Risk Management

Managed Care Systems and Physician Liability

By Jerome W. Bettman Sr., MD, and Byron H. Demorest, MD

[Argus, October, 1993]

Cost-cutting efforts by managed care systems pose a number of potential risks to the high quality care that careful and concerned ophthalmologists traditionally have given their patients. The result is increased liability for all physicians, who are involved in managed care plans.

Three major problem areas in managed care systems may lower the level of care to ophthalmic patients:

• Denial of care by primary care physicians or utilization review personnel;
• Erroneous or missed diagnosis byline “gatekeepers” within the managed care system;
• Treatment by general ophthalmologists of conditions that ordinarily would be assigned to subspecialists.

Managed Care Utilization Review

The most frustrating and perilous situations under managed care arise from substandard utilization review or failure by a primary care physician (PCP) to refer initially. The objective of capitation or utilization-containing costs-can lead to denial of surgical treatments that an ophthalmologist deems necessary on the basis that they are “cosmetic.”

Corrective surgery may be denied for children with ptosis, even though they may develop astigmatism if not treated. Adults with strabismus may not be approved for surgery despite their difficulty in obtaining employment because of their “evil eye.” Senile patients with severe blepharochalasis, or patients with early cataracts who suffer from severe glare problems also may be denied corrective surgery. The psychological and practical problems experienced by these patients all too often are overlooked in an effort to contain costs by the insurance carrier or to shift money to the PCP of the capitated group.

An ophthalmologist whose patient is denied treatment should take the following steps and document these actions:

• Clearly inform the patient of the medical problems that may result from denial of the recommended treatment.
• Appeal the denial in writing and insist on the best interests of the patient.
• Do not give up and ignore the situation if the appeal is denied. Help the patient find an appropriate alternative.
• Tell the patient that he or she may be liable for the cost of any treatment that was denied.

The Role of the Gatekeeper in Managed Care

Erroneous diagnosis or misdiagnosis currently accounts for approximately 25% of all claims brought against physicians. Managed care could potentially increase that number by shifting responsibility for eye care to PCPs or optometrists who may not be qualified to diagnose and treat certain diseases of the eye.

Pediatric ophthalmologists are seeing children whose treatment under managed care has not followed what ophthalmologists consider to be the standard of care. For instance, early onset or infantile esotropia patients may be seen first by an optometrist who tries low power plus lenses for patients with no accommodative factor. Meanwhile, referral to the ophthalmologist is delayed past the two-year “window of opportunity” for successful surgery. By demanding that the patient first see a gatekeeper, instead of going directly to an ophthalmologist for diseases of the eye, the managed care system increases the likelihood that certain diseases either will be misdiagnosed or missed entirely.

The pressure to contain costs is omnipresent and adversely affects the PCP, who may delay referrals beyond the optimum time to avoid high specialists’ fees. When patients finally are referred for consultation, there is a shared responsibility for care of that patient between the ophthalmologist and the PCP.

In a recent case of shared care, a patient with a pseudomonas keratitis was seen by a PCP and treated with a sulpha drop. By the time the patient was referred to an ophthalmologist three days later, there was a severe corneal ulcer with visual loss. The consultant-ophthalmologist was unable to return the vision to 20/20 and was held responsible, along with the PCP, for the patient’s vision loss.

Assuming Subspecialty Care

Within ophthalmology, general ophthalmologists practicing under managed care or capitated programs may be asked to assume care that should be assigned to subspecialists, particularly in retina, glaucoma, pediatric ophthalmology or neuro-ophthalmology. Depending on whether the third-party payer is an IPA, HMO or PPO, there may be a contractual obligation to provide care for all patients referred by the managed care organization. One member of a group eye practice may be designated the “pediatric specialist” for the group even though that ophthalmologist may not have completed a fellowship or had any special training in pediatric ophthalmology.

Whether you are the referring or the consulting physician, you will be held responsible for the care of a patient who is under your treatment. To safeguard your patient’s health and to minimize your risk of liability, take the following steps to communicate with other physicians treating the patient:

• Develop a plan for coordinating total patient care.
• Agree on who has primary responsibility for total patient care, adjusting primary responsibility as the patient’s condition dictates.
• Agree on who has primary responsibility for providing the patient and family with information.
• Keep the patient fully advised of all these decisions.

(From Risk Management Principles and Commentaries for the Medical Office, American Medical Association/Specialty Society Medical Liability Project, Chicago. 1990.)