the Nashville City Paper on
July 6 that the proposal would be particularly appealing to Republicans as a
way of setting a precedent because it was developed by a Democratic governor
and supported by a Democratic state legislature.
The Bush administration, in early 2003, proposed changes to Medicaid that
would have given states greater flexibility in terms of cutting beneficiaries
and services in exchange for a short-term infusion of funds. The proposal was
withdrawn when it failed to secure support from the National Governors
Association (Psychiatric News, March 7, 2003). 
Related Article:
-
Definition Said to Fail on Many Counts
Psychiatr News 2004 39: 34.
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