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Pilot project to test auto-authorization’
Horror stories about delays in getting authorization for emergency care have Los Angeles County officials ready to try something dramatic: authorizing everybody.
"It probably costs more money to deny an emergency room service than to just approve it," explains Ed Benjamins, RN. Benjamins is director of utilization review and case management activities for LA Care Health Plan, which serves about 587,000 enrollees — almost half the county’s managed care MediCal population — through about seven subcontractors.
A six-month pilot project under development at selected emergency departments (EDs) in the county will eliminate the need for prior authorization for emergency services while educating plan members on appropriate use of those services. The pilot is slated to begin this month at St. Francis Medical Center, which sees about 150 LA Care patients each month.
If the pilot suggests that "auto-authorization" lowers costs, the strategy will be promoted to all of the enrollees in LA Care, says LA Care Health Plan spokesman Keith Malone. The project also targets patient satisfaction and care. (See related story, above.)
In the current system, denials account for an estimated 13% of the requests for ED authorization in the LA Care network. A survey last year showed 67% of ED authorizations for "post-stabilization care" were fully approved; another 11% were partially approved. The study did not look at medical screening exams, which are mandated under California law and the federal Emergency Medical Treatment and Active Labor Act.
Details from brainstorming sessions among HMO representatives, hospital administrators, and ED staffs helped inform the "auto-authorization" strategy for unclogging EDs:
• Rarely do physicians send Medicaid HMO enrollees to EDs for care; they self-refer. A high rate of walk-in demand for emergency care — an average of 86% for LA Care and another large MediCal plan in the 1998 survey — suggested physician or emergency medical services education would not be enough to address the problem fully.
• About 80% of the authorizations were secured within 20 minutes or less. This suggested to LA Care officials they should concentrate on the remaining 20% that were consuming an extended period of time.
The heart of the experiment is implementation of a global capitated fee for hospital and physician services. Except for cases in which a patient is admitted to the hospital, all ED services for LA Care-managed MediCal enrollees will be reimbursed at a global rate still being hammered out between LA Care and its payers.
While calculating the physician component of the reimbursement rate has been relatively straightforward, developing an average hospital reimbursement rate has been a challenge. Identifying even the direct medical costs is difficult because many hospitals do not code to indicate where a particular service is provided in the facility. On top of that, researchers are trying to isolate the cost of clerical staff required for phone calls and copying records, as well as the clinical staff required to perform medical reviews.
Early attempts to identify the total facility costs for ED care produced estimates among network hospitals from $400 to an astonishing $25. "It’s not because that’s their actual costs," says Benjamins. "It’s because the data they’re using to produce that average is inconsistent and inaccurate. I’m struggling with that." The reimbursement rates will be set to maintain expenditures at existing levels.
To develop the rates, researchers are using paid claims data from MediCal fee-for-service and Los Angeles MediCal managed care provider claims. To help win provider support for the project, researchers have promised payment within 30 days of the date of service. For their part, providers are responsible for faxing encounter data to the plan at financial risk and the enrollee’s primary care physician no later than the working day after service.
The educational component of the pilot project includes the development of a scripted patient education protocol to be delivered by ED staff after services have been provided. The script is intended to help members identify their primary care physician and establish a relationship.
"We think once they’ve established that relationship, their [discretionary] utilization of the emergency department will decrease," adds Benjamins.
The logistics of an expansion would be daunting. Los Angeles County has more square miles than Delaware and Rhode Island combined. Its 9.3 million residents make it more populous than 42 states. LA Care alone has in its network 87 emergency departments in 109 hospitals.