Why Internal Medical Peer Review Is Inefficient

As we talk to potential prospects and customers, we sometimes come across health plans, medical management firms, and TPAs who seek to build and maintain their own panel of physicians to do internal medical peer reviews. Formerly this may have been a good practice for them. But now they need to question whether it’s the best practice. We live in the age of outsourcing. In the past, many health care organizations sought to organize and deploy all of their resources for all aspects of their business under one roof. Today they are more likely to shed non-strategic, non-core parts of their business, outsourcing them to specialty providers. We believe that independent review organizations are best situated to provide medical peer reviews to healthcare organizations.

So if you’re a managed care organization, a TPA or a health plan, why would you consider outsourcing to an IRO? Particularly if you’ve already built a panel of physicians and allied health care professionals to do claims reviews for you?

First, there’s a high cost of building and maintaining a panel of specialists who are all credentialed, licensed, in active practice and board certified. The function of building and maintaining such a panel can be very costly to an organization that doesn’t have enough cases to amortize those expenses over. A managed care organization or health plan is in the business of generating quality outcomes, insuring patients and members and providing them with benefits. Maintaining a large staff of physician specialists isn’t part of their core competency. If you could outsource the same medical decision-making for a fraction of the cost of doing internally why wouldn’t you outsource?

Other elements include the changing standards of care, the new experimental and investigational treatments and how they’re impacting medical decision making. It’s very difficult for a static panel of physician specialists to maintain expertise about the latest levels of quality of care in all areas of medicine. Medicine is accelerating at light speed with lots and lots of changes in the standard of care, medical treatments and the use of technology. An independent review organization is constantly recruiting and credentialing specialists who have cutting edge knowledge, skill and the ability to apply that experience in reviewing cases. An organization that doesn’t conduct a large number of reviews cannot afford the cost of continuously recruiting and credentialing specialists, and therefore it can lag behind in its ability to make effective decisions.

An independent review organization also develops a trusted advisor relationship with the managed care organization (MCO), the health plan or the TPA. Over time, the client to garners allows many side benefits from this relationship--in addition to access to an expert panel, getting free advice on what to do in particular patient situations and getting advanced statistical analysis / reporting from the IRO related to determinations, patient outcomes by population and other tracking systems. As the IRO develops client relationships, it can provide lots of consultation on other issues, such as how to improve plan language in order to make the decision-making process easier, and other similar favors that help clients improve their business. For this reason, many MCOs, medical management firms, health plans and TPAs turn to independent review organizations even though they’ve already have their own specialty panels. The cost of maintaining internal peer review panels versus outsourcing medical peer review to an IRO is just too high.

What is your organization doing to improve its competitiveness and reduce its cost of care while improving the quality of its medical decision making? Are you using an IRO yet?

Benefits From Using AllMed For Hospital Peer Review Services

Hospitals that have come to us for the first time for medical peer review services often have cases that have been either in litigation or subject to potential litigation for months if not years. We have been able to quickly help litigation teams and hospital quality managers gain clarity about these situations so they can more easily decide what their next course of action should be. In cases of litigation, if a hospital knows that their physician provider was at fault in a particular situation that leads to a bad outcome or a sentinel event, it makes more sense to settle those cases quickly, rather than incur more legal expenses by continuing to defend themselves.

When hospitals first experience successful case resolution through an outsourced peer review, they begin to believe that outsourcing to an independent review organization can have lasting benefits and should be done on a more systematic basis. Applying “best practices” and “quality management” to the process means that an organization is trying to reduce negative patient outcomes and sentinel events and, as a result, it will send a certain percentage its peer review committee cases out to an independent review organization to be looked at. Oftentimes, our clients send us cases in groups where we’re asked not to look just at “bad outcomes”.

The “bad outcome” cases might be interspersed in a larger sampling of cases where nothing went wrong at all, assuring that our peer specialists are getting a representative sampling of cases allowing for a high degree of objectivity in the review. So many hospitals have gone from an initial experience outsourcing a sensitive case to an IRO to using an IRO as a part of an ongoing quality management process. A systematic, proactive approach to sending out sensitive cases has been done for oncology groups, radiology groups and other specialty groups inside hospitals. We also review samplings for other specialty areas including general surgery, orthopedics and neurosurgery-- all with great results. Today outsourced peer review for hospitals and medical groups is rapidly being adopted as a “best practice.”

Eliminating Conflicts of Interest in Medical Peer Review cases

It’s a well known fact that medical peer review inside hospital and medical groups is at best complicated and at worst highly conflictive in terms of its outcomes. Medical peer review is inherently a broken process that can lead to conflicts of interest in many cases. As a result, medical peer review frequently does not get done or gets swept under the rug in hospital environments.

Why is this conflict of interest so great? Most hospitals don’t have much depth of knowledge in each specific specialty area, and often, the physicians on a peer review panel who are in the best position to evaluate their colleagues are conflicted by either friendship or competitive forces to make a determination that is not completely based upon the medical fact involved in the case. As a result, conflict of interest is one of the most difficult aspects to overcome when rendering effective peer reviews in a hospital environment. Most risk and quality managers in the hospital environment understand this fact, and an increasing number of them are turning to an independent review organization to provide hospital peer reviews on an outsourced basis.

Outsourcing to a third party IRO immediate eliminates any the conflict of interest and it speeds up case resolution. Why? First of all, the independent review organization can deploy a panel of specialists of all specialty and sub-specialty areas as well as allied group of board certified active practice licensed physicians. The independent review organization can quickly match a specific peer review case with a specialty or subspecialty from its own panel and assure that the specialist that is reviewing the case materials is not engaged in any conflict of interest situation. Oftentimes panels are made up of specialists from across the country so it’s very easy for an IRO to select a specialist from a different state where this is no possibility that there’s a conflict. Secondly, all the cases are done completely anonymously and as a result of this, a peer specialist on an IRO panel is able to maintain anonymity and therefore provide a high level of objectivity in their case review.

Hospitals that are looking to improve the quality of care improve patient’s safety and deal with sentinel events and negative outcomes on a more expeditious and efficient basis are using IROs to provide outsourced hospital peer review. We have dozens of clients, including hospitals from the largest medical groups in the United States, which are now adopting this as a best practice. Most of the hospitals that we initially dealt with for the first time were in very sensitive situations where they were already in litigation over a specific issue of a bad outcome related to a physician misdiagnosis or mistreatment.

Medical Case Management Best Practices

It’s no secret that today that health plans and managed care organizations are putting tremendous amounts of money into proactively managing the small percentage of their subscriber populations who consume the majority of their health care resources. Case management utilization review, medical management and disease management are some of the generic terms that are used to describe this process. Independent review organizations act as a key support element in the health care decision making process. They help case managers, utilization review and utilization management nurses improve the health care delivery process so that critical care populations are getting properly attended to with the right treatments, each time, every time. Only independent review organizations can provide for this critical decision support to the managed care organization. Managed care organizations, utilization review and utilization management departments attempt to perform these functions internally without using the appropriate specialists with the latest training in active practice run the risk of not being able to distinguish between necessary and unnecessary treatments. Such decision making is the role of an IRO.

Case managers outsource their medical claims decision making to independent review organizations for a simple reason: They don’t have the medical expertise and specialist knowledge in all areas of care management to make effective medical decisions concerning care recommendation for some patients. By involving an independent review organization in their decision making, case managers are able to allocate health care resources quickly and cost effectively to the right people with a high degree of confidence that those resources and those treatments were assigned effectively based upon the standard of care, medical necessity and what’s in the plan language. Case managers who use independent review organizations are able to improve their service to their clients and to their patients, assuring effective health care delivery. At the same time, IRO help streamline the decision making process and allow for treatments to happen earlier…sometimes with the added benefit of saving lives or improving patient outcomes. Case managers and utilization review managers who actively use IROs for this purpose often comment on how fast and easy it is to get quick determinations that improve medical outcomes for their active cases.

We’ve seen many examples of case managers using an IRO to speed up treatments and improve patient safety and reduce the cost over the patient care life cycle. Case managers and utilization review nurses who deploy IROs also find that it’s a much faster and easier way to make healthcare decisions compared to waiting on internal or allied doctors. Since independent review organizations are in the business of supporting fast and quality patient health care decisions, they’re able to make decisions faster, easier and at a lower cost compared to other processes. This is why case management, utilization review and other types of medical management firms are increasingly turning to IROs as a key resource in their healthcare decision making toolkit.

How to Improve Care Management Decision Making

Companies and individuals who are concerned about making sure that their members and patients get the proper healthcare are increasingly looking to independent review organizations to help them make crucial decisions about the allocation of healthcare resources according to the highest level of need.

Independent review organizations can help this process by providing for a systematic review of all complex and costly medical claims to determine whether or not the treatments that have been prescribed are medically necessary, are appropriate, and are aligned with the accepted standards of care. Independent review organizations are playing an increasingly important role in containing escalating healthcare costs by assuring that health care resources are only allocated to those patients and members who actually deserve them. Independent review organizations provide a key balancing force between payers and patients to assure that patients get the healthcare that they are supposed to every time. At the same time, an IRO assures that no unnecessary treatments are authorized are burdening and adding costs to the health care system in general. An independent review organization provides a critical look at the nexus of the health care decision-making chain in order to improve the delivery of healthcare to all members and patients in a health plan.

Improved Hospital Quality and Risk Management With An IRO

Many risk managers inside hospitals view hospital peer reviews as an effective way to resolve sentinel events on a timely basis and reduce the potential for expensive lawsuits or sanctions. Risk managers view independent review organizations (IROs) as a part of the hospital peer review process. They use IROs as a tool that to improve their decision making regarding sentinel events and the adjudication of potential problems. Hospital peer review, when outsourced to an independent review organization, provides risk managers and quality assurance managers with the ability to quickly understand the facts surrounding a sentinel event or a series of events and allows the risk manager to get an objective review of a physician’s performance.

IRO objectivity benefits both the hospital and the physician. Indeed many physicians are worried about having their work reviewed by outsiders who don’t understand the context of their work or perhaps have never been inside the hospital environment where a particular procedure was performed. But having an outside independent review organization do these types of peer reviews is actually highly advantageous to the doctor because the medical facts associated with the case or series of cases are reviewed by a like specialist who has no bias. A fair and objective determination can be made without the need for an onsite visit.

Many hospitals insist that if a peer review organization reviews their cases then it must come onsite. This is actually a bad idea because the outside organization will have a tainted perspective, making them less able to render an objective unbiased determination. It is true that in some cases, it is important for a peer review organization to come onsite--particularly when they’re looking at systems and processes. But oftentimes the questions on a case are really related to physician performance and the most effective way to make those determinations is by reviewing the case facts and the medical charts, which can be done without an onsite visit.

An onsite visits are also expensive…frequently; it is cost prohibitive for hospitals that are trying to get peer review done. An independent review organization can provide a low cost alternative…by employing a specialist who is in active practice in a like specialty area without asking them to travel. In many cases specialists are extremely expensive and their day rates become cost prohibitive to have them come onsite to a hospital. After using an independent review organization for hospital peer review, most hospitals that have believed that they needed onsite reviews of their cases, have earned that it’s a lot more effective and less costly to use an IRO to review the case materials offsite.

Outsource Hospital Peer Review to an Independent Review Organization

Today, many hospitals are looking to independent review organizations to provide hospital peer reviews on sentinel events and bad outcomes that occur in their hospital. Why? Well it's no secret that the peer review process often does not work very well inside hospitals for a couple of reasons. First, all physicians are too busy working on patients and so peer reviews never get done. Second, there is a lot of conflict of interest associated with peer review committees. Hospital staffs have competitive pressures among the doctors working there. Oftentimes this can lead to unfair determinations against a doctor for competitive reasons.

Outsourcing hospital peer review cases is an emerging a best practice. Many hospitals are routinely sending their most difficult and complex sentinel events out for review to independent review organizations because they know they can get an objective non-conflicted decision and fast turn around time. Most hospitals are using IROs today for hospital peer reviews systematically send cases out and have developed standard criteria about deciding which cases to send out as opposed to letting them languish in peer review committees.

Oftentimes conflicts of interest can not be dealt with effectively inside the peer review committee environment. Many times, the chief medical officer or medical director who is responsible for the case makes attempts to keep cases in house…so there is some resistance to sending out cases to IROs initially. But, organizations that have decided to try IROs have found them to be highly effective in rendering effective objective, unbiased medical decisions using like specialists who base their decision on medical facts.

As an example, smaller and medium sized hospitals in rural areas have a difficult time getting peer review done because of a lack of available specialists, so they often outsource their peer review to independent review organizations. We're performing hospital peer review for dozens and dozens of such rural hospitals across the United States with a high degree of effectiveness.

If your organization has not yet decided to outsource medical peer reviews to an independent review organization, you might want to consider trying it. If you do, you'll most likely come to the following conclusion: Outsourcing your medical peer review cases to an IRO is a best practice and something that should be adopted.

Independent Review Organizations Use Board Certified Physicians

Many payer organizations have resorted to using retired physicians to review some of their medical claims, thinking that they are providing an effective claims decision making process. Yet, independent review organizations today provide a much better alternative. Why? Because independent review organizations, particularly those accredited by URAC, employ only board certified, licensed active practice physicians to review your medical claims.

Why is this important? Standards of care continue to evolve at a very fast pace, and new medical technologies are being used all the time. A retired physician can not keep up with those emerging and changing standards and as a result, may not even be qualified to make an effective medical determination in most areas. On the contrary, an independent review organization has the capacity to maintain state-of-the-art specialist knowledge in all fields of care. IRO specialist doctors keep up with changing medical practices and assure that you’re always getting objective determinations based in the most current medical facts. Board certified, licensed and actively practicing physicians are imperative for making valid medical decisions.

If you're a payer or a health plan, or a medical management firm and you're not using these types of physicians with those types of credentials, you should reconsider your strategy and outsource your medical decision making to an IRO. An IRO will maintain that specialty panel of capabilities that will effectively provide you with up to date knowledge and expertise that's necessary to make the most complex medical decisions involving the most advanced treatments using the latest types of technologies.

Using an Independent Review Organization (IRO) for Specialist Medical Peer Review

If your organization is a payer, a provider or a medical management firm and you're looking to find a medical peer review that can be done fast by a specialist with the same credentials as the claim that you want reviewed, use an independent review organization to perform this procedure…it's fast, cost effective and easy. Independent review organizations recruit, credential and maintain a full panel of medical specialist and sub-specialists just for this purpose, and you can quickly access and purchase their services to get fast turnaround time at low cost.

Using an IRO is fast and efficient because they're set up to quickly perform for you. They can take in a case, assign it to a like specialist and provide you with a decision very rapidly—sometimes the same day that you request it, and certainly within three to seven business days.

If your organization is looking for specialists to review cases instead of building your own panel of medical specialists, consider using an IRO. It’s already invested in the infrastructure necessary to provide fast quality medical decision making to support your process.

How does AllMed Define “Peer Review”?

Peer review is used in many industry sectors to delineate the use of people who are peers within an industry or an organization who review and judge a person’s performance, work product or other behavior. Peer review has been used for years as a part of academia to review professor’s qualifications and credentials. Peer reviews have also been used in other circles such as accounting and finance. But in the area of health care, peer reviews commonly refers to physicians who look at medical cases in order to make an objective third party decision.

Peer review is also a substitute for the phrase “independent medical review,” where physicians are looking at cases to provide claims decisions for health insurance payers, workers compensation insurance payers, disability insurance payers, etc. Peer review also defines the review of sentinel events in a hospital environment for quality management purposes, such as looking at bad outcomes and determining whether there was any misdiagnosis, mistreatment or any systemic problems involved which lead to that event.

Peer review, independent medical review, hospital peer review, medical peer review, all of those terms are really interchangeable today. Unfortunately in the healthcare environment everybody uses their own vocabulary to talk about the same thing. Today “Peer Review” at AllMed Healthcare Management is really a substitute for the words that we prefer to use, either “independent medical review” or “hospital peer review”. In either case, the core peer review function is to take physicians who are not a party to a particular treatment but who are board certified and in active practice in that same area of treatment, and have them examine certain cases in order to provide objective, unbiased determinations on what the root cause of the treatment was—whether or not there is medical necessity, if there was a sentinel event, what was the reason for it, etc.

I hope this clarifies the use of those different terms.

Reducing Healthcare Fraud

It's no secret that healthcare fraud accounts for an estimated 100 billion dollars a year in the United States alone, and it's increasingly a reason that health care costs continue to rise. Unnecessary and fraudulent treatments are being submitted to payer organizations by organized crime and con artists have become big business in North America today. Increasingly, health insurance organizations are looking at new ways to detect, investigate and prosecute anyone submitting fraudulent health care claims.

An independent review organization plays an important role in helping healthcare fraud special investigative units investigate and determine whether claims are legitimate, whether chart notes support a legitimate case and whether medical necessity is associated with a case.

A doctor from independent review organization can quickly look at the charts involved in a claim and decide whether been documents were fraudulently submitted, whether the medical facts in the chart fit the claim and whether there's any up-coding or other tricks used by fraudulent claims submitters in order to get paid for treatments that weren't actually performed or even necessary.

Healthcare fraud is a problem in North America, yet gets very little attention in the news media. It is a problem that needs to be solved in order to reduce the cost of healthcare for all of us. Independent review organizations are playing an increasingly important role in reducing healthcare fraud by helping fraud special investigative units close fraud investigations and provide important insight about which cases should be paid and which shouldn't.

Types of cases reviewed by Independent Review Organizations (IROs)

What types of cases are reviewed by independent review organizations for its payer and preauthorization clients? There's a long list that I'll try to include here: Medical necessity determinations, standard of care, health plan language interpretations, hospital length of stay, experimental treatment reviews, investigational treatment reviews, physician credentialing reviews, hospital peer reviews, disability reviews, workers comp reviews and property and casualty medical claims reviews.

Independent Medical Reviews as an alternative to Independent Medical Examinations (IMEs)

Many disability and workers compensation insurance payers have used independent medical examinations (IMEs) for years to make payment determinations about disability and workers compensation claims. Yet many payers today are finding that a more effective alternative is to use an independent medical review from an IRO.
Why this shift? An independent medical examination isn’t as objective and unbiased as you might believe. When an IME is performed, the patient has an opportunity to convey their own personal viewpoint on what ails them to the doctor or doctors. Doctors are in the business of being apathetic with their patients and may a patient’s claims at face value without necessarily looking at the medical facts. When a patient says, "My back hurts and I can’t stand up straight," the doctor might not substantiate this through an examination. So if the patient does a good job of faking an illness or an ailment, it's very easy for the doctor to concur with what the patient says.

An independent medical review, on the other hand, allows an objective review of the medical chart notes to arrive at a decision based only on the evidence present without being prejudiced by a patient’s comments.

Independent medical reviews are also excellent alternatives to independent medical examinations when disability and workers compensation insurance carriers need to adjudicate claims quickly. When a person files a claim, the carrier is obligated to start paying benefits immediately… but oftentimes it can take several weeks, if not months, to arrange for an independent medical examinations. An independent medical review can be sent out immediately and turned around in a matter of three to seven business days instead of the three to four weeks it takes to schedule an independent medical exam. The speed of independent medical reviews means that the insurance payer can save weeks and weeks of not paying premiums if a patient is not eligible for coverage on the basis of medical necessity.

So, an independent medical review can help adjudicate claims more quickly and cost effectively, as well as save the disability and workers comp carrier significant premiums for falsified claims. That’s why it makes sense for disability and workers comp carriers and payers to use an independent medical review as an alternative to IMEs.

Why even the largest health plans use Independent Review Organizations

Some of America's largest health plans still turn to IROs for medical decision making and review of appeals. Why is this? Even though they have large numbers of physicians on staff, they can not afford to make the wrong medical decisions on all the claims they review. Also, medical staff at large health plans is consumed by other duties that often make it difficult for them to make speedy claims decisions. They also sometimes lack the specialty knowledge that is necessary to match an internal physician with the specific specialty involved in a claim. Finally, health plans struggle to find the right provider and the right specialist and get them to review a case quickly. Using an IRO is a lot easier.

So while many health plans have large staffs of physicians to look at appeals and decide claims, it still makes sense to have a relationship to an independent review organization to fill in the gaps in specialty knowledge and assure proper turnaround time.

Independent Medical Reviews For Different Types of Organizations.

Which types of organizations use an IRO to provide independent medical reviews or peer reviews? Many companies can benefit from this type of service.

Foremost are health plans and health insurance carriers that require an IRO in order to make sure that they adjudicate claims in a properly.

Second are third party administrators (TPAs) that administer benefits and claims for health plan payers.

Third are reinsurers or stop-loss carriers. Stop-loss carriers use independent review organizations as a way to assure that they are getting a second objective and unbiased opinion for their most expensive and complex medical claims that they are called to provide coverage for.

Fourth are large self-insured corporations that pay their own health care benefits. They are increasingly turning to IROs in order to help with their claims decision making.

Fifth are managed-care organizations that are providing preauthorization point of care determinations for their patients.

Sixth are utilization review companies. They use IROs to preauthorize complex, special and costly treatments.

Utilization management companies and business units inside larger firms also use IROs. Medical management companies use IROs routinely to outsource their claims decision making and preauthorization of treatments. Union trusts also turn to Independent Review Organizations to make sure benefits are properly administrated for their union populations.

All of these organizations work in the health care space to provide either payment services or preauthorization of treatments. There are other types of insurers that also use independent review organizations in order to administer claims. Disability insurance carriers, their TPAs and medical management firms also use IROs as well as workers compensation carriers, their TPAs and medical management firms. Property and casualty firms that are paying out medical claims also turn to independent review organizations to review claims. Fraud units working inside larger health plans and special investigative units use independent review organizations to look at the medical necessity of treatments and validate or to root out potential provider fraud.

As you can see, many different types of organizations in different markets turn to IROs as a critical source to decide, adjudicate and authorize health care claims. IROs today are an accepted best practice by the largest and the smallest organizations that participate in managing care for patients today.

Why Third Party Administrators (TPA's) use Independent Review Organizations (IROs)

In today's competitive health care environment, third party administrators (TPAs) turn to Independent Review Organizations (IROs) to assure fast and cost effective claims decision making on the most expensive and complex treatments for the patients they are administering benefits to. Third party administrators lack fundamental medical decision making that’s required to successfully administer health care benefits. Many TPAs have a part-time medical director. The director may be part time or come into the office for an hour or two a week to look at the most difficult treatments. But for TPAs administering patient populations of any size, it's difficult for a part-time medical director to keep up with the workflow necessary to adjudicate claims quickly and cost effectively.

In order to solve this problem, many third party administrators are turning to Independent Review Organizations (IROs). TPAs can easily send questionable cases requiring special medical knowledge to their IRO outsourcing partner for speedy decision making, knowing that each member getting fair, objective and unbiased attention. Third party administrators that use IROs get high speed decision making, lower costs for adjudicating complex claims and meeting regulatory compliance for any approval or denial of benefits. Many third party administrators use IROs not only to look at their most complex cases but also to provide fractional medical director services. AllMed has several clients who not only use us to do independent medical reviews but also use our medical director staff to attend regular utilization review meetings and claims adjudication meetings as a part of the TPA staff function. TPAs that use IROs this way greatly benefit from having a strong, integrated working relationship with the medical staff that only an IRO can provide cost effectively.

Medical Management Firms and Independent Review Organizations (IRO's).

If your company provides case management, disease management, utilization review or utilization management services still isn’t using an Independent Review Organization to provide preauthorization of the most difficult claims, consider selecting one.

Why? Because with today's fast paced health care decision making, it's important to meet regulatory compliance requirements, and also deliver timely quality of care to the patient members of your health plan. Indeed, treatment preauthorization or concurrent review needs to be done very quickly to make sure that patients get quality care in a timely fashion. In a medical management company, a lot of those decisions are made very quickly and need the knowledge of a physician with a particular specialty or sub specialty area. Only an IRO can provide this breadth of knowledge as quick and easy service to help you to make preauthorization determinations.

As a utilization review unit, your company depends on delivering quality of care decisions to its health plans and subscribers in a fast and cost effective manner and to assure these decisions are made based on medical fact. Your teams are looking at hundreds of cases a day and making determinations that affect the lives of lots of people. Why compromise on the quality of care when it's so easy to apply specialty medical knowledge to each individual case by outsourcing to an IRO.

An IRO is a very effective way for you to deliver high quality decisions on each case, making sure that all patients and members get the treatments they deserve according to the medical facts. An IRO also lets you deny expensive or complex treatments that are unwarranted based on those same medical facts. Such determinations are just as important as assuring that the health care resources are allocated to the patients who require them and not allocated to those who don't need unnecessary treatments. To remain a competitive medical management firm today, you must continuously improve the efficiency of your case management and streamline your medical management teams to provide quality utilization review to your clients. Including an IRO as a part of your decision making process and tapping into its trained specialists is an efficient way to make sure that you deliver quality care to your clients.

Independent Review Organizations Ensure Regulatory Compliance

In today’s highly regulated healthcare environment, it's essential for health plans to make sure all treatment denials are objective and based on medical fact. In most states and the federal government (because of ERISA and Department of Labor Regulations), health plans that deny treatment for patients or members who have appealed a previous denial turn to Independent Review Organizations to assure that they're in full compliance. Health plans must make sure that the decision on the appeal is made by a third party that has no conflict of interest in making the decision. The third party also needs to apply specialty knowledge of a “like” physician to look at the medical chart and make that determination solely based upon the medical evidence. Regulatory compliance is then satisfied.

Why Outsource to an Independent Review Organization (IRO)?

Many payers and medical management companies have not discovered the power of outsourcing their medical decision making to an independent review organization…often because they’ve already assembled their own panel of internal doctors or using their own medical staff to make such decisions. Yet with rising state and federal regulations regarding the need for objective, unbiased decision based purely on medical fact, independent review organizations (IROs) offer a simple, easy alternative to other forms of medical decision making, including pre-authorizations that are critical for delivering high quality care according to patient needs.
IROs play an important role in providing care in America’s health care system today.

Over the last couple of decades, they evolved as a result of the patient rights movement. Patients increasingly demanded a fair hearing and a fair decision about whether or not they would be approved medical treatments. IROs filled that need.
IROs began working by adjudicating and making decisions on medical claims in the government sector. Over the last several years, IROs have been utilized increasingly by mainstream health plans and others making such determinations. IROs serve a vital role by advocating for the patient while making sure that each patient only receives the care they deserve based upon medical fact. Bottom line, IROs eliminate wasteful and unnecessary treatments.

If you’re a medical management company or a payer, outsourcing to an IRO is a great way to assure that you make fact-based medical claims decisions and pre-authorizations every time—even the most expensive and complex claims and treatments. IROs have mechanisms in place to provide decision making with a high degree of efficiency and at a very low cost.

A good IRO has a full time recruiting and credentialing function that builds and maintains a specialist panel with all types of physicians and sub-specialists, as well as allied health care professionals. By using its panel, an IRO can easily match each case with a like healthcare specialist to make independent and objective medical decisions. An Independent Review Organization often has a highly automated workflow for routing cases to those physicians, getting their determinations in an efficient manner and typing and producing the written reviews that substantiate the decision in each case. IROs amortize their costs across hundreds (if not thousands) of monthly cases. This advantageous to a payer or medical management firm that doesn’t have similar case loads and therefore can not achieve the same economy of scale.

If your organization still has not unlocked the power an Independent Review Organization for making claims decisions and pre-authorizations, consider outsourcing as a strategy for improving your quality of care for your patient and members. Independent Review Organizations deliver exceptional value—with fast turn around times at low cost.