Managed care organization authorization denials: Lack of patient knowledge and timely alternative ambulatory care

Study objective: To assess patient knowledge of managed care organization (MCO) regulations, availability of alternative ambulatory care, and patient outcome after MCO insurance authorization denial for an emergency department visit. Methods: A medical screening examination and a follow-up structured interview were conducted with patients denied authorization for ED visits. The study was conducted at a large urban hospital with 36,000 annual ED visits and 40% MCO patients. Results: During a 7-month period, 151 patients did not receive MCO authorization for ED care. The interview response rate was 75% (104/138) with 13 patients excluded. Eighty-three percent (86/104) of respondents came to the ED because they believed their problem was an emergency. Four percent (4/104) of the respondents had been instructed to go to the ED but were later denied authorization, whereas 85.6% (89/104) did not know that the MCO could deny payment. Only 37% (38/104) of the respondents reported having received instruction on the MCO preauthorization process, whereas of the 19% who contacted their MCO as instructed, all resulted in scheduling difficulties. Although 57% (59/104) received follow-up within 24 hours, 11% (11/104) of the respondents had a subsequent return visit to the ED with a subsequent admission rate of 4% (4/104). Conclusion: Few patients are aware of the need for MCO preauthorization for ED care, and almost half do not receive alternative care within 24 hours. A significant number of patients (11%) returned to the ED with an admission rate of 4%.