Featured Health Business Daily Story, July 24, 2012
Reprinted from THE AIS REPORT ON BLUE CROSS AND BLUE SHIELD PLANS, a hard-hitting independent monthly newsletter on new products, market share, strategies, conversions, financing, profitability and strategic alliances of BC/BS plans. (Not affiliated with the Blue Cross and Blue Shield Association or its member companies.)
Highmark Inc. is the latest Blues plan to change the way it pays for outpatient, non-emergency physical and occupational therapy and chiropractic care, informing customers on June 19 that beginning Sept. 1, 2012, providers must get prior authorization before performing services in those areas. It also has contracted with vendor Healthways to implement the new requirements. The insurer joins a number of Blues plans from Arizona to Massachusetts that have sought out ways to control costs in this area.
Highmark says it wants to clamp down on members receiving dozens upon dozens of visits with providers performing chiropractic and related services. An analysis by Healthways of initial claims data provided by Highmark indicates a high frequency of visits overall, with a handful of members receiving more than 100 visits over the course of a calendar year, says Richard Olson, director of clinical services for Healthways.
Highmark says the claims analysis put chiropractic care second only to cardiac care as the highest-paid service for members in some practices during the past two years. The insurer adds that in 2010, it paid more than $100 million for chiropractic-related services; in that same year, combined claims data for occupational and physical therapy cost Highmark an additional $100 million.
“Working with our vendor, we believe close to one-third of these claims may not represent optimal utilization,” says Virginia Calega, M.D., Highmark’s vice president of medical management and policy. She tells The AIS Report that Highmark is turning to prior-authorization programs for help.
“A look at the claims data revealed unwarranted variations in the delivery of care,” she says. Noting Highmark is not unique in seeking to address chiropractic and related care cost issues, Calega says the changes only came about after long discussions with vendors and other health plans seeking to address the same cost concerns.
Healthways, for instance, has worked on the problem with Blue Cross Blue Shield of Massachusetts, helping the insurer to institute a prior-authorization policy for chiropractic care. Healthways reported on its website that in 2008 the insurer established a threshold of 12 visits before requiring prior authorization for additional visits. The vendor said the Massachusetts Blues plan saw “substantial” savings and met return-on-investment goals, although it did not disclose specific figures. The insurer did not return a request for comment on the program.
The prior-authorization program applies to Highmark members in insured groups in Pennsylvania and West Virginia, as well as the plan’s individual and Medicare Advantage members in those areas. Groups that are self-insured may also participate, Highmark says, and no member will need to take special steps since providers will work directly with Healthways to obtain authorizations via an electronic health record information portal.
Calega stresses that each and every instance of provider care is not subject to prior authorization come Sept. 1; instead the prior-authorization requirement kicks in only after eight visits. “If additional visits are medically necessary, we simply want to ensure there is a proper and appropriate treatment plan in place,” she says. The insurer’s data points to the fact that nearly two-thirds of members have their chiropractic and physical therapy needs met and resolved within eight visits. “We are not doing the program to say we want to see ‘X’ number of visits. We know this is a large area of our spending and presents an opportunity for improvement,” Calega says.
After one year of the prior-authorization program, Highmark will review in aggregate how the process is working and possibly make further changes. The Blues plan also says it is forming a provider advisory group to ensure proper care in an efficient manner. “We have really spent a lot of time sitting down with the specialty [care] societies before making this public announcement, and they gave us good feedback,” Calega says.
Highmark is not breaking new ground in this space. For example, on Jan. 1, 2011, Blue Cross Blue Shield of Arizona stopped providing its own chiropractic network for PPO members and began using the American Specialty Health network of chiropractors. The Blues plan cited time-consuming claims processing, claims not being reviewed by chiropractic specialists and chiropractors in the PPO network receiving payment for care that wasn’t a covered service, among other factors.
“Our goal was not only to bend the cost curve but to provide a higher level of service to our members who require chiropractic care by using best-in-class resources that specialize in chiropractic management. All decisions regarding medical necessity are evidence-based and chiropractors will have the opportunity for peer-to-peer review and discussion with chiropractors,” Arizona Blues spokesperson Regena Frieden tells The AIS Report.
The Blues plan says about 7% of its members use chiropractic services as part of their overall medical care. And before making the change to an outside vendor, billed charges for chiropractic care reached $68 million annually despite the small proportion of members using such services.
“These costs were unsustainable and impacted the overall costs of health care coverage for everyone,” Frieden says.
© 2012 by Atlantic Information Services, Inc. All Rights Reserved.
The AIS E-Savings Club offers regular opportunities to buy AIS products and services at substantial savings. Click here to see the current specials — including a $100 discount on a one-year subscription to The AIS Report on Blue Cross and Blue Shield Plans.
Check out all of the benefits, sample issues & more!