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UnitedHealth Cuts Some Red Tape

November 8, 1999

DALLAS (AP) _ UnitedHealth Group, the nation’s second largest health insurer, plans to discontinue a type of red tape that has vexed many patients: It will give doctors, not administrators, the final say on what treatments are medically necessary.

UnitedHealth, which covers 14.5 million people across the country, paid more money to scrutinize and deny questionable treatments than the practice saved, according to Dr. Archelle Georgiou, the Minneapolis-based company’s chief medical officer.

Officials said UnitedHealth will announce Tuesday that it will grant doctors decision-making ability on their patients’ treatments, even if the insurer’s staffers believe such services aren’t medically necessary.

Some experts, terming the company’s planned move a historic one in managed care, expect other insurers to do likewise because of industry pressure.

``It’s just extraordinary. Here they are saying that there are other ways to save money without rationing care,″ Robert Blendon, a Harvard University professor of health policy, told The Dallas Morning News. ``It removes a fundamental tenet of how these plans have been operating in order to be cost-effective.″

Georgiou said UnitedHealth approved 99 percent of requests, so the process was unnecessary.

``Within UnitedHealth care, we were spending $100 million a year nationally to say yes,″ she said. ``Yet, it was the root cause of many of the negative perceptions of managed care.″

In the mid-1990s, managed care became the nation’s primary health insurance system because costs were escalating. But patients and physicians have grown resentful of HMOs in recent years.

Insurers are now placing more trust in their physicians by reducing the number of procedures requiring pre-approval, according to the American Association of Health Plans. The industry trade group has surveyed the top 25 managed care companies to assess how they handle treatments doctors recommend.

``We’ve known all along that these sorts of administrative hurdles are costly, not only in lives and quality of life, but it’s also costly to administer,″ said Lisa McGiffert, a Consumers Union senior policy analyst in Austin.

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