An important research and policy group has proposed changes in the language of healthcare benefit contracts that would drop terms-such as "medically necessary"-that have triggered most lawsuits against health plans.
The changes in benefit language and new criteria for coverage also would for the first time explicitly address the issues of a treatment's cost and cost-effectiveness. The new language would affect the day-to-day practice of medicine.
The changes were developed by a working group at the National Institute for Health Care Management, a not-for-profit organization founded by large Blue Cross and Blue Shield plans.
The group's proposals were presented in an article in the Feb. 28 issue of the Journal of the American Medical Association by David M. Eddy, M.D., a healthcare policy adviser.
"Traditionally, benefit language has relied on fuzzy terms," Eddy wrote. Plans have tended to cover anything that was thought to be "medically necessary" or "medically appropriate."
Because these terms are subject to broad interpretation, "when plans are taken to court it is almost always because of a dispute over these words," he wrote.
Plans also have traditionally considered whether procedures have been shown to be "safe" and have not covered procedures that are considered "investigational," he said.
"In current usage, these terms mean too many different things to too many different people and are too open to misunderstandings to be helpful. Instead, the proposed language tries to address directly the intentions behind those terms," Eddy wrote.
The new criteria "also avoid terms such as `standard and accepted,' `widely used' and `community standard.' This is because wide acceptance and use is not an accurate proxy for effectiveness, benefit or cost-effectiveness," he wrote.
According to the article, a health plan would be required to cover a procedure if the following criteria are met:
"The intervention is used for a medical condition. There is sufficient evidence to draw conclusions about the intervention's effects on health outcomes. The evidence demonstrates that the intervention can be expected to produce its intended effects on health outcomes. (Its) expected beneficial effects on health outcomes outweigh its expected harmful effects. (And it) is the most cost-effective method available to address the medical condition."
The criteria also define "medical condition," "health outcomes," "sufficient evidence," "health intervention" and "cost-effective."
In an interview, Eddy stressed that "the criteria must be taken as a package or not at all" to meet their intended goals. Those are to describe what is covered precisely, to ensure premiums are spent on effective services that are a good use of resources, and to reduce the number of "misunderstandings and disputes" between plans and enrollees.
Eddy said he's confident health plans will adopt some of the proposed changes because consumers want "high quality within limited resources."
"Sooner or later, we have to come to grips with costs," he said. "There's no way to control costs if you can't take costs into account when making medical decisions. To think that you can do so is silly and naive."