Mediating denials of pharmaceutical services: an alternative to traditional appeals

The effectiveness of mediation as a primary tool to resolve pharmaceutical service denials by managed care is discussed. A three-month prospective randomized trial of 48 medical appeal cases involving prescription drugs was conducted by Tennessee's Department of Health. Patients whose prescription claims were denied by the state's Medicaid managed care program and whose appeals were deemed medically unnecessary by one of two independent reviewers were randomly assigned to either a standard procedure group or a mediation group. Appeals assigned to the standard procedure group were immediately referred for administrative hearing. In the mediation group, the independent reviewer assigned to the case contacted the patient's care provider, discussed the case, and recommended an alternative drug. The care provider either accepted the suggested compromise, concluding the appeals process, or declined the suggestion, allowing the appeal to go to hearing. Reviewers recorded the amount of time they spent on each appeal. The mediation did not substantially increase the time the reviewers spent on each case (mean +/- S.D. minutes, 15.83+/-7.89 mediation versus 12.26+/-6.96 standard procedure). The mean number of appealed drugs was also similar between groups (1.46+/-0.78 mediation versus 1.35+/-0.89 standard procedure). Only 21% of appealed cases went to hearings in the mediation group, while 80% did in the standard procedure group. The average cost to the state for employing mediation ($142.92+/-$186.77) was significantly lower than the average cost incurred by using standard procedures ($355.75+/-$175.43). Mediation is an effective and efficient tool for resolving patients' appeals of denied pharmaceutical services.