Medical Necessity in Private Health Plans

Appendix B. NCQA and JCAHO Utilization Management and External Appeals Standards National Committee for Quality Assurance (NCQA)

NCQA Managed Behavioral Health Utilization Management Standards

NCQA Managed Behavioral Health External Appeals Standards

UM 2. To make utilization decisions, the managed healthcare organization uses written criteria based on sound clinical evidence and specifies procedures for applying those criteria in an appropriate manner:

The criteria for determining medical necessity are clearly documented and include procedures for applying criteria based on the needs of individual patients and characteristics of the local delivery system.
The managed healthcare organization involves appropriate, actively practicing practitioners in its development or adoption of criteria and in the development and review of procedures for applying criteria.
The managed healthcare organization reviews the criteria at specified intervals and updates them as necessary.
The managed healthcare organization states in writing how practitioners can obtain the UM (utilization management) criteria and makes the criteria available to its practitioners upon request.
At least annually, the managed care organization evaluates the consistency with which the health care professionals involved in utilization review apply the criteria in decision-making.

UM 7.5 The managed behavioral healthcare organization has a procedure for providing independent, external review of final determinations, including:
Eligibility criteria stating that the MBHO offers enrollees the right to an independent, third party, binding review whenever:

The enrollee is appealing an adverse determination that is based on medical necessity, as defined by MBHO.
The MBHO has completed two levels of internal reviews, and its decision is unfavorable to the enrollee, or has elected to bypass one or both levels of internal review or has exceeded its time limit for internal reviews without good cause and without reaching a decision.
The enrollee has not withdrawn the appeal request, agreed to another dispute resolution proceeding, or submitted to an external dispute resolution proceeding required by law.

Notification to enrollees about the independent appeals program and clear and timely explanations of denials and approvals to both enrollees and their physicians.

Use of an independent review organization that meets the following criteria:

Conducts a thorough review in which it considers anew all previously determined facts, allows the introduction of new information, considers and assesses sound medical advice, and makes a decision or conclusion that is not bound by the decisions or conclusions of the internal appeal.
Has no material professional, familial, or financial conflict of interest with the MBHO.

MBHO non-interference with the proceedings of the external review.

Enrollee exemption from the cost of external review, including filing fees, and allowance of designating a representative to act on the behalf of the enrollee.

Implementation of independent review organization decision within specified timeframe. MBHO data tracking of external appeals for use in evaluating its medical necessity decision-making process.

JCAHO Utilization Management Standards

JCAHO External Appeals Standards

CC 1: Health care services provided directly or by arrangement are appropriate:

In scope to meet the health care needs of the population served.
To the health care needs, as influenced by socio-cultural characteristics, of the population served.
To the network's mission.
To the network's contractual obligations.

CC 8: When the network or an external entity conducts a utilization review of a licensed independent practitioner's or a network component's care that results in denial of payment, decisions by the licensed independent practitioner or network component regarding ongoing care or discharge are based on the care required by the member's assessed needs.

CC 8.1: When utilization review results in an adverse utilization management decision, the network provides the criteria for the decision and information regarding appeal to the licensed independent practitioner responsible for the member's care.

JCAHO provides examples of implementation. "These examples are simply ideas for your network to consider."

Example of implementation for CC 8: The network requests the review criteria used by any external entity that carries out a utilization review on the network's members. The review criteria are made available to those within the network responsible for treatment and discharge decisions. When the external utilization review organization's recommendation conflicts with the member's medical care requirements, justification for the course of action taken is documented. Information from the external entity is collected and incorporated into the network's assessment and improvement activities.

RI 2: The network provides for member involvement in care and treatment decisions.

RI 2.1: The network provides an authorization process for care and treatment that is timely, efficient, and meets member health care needs.

The network's process for authorizing care and treatment includes:

Providing members with a description of the treatment authorization process.
Having initial decisions made by an appropriately trained health care professional using evidence-based, network-approved criteria to authorize admission, care, and transition to another care setting.
Having a physician, dentist, or behavioral clinician review all initial treatment authorization denials prior to notifying the member or their representative(s) of an adverse determination.
Informing members in a timely manner, in writing, when a request to authorize treatment has been denied.
Informing members of the basis and reason(s) for the adverse determinations.
Informing members of the review criteria used to make the determination.
Providing members with information as to whether, and under what circumstances, investigational procedures are available and are covered by the network.

RI 2.2: The network provides a method for resolving disagreements between the network and the member or designated decision maker(s) regarding care or treatment authorization decisions. The network's process includes:

Informing members how to seek appeals of adverse determinations.
Defined timeframes in which the member can anticipate response to an appeal.
Appeal timeframes that are appropriate to the urgency of the member's health care needs.
An appeal review panel including health care professionals who are appropriately trained, experienced, and competent with respect to the care and treatment involved, and who were not involved in the initial determination.
Informing members about further steps available when disagreements cannot be resolved through the treatment authorization and appeal process, such as an internal grievance process, arbitration, legal proceedings, and any other external review processes.

RI 5: The network provides for the receipt and resolution of complaints and grievances from members in a timely manner.

The member has the right to voice complaints without fear of recrimination about the care received and to have complaints reviewed and, whenever possible, resolved. This right and the way it is protected are explained to the member. The network has a means of providing for the following:

Procedures for registering and managing complaints and grievances, including identifying the party receiving complaints and grievances.
Aggregating and reporting actions taken on complaints and grievances.
A timely response to the member, substantively addressing the action taken on the complaint or grievance.
Including the aggregate complaint and grievance information in performance improvement activities.
An appeal process for grievance decisions.
Member protection from any sanctions or penalties resulting solely or primarily from using the complaint or grievance process.

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