Managed Care Dilemmas

James J. De Santis, Ph.D.
138 North Brand Boulevard, Suite 300
Glendale, California 91203-4618
TEL (818) 551-1714

Managed Care Dilemmas
by James J. De Santis, Ph.D.

What is Managed Care?

A significant transformation of the health care delivery system has occurred over the past ten years--90% of Californians have been shifted to a new type of health insurance called "managed care." Managed care organizations--or "MCOs"--may go by various names, like HMO, PPO, EAP, or IPA. Such insurance may be part of a benefits package offered by an employer or union. Managed care is a business strategy to increase efficiency and cost-effectiveness by reducing the use of unnecessary services.

When it comes to health care, this approach raises some ethical dilemmas. Will an increasingly competitive marketplace pressure MCOs to exploit an inherent conflict of interest if they can financially profit by limiting service? In actual practice, we find that, people stop therapy when they no longer need it. In fact, research shows the average length of outpatient therapy is about six sessions. A managed care strategy may be fundamentally inappropriate for psychological therapy because it compromises two important aspects of that therapy--control and privacy.

Loss of Control

Psychological therapies generally emphasize the development of personal responsibility and self-determination. Therapy is guided by the professional judgement of the therapist and facilitated by the motivation of the client. When you opt to have a third party like an MCO pay for services, your therapy becomes subject to the MCOs control.

MCOs may discourage your use of benefits by means of financial disincentives like high deductibles or copayments that actually increase as treatment progresses. Access may be restricted by a gatekeeper like a primary doctor or a case manager who is employed by the MCO to decide if a person can meet with a therapist.

Clients may be assigned a therapist or allowed a choice from only a limited panel of therapists that the MCO selects. MCOs are free to deny participation to any therapist without explanation. Your therapist can be terminated without cause and be required to transfer you to another therapist chosen by the MCO.

Almost all MCOs deny treatment for some kinds of issues, such as marital conflict, parent-child conflict, personal growth, bereavement, or evaluation of learning disabilities. Certain services may be excluded from coverage as well like psychological testing.

Policies practiced by MCOs effectively may result in what many professionals consider a "rationing" of services. While clients are told their benefit includes a specified number of visits available per year, like 20 visits a year, they are often not told that the actual number of visits allowed will be subject to the discretion of the MCO. MCO's may disallow your full benefit.

Customarily, a case manager who is employed by the MCO--who may not be a therapist and who never meets the client--will monitor treatment, review decisions made by the therapist, and decide if requested services are "medically necessary." These measures restrict the autonomy of the therapist in making decisions about care based on their professional education, training, licensure, and experience.

MCOs usually require the therapist to make repeated, periodic requests to continue coverage after every few therapy visits. Treatment can sometimes be interrupted or delayed because of the administrative time required for phone calls and paperwork to obtain these additional authorizations.

Most MCOs emphasize short-term goals and urge brief approaches that must hurry through painful issues, disregard underlying causes, and treat only the symptoms of the problem. For anxiety or depression, some MCOs prefer the use of psychiatric drugs or may require you to see a psychiatrist.
An extensive appeal process may be necessary before reversing MCO decisions about your treatment. Unlike a therapist, MCOs are immune by federal law from being held liable for injuries caused by failure to exercise due care in the decisions they make. Effective January 1, 2001, health plans are liable for any and all harm they cause, however.

Loss of Privacy

Privacy is the basis for an effective client-therapist relationship. The therapist's office must be a safe place to discuss private feelings and thoughts in comfort and dignity. With involvement of an MCO, whatever clients tell their therapists is often no longer private.

On first arriving at a therapist's office, clients may feel so bad or so anxious to just get started that they don't care who knows about their treatment. They may consent to the release of extensive private information to an MCO without considering the implications. The therapist may then be required to disclose detailed accounts of sensitive information you discuss--your thoughts and feelings, family problems, love life, addictions, and financial or legal difficulties, without additional consent or notification to you.

The control which MCOs need to restrict coverage is primarily achieved through review of a client's personal information. Mandatory reports are transmitted by the therapist to the MCO by telephone, mail, or fax. This information is usually entered into a computer for future reference, most often filed under the client's social security number.

While MCOs usually assure clients that no information will be released to an employer or other parties, the therapist has no control over the security of this information once it has been sent to the MCO. One study indicates that as many as 17 employees of an MCO may have access to a client's private information.

What You Can Do

Possibly the surest method of safeguarding your privacy is to not waive your right to confidentiality in the first place. In the last five years, a growing percentage of people have been placing greater emphasis on preserving privacy than on saving money--purchasing mental health services privately from their therapist.

If you must rely upon insurance, obtain a plan that entitles you to all services that will address your needs. Quality mental health coverage does not discourage access through gatekeepers or deductibles, does allow you the freedom to choose your therapist, does not include financial incentives to limit care, does offer a broad range of services, does not restrict the professional autonomy of your therapist, and does preserve a high degree of privacy for you.

Clarify your coverage with your union or employee benefits manager before you need it. If you have a managed care plan, ask your employer or union for an alternative.

If you use managed care insurance, ask your therapist how services may be affected--including what information may be released and to whom and what constraints may be placed on your therapist in treating you. Understand your options for appeal. If services are disallowed, don't immediately stop treatment; it is appropriate for you instead to discuss the matter and all your options with your therapist first. MCOs can deny coverage, they cannot deny service.

If you exhaust your insurance benefit and still would like to continue services you have been receiving, discuss a plan of care with your therapist.

Advocate with your representatives in government about concerns you may have about managed care practices and ask for legislation to regulate the managed care industry.