What is the difference between policy and certificate in care management at Health Maintenance Organizations (HMOs), and how are prior authorizations (PA) compared against them, utilizing guidelines from Milliman Care Guidelines (MCG) and Hayes?

Care Management in HMOs: Policy vs Certificate Differences and Utilization Review Tools

In Health Maintenance Organizations (HMOs), policies represent comprehensive organizational guidelines for care management, while certificates outline specific member benefits and coverage details that are used when evaluating prior authorizations against established clinical criteria such as MCG and Hayes guidelines.

Policy vs Certificate in HMO Care Management

Policies

• Policies in HMOs are comprehensive organizational guidelines that establish standards for care delivery and management across the entire organization 1
• They define the structured approach to coordinating healthcare services across multiple providers and settings, including screening processes to identify individuals who would benefit from care management 1
• Policies outline the implementation of care plans through coordinated service delivery and ongoing monitoring as patient needs change 1
• HMO policies typically evolve over time to become more comprehensive, as demonstrated by studies showing increasing attention to systems supporting detection and management of health conditions 2

Certificates

• Certificates (also called certificates of coverage) are member-specific documents that detail the exact benefits, coverage limitations, and eligibility requirements for individual members 1
• They serve as the contractual agreement between the HMO and the member, outlining what services are covered and under what circumstances 1
• Certificates include specific information about cost-sharing requirements, referral processes, and appeal rights when services are denied 1
• Unlike policies that guide organizational practices, certificates focus on member entitlements and are used to determine coverage decisions 1

Prior Authorization (PA) Evaluation Process

Comparison Against Certificates

• When evaluating prior authorization requests, the member's certificate of coverage is first consulted to determine if the requested service is a covered benefit 1
• The certificate establishes whether the member is eligible for the requested service based on their specific plan benefits 1
• If the service is not listed as a covered benefit in the certificate, the PA may be denied regardless of medical necessity 1
• The certificate also determines any applicable limitations, exclusions, or requirements (such as step therapy) that must be considered during the PA review 1

Comparison Against Policies

• After confirming coverage under the certificate, the PA request is evaluated against organizational policies that establish the criteria for medical necessity 1
• Policies provide the framework for how care management decisions are made, including which clinical guidelines are used 2
• Organizational policies determine the process for review, including which healthcare professionals are involved in the decision-making process 1
• Policies establish the protocols for communication with providers and members regarding PA decisions 1

MCG and Hayes Guidelines

Milliman Care Guidelines (MCG)

• MCG (Milliman Care Guidelines) is an evidence-based clinical decision support tool used by HMOs to determine the medical necessity and appropriateness of healthcare services 3
• MCG provides specific criteria for evaluating the necessity of inpatient stays, procedures, and treatments based on diagnosis and patient condition 3
• Studies have shown that using MCG guidelines can improve efficiency in managing HMO inpatients and reduce medically unnecessary hospital days 3
• MCG includes Optimal Recovery Guidelines (ORGs) that establish goals for length of stay and appropriate care settings for specific diagnoses 3

Hayes Guidelines

• Hayes guidelines are comprehensive technology assessment reports that evaluate medical technologies, procedures, and treatments based on available clinical evidence 1
• They provide detailed analyses of the safety, efficacy, and cost-effectiveness of medical interventions 1
• Hayes assessments include ratings that indicate the strength of evidence supporting specific medical technologies or procedures 1
• HMOs use Hayes guidelines to make coverage decisions for new, emerging, or controversial treatments where established standards may not yet exist 1

Integration of Guidelines in Care Management

Application in Prior Authorization

• When evaluating a PA request, care managers first confirm coverage under the certificate, then apply MCG or Hayes criteria as specified by organizational policies 1, 3
• The application of these guidelines helps ensure consistent, evidence-based decision-making across the organization 1
• Care managers document how the patient's clinical information meets or fails to meet the established criteria 3
• When criteria are not met, cases may be escalated to physician reviewers for additional clinical judgment 1

Team-Based Approach

• Effective care management involves a multidisciplinary team including physicians, nurses, and/or social workers who collaborate in applying these guidelines 1
• The care management team must be linked to the patient's primary or continuing medical care to ensure coordination 1
• While one qualified health professional may perform care management functions, the process involves coordinating multiple providers across all care settings 1
• Studies show that team-based approaches using established guidelines can improve patient outcomes and reduce unnecessary utilization 3, 4

Common Pitfalls and Challenges

Potential Conflicts of Interest

• When the care manager is also a service provider, there may be conflicts of interest that affect how guidelines are applied 1
• Services might be provided based on agency profit rather than patient need, or conversely, services might be inappropriately restricted if the manager is at risk for the cost of care 1
• To mitigate these conflicts, many HMOs separate the roles of care provision and utilization management 1

Funding and Reimbursement Issues

• Funding for care management services is neither uniform nor fair across different healthcare systems 1
• Multiple reimbursement mechanisms create a confusing array of service providers and eligibility requirements 1
• HMOs must navigate these complexities while ensuring that care management decisions remain focused on patient needs rather than solely on cost containment 1, 5