APA Fights to Have Insurer Reverse Reimbursement Policy
APA is protesting rules proposed by a Medicare fiscal intermediary—Mutual of Omaha—governing reimbursement for inpatient psychiatric services.
The proposal, known as a local coverage decision (LCD), is intended to implement regulations set by the federal Centers for Medicare and Medicaid Services (CMS). Mutual of Omaha serves as a fiscal intermediary for the Medicare program in 49 states.
But APA, through its Office of Healthcare Systems and Financing, the National Association of Psychiatric Health Systems (NAPHS), and the American Hospital Association (AHA) have said that Mutual's LCD is far too restrictive, imposing requirements for an extraordinary amount of documentation far in excess of what the federal guidelines envision.
The groups also say the LCD was issued without sufficient notification to physicians who would be affected by it and without sufficient time for public comment.
In response to the protests, Mutual of Omaha has extended the deadline for comments to the middle of this month. The original deadline had been in June, according to APA's Department of Government Relations.
An action alert sent to the APA Board of Trustees, Assembly Executive Committee, and other components urged psychiatrists to send their comments on the LCD to Mutual of Omaha (see end of story for Web information).
According to the action alert, the following points should be emphasized:
Local coverage decisions are supposed to clarify regulations. This LCD restricts Medicare benefits and imposes arbitrary and vague criteria that have little to do with medical necessity. The draft LCD will lead to blanket rejections of claims for legitimate psychiatric services. | |||||
This LCD improperly sets standards of care for inpatient services that should be issued by regulation. | |||||
As drafted, this LCD will have a profound impact on access to medically necessary psychiatric inpatient services. | |||||
No Time to Respond
As troubling as the substance of the LCD appears to be, APA and other groups are equally unhappy with the process by which it was formulated. CMS, in its own manuals, specifically states that fiscal intermediaries must seek input from specialty societies representing the parties affected by proposed LCDs.
“We're seeing a disturbing pattern here with the LCDs issued by fiscal intermediaries,” said Nicholas Meyers, director of government relations at APA. “They have simply posted the rules on their Web sites and made absolutely no effort to reach out to affected stakeholders. This creates a significant barrier to the comment process. We believe the `stealth' notice violates the intent of public notice and comment requirements for such rules, and it's certainly out of line with recent action by Congress to prod Medicare contractors to work cooperatively with physicians. There's no justification for it.”
Meyers praised the response from APA members. “Our individual members responded magnificently under a very tight deadline. Their efforts really helped. As a result, to its credit, Mutual extended the comment period, which will allow APA, our allies, and our members to offer detailed comments on the rule.”
Intermediaries Do Utilization Management
Mutual is not the first Medicare fiscal intermediary to write local coverage decisions for inpatient psychiatric services. Administar, a fiscal intermediary in Illinois, and Associated Hospital Service, in Massachusetts, also drafted LCDs that were proscriptive and issued with no direct notification of physicians who would be affected by them.
In both cases, protests by APA and other groups were successful in getting the comment period extended and persuading the fiscal intermediaries to reconsider much of the content. And the LCD drafted by Mutual of Omaha appears to be all but identical to those drafted by the other fiscal intermediaries.
Psychiatrist Anil Godbole, M.D., told Psychiatric News that the problem reflects the expanded role of fiscal intermediaries in the Medicare program. Originally serving primarily to process claims, fiscal intermediaries have now taken on the task of utilization management and review, he said.
In the same manner as managed care companies in the private sector, the rules written by the fiscal intermediaries to implement federal guidelines for reimbursement of services are so proscriptive as to intrude on the actual practice of medicine and provision of care, Godbole said.
As a member of the advisory panel to Administar, Godbole was alerted in October last year to a local medical review policy—a draft that is preliminary to a local coverage decision—written by the company.
What Godbole saw was alarming. “I called a number of hospitals and pointed out that it is very proscriptive,” he told Psychiatric News. “But nobody had heard anything about it.”
He said the amount of documentation required and the detailed micromanagement of all manner of routine inpatient psychiatric practices—including, for instance, how physicians' orders were to be written— was extraordinary. “It was pretty much telling physicians how to practice,” he said.
Godbole is chair of the department of psychiatry at Advocate Illinois Masonic and Bethany Hospitals, Chicago.
A letter from APA, NAPHS, and AHA to Administar in January outlined objections to the draft. “We believe that the draft.. .restricts benefits that are otherwise available under the Social Security Act, imposes arbitrary and in some instances vague criteria that have little to do with the medical necessity of a proposed treatment, and would be unworkable,” the letter stated. “Many of the proposed policies are inconsistent with the Social Security Act, [are] not supported by clinical or other data, and would undermine the act's coverage of those in need of inpatient psychiatric treatment.”
Godbole said he believes that since hospital psychiatrists are now becoming aware of the issue around local coverage decisions formulated by fiscal intermediaries, the tide is turning toward greater cooperation with physicians and more appropriate policies.
He added that psychiatrists' concerns about the issue have been communicated to CMS, which has been receptive. And both Administar and Associated Hospital Service have agreed to honor a moratorium on enforcing their policies until comments have been received and to work with physicians to arrive at more acceptable policies.
Meyers indicated that APA would press its concern with the LCD with Mutual directly, with the appropriate CMS regional offices, and with the CMS and the Department of Health and Human Services in Washington, D.C. “Hopefully, we can present a strong case to CMS about why this rule should be withdrawn,” he said.
The Mutual of Omaha LCD is posted online, with a link to a page for writing comments, at<www.mutualmedicare.com/lmrp/draft.html>.▪
