Pre-certifications in your health care plan seem like good ideas. After all, providers are professionals practicing in accordance with evidence-based clinical criteria, and these clinical criteria should be substantiated during or after an actual hospital stay. Non-mutual insurance companies waive some pre-certifications (also known as pre-authorizations) to streamline health care by pre-approving patients for certain procedures and treatments without having to contact the insurance company for confirmation. Unfortunately, many pre-cert waivers give way to unnecessary procedures that increase overall health care costs.
How can we do it better? Rather than relying on pre-certifications, consider independent medical management to guide responsible health decisions for employees. Instead of immediately giving a green light for services, independent medical management asks Is this medically necessary for the patient? before approving a procedure.
When we think about the value pre-certifications and independent medical management generate, we should consider whether they support our health goals for employees. In general, we want to deliver better healthcare outcomes with less risk at a lower price. We want:
- Better healthcare outcomes (quality care usually is the least expensive)
- Reduced medical risk and out-of-pocket costs for employees
- Reduced bottom line impact of benefits and your business without compromising points 1 and 2.
Most pre-certification protocols rarely align with these goals. According to a 2018 study, 73 cents of every dollar of the $3.6 trillion national tab for health care that year went to people who have nothing to do with actually providing care to patients.
Insurance companies and vertically integrated health systems use pre-certifications as a business tool to generate revenue for shareholders. Since insurance companies and health systems make money every time there is a claim, pre-certifications are one more way to increase the number of claims a single patient can generate. Without a careful system of checks and balances, pre-certifications create additional expenses for patients while protecting margins for insurance companies and health systems.
To deliver better healthcare outcomes for patients, focus on independent medical management and pre-certifications. With independent medical management, questions about care shift from “Is this available to the patient?” to “Will this create a better health outcome for the patient?” This small but powerful lever can reduce overall costs by eliminating unnecessary additional tests, treatments, and procedures. Independent medical management creates an extra step in health care, but the results are beneficial to everyone involved: better healthcare outcomes with less risk at a lower price.
Case Study: Independent Medical Management Saves $20,000 and an Extra Hospital Stay
We recently saw two patients visit the hospital for a knee replacement. They had nearly identical experiences, but one patient paid nearly $20,000 more and spent extra time in the hospital for the same care.
Knee Surgery With Pre-Certification
In the first case, a woman received a knee replacement and was transitioning from anesthesia to pain medication. At one point, her blood pressure suddenly bottomed out. The hospital notes and her primary care follow-up referred her to a heart specialist who wanted to perform a full work-up ($20,000) in tests to find more information. A pre-certification meant she was already approved, so the heart specialist conducted the tests without a consultation with the knee doctor. Afterward, he ordered multiple blood thinners to prevent possible blood clots in the future.
Clinical criteria says the medication could cause the blood to pool in the knee just fixed. If that happened, the patient could become septic. Absent pre-cert, the heart specialist got his way. The patient took the medication. Soon, however, she became septic in her injured knee. She had to return to the hospital for additional treatment, powerful antibiotics, and more cost.
Knee Surgery With Independent Medical Management
In the second case, the patient had an almost identical knee replacement. Like the first patient, her blood pressure bottomed out while she transitioned from anesthesia to pain medication. Although the heart specialist determined blood clots existed and frightened the patient to perform tests, the independent medical management team consulted with the orthopaedist (knee surgeon) and determined the tests may not lead to direct and positive health outcomes for the patient. Instead, they decided to continue monitoring her blood pressure for dips.
The patient went home with post-operative care and rehab and the blood pressure dip turned out to be an anomaly. Because she avoided the additional tests and medications, she also avoided a significant increase in medical bills related to her knee replacement.
Independent Medical Management for Better Care and Results
Waiving pre-certifications seems like good ideas because they streamline health care for employees, but they can also lead to expensive and unnecessary tests and procedures. Instead of relying on pre-certification ‘protections’ from standard contract language, consider independent medical management to help align your medical plan with positive healthcare outcomes for the patient. So while taking time to get it right may vary the speed of care, the improved health care outcomes and savings are worth the effort.