Agency ‘scrambles’ to handle claims in-house

A backlog of requests to perform medical services for SoonerCare patients is going down, but the state still has work to get the process up and running after budget problems forced a quick plan B.

The Oklahoma Health Care Authority had contracted with a private vendor to handle decisions on whether it pays for some services for SoonerCare recipients since 2010. Their job was to decide if a service was “medically necessary” for a given patient, through a process known as prior authorization.

The patient still can receive the treatment if an insurer — in this case, the state — denies authorization, but has to pay the full cost. OHCA reviews more 1,000 services that have high costs or are prone to overuse.

The plan was for OHCA to request bids in late 2016 as contracts neared their ends, but there was a problem: the agency would have to pay about $2 million to retain both the old and new contractors during the transition period.

Ordinarily, that would not matter, because the agency could draw on reserve funds, but the state’s financial situation made it impossible to spend on anything that wasn’t already included in the budget, said Garth Splinter, retiring deputy CEO at OHCA.

The state faces a $215 million budget gap. If the Legislature doesn’t find a solution, OHCA will lose $70 million this year.

The result is that OHCA has to take over processing prior authorization requests with only 13 staff — about half as many as the contractor used. Requests backed up in August and September, approaching 3,000 at their highest point. They’ve fallen closer to 2,000, which is roughly one day’s worth of requests, Splinter said, and most requests are processed within a week.

“It’s been a scramble to make do,” he said.

They haven’t been able to examine requests as deeply as they would like because of the constraints, Splinter said. That likely means fewer hassles for patients and providers, but it also could increase the odds patients will receive unnecessary treatment, which has its own risks. So far, OHCA is on track to approve about $900,000 more in services than the contractor did last year, but still will save money because using staff costs less than the $6 million annual contract.

Ultimately, it’s a balancing act of trying not to approve unnecessary services, while trying not to hold up care that would benefit patients, Splinter said. And the more closely they want to review each request, the more staff they need — staff that they can’t hire in the current budget climate, he said.

Eventually, a software package called InterQual could ease some of the burden on staff, Splinter said. The software, developed by health technology company McKesson, has the provider enter information about the patient and the service requested, and tries to determine whether the service is medically necessary. Before they can use it, OHCA experts will have to determine that the software is using the same criteria their human employees would, he said.

Once it’s up and running, the software will be able to make a recommendation, but a human still can make the final decision, Splinter said. In practice, staff’s efforts will be focused on complex cases and those where the software recommends denying a service, he said.

“This is a tool, a very interesting tool, but we’re not going to turn over decision making,” he said.