In addition to discussing legal issues, I am also going to try to illustrate some of the managed care behavior that we are seeing out in the field.
One particularly troubling recent development is the use of stealth denials that never generate a denial letter or indeed any formal record at all. The most common form of stealth denial is a decision that denies reimbursement for needed services but simultaneously authorizes a lower level of care or fewer units of service (for example, a facility calls to request residential addiction treatment, and the managed care company approves an intensive outpatient program). These stealth denials can be difficult to spot (and even harder for regulators to track), because the written record will indicate only that care was approved. All too often, facility personnel who are already stretched too thin simply accept the reduced care that is being offered. To force this managed care stratagem out into the sunlight, treatment facility personnel need to remain singularly patient-focused, and need to ask the managed care company to cover what the patient needs. Facility personnel also need to carefully document these requests in their records.
Providers should not, however, stop there. Under the Affordable Care Act, there is a mandatory appeal process for any “adverse benefit determination,” and the term “adverse benefit determination” is a pretty broad one. Basically, it includes any denial or refusal to authorize or pay for all the treatment that a patient or provider is requesting, and includes managed care decisions that authorize less than the amount of care requested. It includes, in other words, stealth denials. Both providers and patients have a right to challenge these stealth denials. These denials need to be appealed, and appeal efforts need to be carefully documented.