"What To Do When a Payer Denies Your Recommended Care as "Experimental" or "Investigational""

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"What To Do When a Payer Denies Your Recommended Care as "Experimental" or "Investigational""

Take these steps when your proven treatments are unfairly denied.

Gil Weber, M.B.A.

Adapted with permission from Podiatry Management
© Copyright, 2008. All rights reserved.
June/July 2008


The list of frustrations for physicians and staff when dealing with managed care plans seems endless. The hoops everyone must jump through before, during, and after a patient visit add immensely to the cost of providing care and, significantly, to the stress of running a medical practice (to say nothing of the added stress on patients).

And when it comes to providing quality care for their Members a number of third party payors seem to talk out of both sides of their mouths, thereby complicating the provision of that care and, in some cases, slowing down or even denying payment. One classically frustrating example comes out of verbiage found in many managed care contracts. Typically you'll find words along these lines:

Relationship of the Parties: For purposes of this Agreement and Physician are and will act at all times as independent contractors. Physician shall be solely responsible to Members for providing Health Services and the quality of those services. Nothing in this Agreement is intended to create any right of to intervene in any manner with the provision of Health Services to Members. Physician has a duty to exercise independent medical judgment irrespective of whether determines a Health Service is a Covered Service, and irrespective of the Utilization Management and Quality Assurance Programs.

So the plan is saying to the physician that it won't interfere with the patient/physician relationship, and it won't intervene in the physician's provision of care. But it's also made very clear that no matter what the plan may decide, in the end the physician is still responsible for the proper care of the patient.

Claims denied as experimental or investigational: Why?

Many of you have experienced firsthand the frustration of a denied authorization for your recommended care. Or worse, you're already provided the care only to then have the claim denied with the service unilaterally designated by the payor as "experimental" or "investigational." You probably felt strongly that the payor's position was incorrect, and that it had effectively denied reimbursement for the service based on a flawed coverage determination.

And it's all the more perplexing when the service has been accepted and reimbursed for some time by Medicare, the industry's "gold standard" on what is and is not considered medically necessary, experimental, or investigational, and it's also been reimbursed by other private payors. CPT 28293 (correction, hallux valgus [bunion]) and 28890 (extracorporeal shock wave, high energy) are two examples of services for which many physicians have encountered authorization and payment problems.

When inquiring about the denial (if you're able to get an answer at all) you likely discovered the plan based its denial, at least in part, on an old position paper on practice guidelines. That position paper may even have pre-dated acceptance of the service and assignment of a CPT code by the American Medical Association. Since the position paper may have pre-dated the technology or its subsequent acceptance by the podiatric community as a standard of care for certain conditions, the payor has exploited this to deny proper and justified reimbursement.

So now you find yourself in Alice's Wonderland -- in an absurd situation where your provider agreement says the payor will not interfere with your professional judgment, and that you are responsible to the patient for providing quality care, yet they also deny the very care you recommend by deciding in their infinite wisdom that you should, instead, be providing some other type of care. What's wrong with this picture?

Many physicians feel strongly that such denials are a sham, and that they potentially could be harmful to patients. In addition, a plan's (non)reimbursement policy effectively makes hostages of podiatrists and their medical decision-making. And the standard appeals process spelled out in the payor's documentation typically proves to be little more than a rubber-stamped, perfunctory denial since the review is handled internally, with the decision made by the payor's Medical Director who, as its employee, brings a bias to the process.

Getting a fair and unbiased determination: external review

If you're going to challenge a payor over its determination of what is and is not a payable service then you have to know how to use any and all available tools. Nearly all states require that payors offer an external appeals review process. But in most of those states that process is available only to the Member (patient); it's not an available remedy for physicians.

That's problematic for the podiatrist, especially if the patient is unable or unwilling to pursue his appeals rights. For example, the patient simply may be too ill or too busy to fight the battle. But getting the matter resolved is crucial for the podiatrist since, ultimately, the result will determine if payment is forthcoming and, if it is, from whom.

Some states do make the process more physician-friendly. As an example, here's something in place in Indiana that gives physicians in that state the means to a fair and unbiased external review of a payor's adverse internal review decision.

The process is called the External Grievances Review, and it is part of Indiana Code IC 27-8-29. See here: http://law.justia.com/indiana/codes/title27/ar8/ch29.html

The Indiana External Grievances Review allows a covered individual or a covered individual's representative (e.g., a podiatry practice) to file a written request with an insurer for an external grievance review of the insurer's adverse determination of appropriateness, an adverse determination of medical necessity, or a determination that a proposed service is experimental or investigational. Under the law, reviewers in this process must be independent, so the payor's Medical Director does not make the decision.

Further, section 27-8-29-13 (c) of the Code states that: "The independent review organization chosen under subsection (b) shall assign a medical review professional who is board certified in the applicable specialty for resolution of an external grievance." Further, section 27-8-29-19 (c)(1)(B) states that the medical review professional "must be knowledgeable about a proposed service through actual clinical experience." Thus, the independent reviewer(s) must be familiar with the matters under discussion.

The insurer bears the full cost of such reviews in Indiana, and the independent, external reviewer's determination is binding upon the insurer.

What to do if you get into this sort of situation

So let's say that procedure "X" you've confidently recommended is rejected by a payor. You have to explain to your patient that his insurer would not grant an authorization (or would not pay). Indiana physicians could then appeal the payor's rejection on behalf of that patient.

But the regulations differ significantly in other states. In some an appeal is allowed for any denial, while in others the external review process applies only to denials of medical necessity or services deemed experimental. In some states the external review is binding on both parties, while in other states it is binding only on the payor.

So you'll want to ask your practice attorney for guidance. You can also do some investigation using Google. And I recommend calling upon your county or state podiatric societies for help. Getting local and/or state societies involved is important (and it provides some return for payment of your annual dues).

If the physician community has established a service as appropriate care for a certain condition, and if Medicare and/or other payors have accepted it, then in the face of evidence-based documentation attesting to its effectiveness it is preposterous that a payor would continue to deny as "experimental" or "investigational." Yet we know they do this all the time.

If you feel that an external review would be appropriate then you must make a request and put the payor on notice that you're not happy with its internal review process. I suggest including in your challenge some verbiage along these general lines. Ask your attorney to wordsmith as necessary.

"We are requesting an immediate and expedited review of this case by a board certified and specialty matched physician who can render a decision based upon the standards of care. If you do not feel that the information provided has established medical necessity, please provide us with your detailed rationale based upon the standards of care, the specialty of the physician who reviewed this case, and whether they are board certified in a matching specialty."

At the same time you'll also want to have your "ammunition" collected pending the start of the external review process.

Getting all your ducks in a row

Put together a package of materials supporting your position that the service should not be categorized as "experimental" or "investigational" (or why it should be accepted as medically necessary). At a minimum this package should contain the following:

  • a letter to the review body appealing the plan's denial of care,
  • your properly coded and documented claim for services rendered,
  • documentation from various sources including respected professional (clinical) journals and studies attesting to the efficacy and appropriateness of the service,
  • documentation of Medicare coverage and of private payors showing that the service is approved for reimbursement.

Remember that depending on a particular state's standards for external review, the reviewer may or may not be knowledgeable about podiatric care. For example, the reviewer might be a primary care physician. You'll want to do everything possible to ensure that the decision is made on more than just that physician's primary care knowledge base and personal opinion. You want the decision to be evidence-based.

Securing rights within your provider agreement

If your state's laws grant the rights to initiate an external review only to the Member then you may also want to consider asking the payer for a contractual provision granting you similar rights. It's not a far-fetched request.

The specifics of how the verbiage should be written will depend on your state's laws, so your attorney should handle this. But in a nutshell you want the payor to grant you not less than the same rights afforded its Members.

The Future??

Perhaps if enough physicians in a state make use of the appeals process available to them under applicable law or regulation then a reluctant payor may be forced to reverse its position -- in that one state and for that one service. And, if sufficient uproar is raised by disgruntled physicians and patients, it might just be enough to act as a springboard effecting similar change for that payor in the other states where it does business. There's no telling where things can lead when payors are caught in the uncomfortable spotlight of public scrutiny.

But it's clear that no payor is going to change and pay for these services unless it is forced to do so by independent external review brought about by legislative action, or as the result of so much bad press that it cannot hide from the very public it claims to serve with such concern.


These materials are intended to provide useful information about the subject matter covered. The author believes that the information is as authoritative and accurate as is reasonably possible and that the sources of information used in preparation of the materials are reliable, but no assurance or warranty of completeness or accuracy is intended or given, and all warranties of any type are disclaimed.

The materials are not intended as legal advice, nor is the author engaged in rendering legal services. The materials are not intended as a replacement for individual legal or professional advice.

Information contained herein is presented only for illustrative purposes, and it should not be used to establish any fees or fee schedules, nor is it intended and it should not be construed as encouraging any user of the materials to take any actions that would violate any state or federal antitrust laws, tax laws, or Medicare or Medicaid laws.

Gil Weber, MBA is a nationally recognized author, lecturer and practice management/managed care consultant to physicians and industry. He can be reached at (321) 433-0623 or by e-mail through his website contact page.

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