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May 3, 2001


University Senate Matters, Nathan Hershey

More than a month of ago the University distributed the Pitt-Flex open enrollment form to employees. A variety of fringe benefits options are available from which employees may choose. One option is to select one of the three different plans offered by the UPMC Health Plan. The amount of the premiums to be paid by a University employee depends in part upon which of the plans the employee selects. The HMO plan is the least expensive, the Point-of-Service plan is the next most expensive, and the Comprehensive plan is the most costly to an employee.

Anyone who gives the plans more than a cursory glance will note that every benefit and option provided to the members of the Comprehensive plan — the most expensive — is available to those in the POS plan. What does that mean? Very simply, any employee who selects the Comprehensive plan will pay depending on whether the employee is seeking only individual coverage, or coverage for himself/herself, plus one or more family members, anywhere from $28 to $77 more per month to participate in the Comprehensive plan, although it offers no difference in benefits and choices than the POS plan. For a family, that means spending over $900 additional per year for choosing the Comprehensive over the POS plan. Any employee who has already selected the Comprehensive plan should contact the Compensation and Benefits Office of Human Resources and change from the Comprehensive to the POS plan, and save his/her money by reducing next year's premiums.

* Last month I wrote a letter to a UPMC Health Plan official, proposing that a referral requirement in the HMO and the Point-of-Service plans be eliminated, to wit, the requirement for a referral from the patient's primary care physician to a specialist physician. This proposal would not eliminate other referral, authorization and notice requirements in the HMO and POS plans; only the referral for the visit to a specialist's office would be affected.

There are several reasons I gave for this suggestion. First, many of the problems brought to my attention by health plan members are due to some failure in the referral process. Usually, the PCP's referral of the m ember to a specialist has not been recorded in some fashion in the health plan's database. That results in an incorrect explanation of benefit, which then is followed by a bill, which should not have been sent, for services from the physician specialist who provided the service. Eliminating the need for the referral will avoid a good many communications and much exasperation in the process of resolving such problems.

In addition to getting rid of recording problems associated with referrals, there is a practical reason that goes to the basis for requiring referrals from PCPs to specialists in the first place. Typically, managed care plans require referrals in those plans in which PCPs have in their compensation arrangements either a financial incentive not to make referrals, or are subject to a financial disincentive for making referrals. The PCP is used by managed care plans to control the utilization of resources, because usually the PCP has a financial interest in not making "unneeded" referrals. However, the health plan does not compensate PCPs on a basis that creates an incentive not to refer, or a disincentive for referring, thus the financial interest which leads to control of referrals by PCPs is absent. Without the incentive/disincentive element, PCPs will make the referrals strictly upon the basis of their belief as to what is appropriate for the patient. The health plan apparently takes the view that, while it has not established an explicit incentive/disincentive mechanism for PCPs, it could use its data on referral practices in its utilization control program. Given the many complaints about referrals, and the apparent shortcomings of the referral process in many instances, it would appear that the operation of the current information system would not provide much useful information to the health plan with regard to referral patterns. In any event, my proposal is for the health plan to eliminate the referrals on a trial basis; the plan could compare utilization during the trial period with the prior time period to determine whether inappropriate utilization has risen because of the lifting of the referral requirement.

I hope to get some response to my request from the health plan in the near future. If I don't, I will pursue the matter again.  

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