Civil Forensic Psychiatry after Managed Care

Presented as a workshop at the national meeting of the American Academy of Psychiatry and the Law in Seattle, Washington on October 20, 1995

The term "managed care" evokes joy in the hearts of corporate benefits managers searching for ways to save health care benefit dollars, and rage in the hearts of providers and recipients of health care services who feel cheated out of coverage to which they consider themselves entitled. Few forensic experts have "inside" experience with managed care organizations (MCO's). By sharing his limited but significant experience with both managed care and forensic psychiatry the author hopes to enlighten both attorney's and forensic experts involved in cases pertaining to behavioral health care in the age of "managed care".

It is a mistake to view managed care as a fixed concept. Rather, this version of prepaid health care changes constantly, and will likely continue to change. Also, since few standards have been imposed, this remains a proprietary commodity, individually defined by the creating organization. Most managed care programs share some common characteristics. Essential to the concept is some kind of oversight or review of patient care services by professionals, not always "peers," who may participate in screening and referral, benefit verification, gate keeping, quality assurance, and utilization review. A typical behavioral (mental illness and substance abuse) managed care process is described below. This model is common to "carve out" MCO's. This term refers to the isolation of the behavioral health care benefit from the general medical benefit.

Regardless of its particular form or function managed care is growing. MCO's already control the behavioral benefits for large numbers of beneficiaries, and, although the growth may be slowing, it will probably continue. Changes in managed care may eliminate the often adversarial external case manager in favor of capitated provider groups that take risk, but the review process will remain an essential part of future health care delivery. In the opinion of this author the psychiatrist practicing in the forensic arena must have at least a basic knowledge of the implications of managed care in order to function optimally as an expert witness.

The author owes much of the conceptual basis of this paper to a notion that forensic psychiatrist Phillip J. Resnick, MD describes in his courses. Dr. Resnick contrasts the position of the treating physician and the forensic examiner. The treating physician tends to act as an advocate for the patient, while the forensic examiner tends to approach the subject from a skeptical perspective. In this author's experience medical review as practiced in the utilization review or managed care business is comparable to the forensic position. This author believes this polarization provides the impetus in the adversarial process for much health care related litigation. As managed care and prepaid health care systems continue to evolve these poles may come closer due to changing incentives, providing less drive for the adversarial process of litigation. Other implications are discussed below.

The Case Management Process

Managed care organizations may use a panel of contracted providers selected to meet quality, utilization, and other criteria. Often the contract may include an agreement to accept discounted fees and allow access to provider clinical records. Case managers screen first-time callers and refer them to the lowest level of care they deem adequate, sometimes after an initial assessment by a panel provider who requests authorization for further treatment services. This initial contact between patient and reviewer may be the only instance of direct communication between the two. Thereafter the reviewer depends upon the provider for information to justify continued treatment. The case manager continues to determine medical necessity and appropriate level of care at intervals until the treatment is completed or the benefit is exhausted. Under some contracts the provider agrees not to bill for services not deemed "medically necessary" by the MCO. The case manager may also monitor quality of services rendered. Adverse events such as suicide, assault or serious adverse effects of treatment may prompt special scrutiny, often with requests for all records from all providers connected with the case.

Case managers must maintain records of their work for reasons similar to those that apply to health care providers. The records provide documentation of actions taken and the basis and rationale for those actions. They allow supervisors or coworkers to assume management of a case in the absence of the original reviewer. Finally they provide a longitudinal perspective on a case that may be helpful for the review organization, but may provide a unique if unintended valuable spin off for patient care. Usually the provider relies on a single interview and the patient's self report to develop the past history. The MCO, though, can maintain a more comprehensive and reliable history of treatment episodes, thus enhancing treatment effectiveness.

The Appeal Process

Request from a beneficiary for reimbursement for services provided by a non paneled provider or by one without recognized credentials increases the likelihood that the case management process will become adversarial. This can occur when patient and provider want continued treatment, but have failed to convince the case manager or first level reviewer that medical necessity criteria have been met. The provider and patient may then appeal the adverse determination or request a higher level of review, usually by a physician. That decision as well may be appealed. Under some circumstances appeal to an outside organization that provides review services adds yet another organization with a need to receive and store medical information.

The managed care organization may collect or store any information recorded in the provider's medical record, including copies of the paper record itself. Identifying data may include names of family members, especially if they are involved in treatment. Reviewers record content of all contacts relating to the case, though in varying detail. Thus, the reviewer may place information not present in the clinical records of providers in the managed care database. This can include description of nonstandard practices or procedures, hostile or threatening remarks, and even comments regarding the perceived mental or emotional state of the provider. The MCO will expect the reviewer to document actions by the provider, possibly related to resentment at some aspect of the review process, that may be damaging to the patient. In addition the case manager may record contacts with a variety of significant others, including but not limited to other providers, employee assistance professionals, family members, romantic partners, friends and school teachers.

Example: Smith v Freddy's Fish House

In this imaginary case Smith alleges that sexual harassment at Freddy's caused a condition diagnosed by her treating psychotherapist as adjustment disorder. The psychotherapist practices in a clinic which hopes to attract managed care contracts by advertising cost effective short term psychotherapy. The expert psychiatrist for the defense discovers, however, that Smith, paying out of pocket for the treatment, has attended weekly sessions for nine months with little evidence of improvement. She recommends investigation of the review criteria of the clinic leading to the discovery that, had those criteria been applied to Smith's case, the treatment would have terminated after only six sessions. She is able to suggest in testimony that the length of treatment may not prove the severity of the illness.

Obtaining Managed Care Records

This author is aware of no case law involving attempts to obtain such records of behavioral case management from an MCO. It seems likely the MCO would resist such attempts. These records are often widely accessible within the MCO which may have few explicit policies for protecting confidentiality.

Standards of Care

MCO's have led the way in developing written criteria and guidelines for utilization and clinical management of behavioral disorders. Reference to these documents may be used to strengthen or undermine arguments regarding community standards for treatment. Naive attorneys may assume that psychotherapy is something a patient "gets into", continuing once or twice a week until he is cured, possibly years later. Under case management this rarely occurs. Instead, specific measurable and attainable objectives are established, reasonable length of treatment is estimated, and failure to achieve those goals is expected to result in a substantial change in diagnosis or treatment plan. In some cases treatment may be terminated despite lack of improvement, but with the expectation that the treatment may bear fruit some time in the future.

Panels of Contracted Providers: "Managed Mediocrity"

MCO's believe there are too many psychotherapists. There may not be too many psychiatrists in most communities. There probably are too few child psychiatrists in most communities, even for MCO's. Psychologists may be hurt the most since they expect fees comparable to physicians, but cannot (yet) prescribe drugs, and are seen by MCO's as no more able to provide psychotherapy services than less costly masters level professionals. It is a buyer's market, and this is reflected in contract provisions (such as discounted fees) as well as the segregation of providers into three groups.

The practice of contracting with a closed group of providers who will be the only ones eligible for reimbursement or who will be reimbursed at a higher rate than non-panel providers carries the potential for changes with forensic implications. A kind of triage occurs when MCO panels begin to invade the provider community. Providers who are very busy, often with clientele able to pay out of pocket, may not feel attracted to these contracts. Many, but not all, of these providers are extremely competent and may be some of the most cost effective. Providers attracted to managed care contracts are more likely to be worried about keeping their practices full. The screening process will insure that nearly all of them are at least minimally competent with no black marks on their records. Is this the mediocre group? The remaining providers are those rejected by the managed care companies because they are viewed as less capable or too eccentric, and those who reject managed care on principal despite the fact that their practices are not full. Some of these providers may be quite competent, but not able to sell themselves well.

So where will the plaintiff's attorney want his client to go for a serious diagnosis and lots of treatment? The third group above may be eager to take on this work. Some of this group may also be eager to become involved in forensic work. Will MCO's want to pursue forensic business? Case management of workmen's compensation carries the potential for great cost savings and quality enhancement. Would this eliminate the need for independent examinations or simply incorporate that process into the capitated group. On the other hand will those who do extensive forensic work lose credibility because of lack of experience in the prevailing behavioral health care delivery system?

Unnecessary Treatment

The widespread application of the concept of "medical necessity" in the managed care industry has been a source of consternation to providers and beneficiaries denied reimbursement for treatments that do not meet medical necessity criteria. In some cases, however, successful completion of medically necessary treatment by the panel provider with an MCO may have established a positive relationship between the provider and the recipient. They may want to continue "treatment" directed at personal growth with the agreement of all concerned that the cost will be born voluntarily by the patient. Some provider panel contracts disallow this. Even more challenging is the same scenario in a capitated practice where the provider or the group, rather than an external case manager, may determine the point at which the cost shifts to the patient. There will be a strong financial incentive for this to occur early in treatment.

Personal Injury

Awards in these cases often include a fixed amount to cover the costs of treatment of a psychiatric disorder attributed to the injury. Estimates may be adjusted downward in the future if defense experts can point to standardized, lower cost treatments provided under managed care. Credibility of plaintiff's experts can be challenged by revealing lack of experience with managed care methods and standards. After the award, who will provide the treatment? The MCO panel provider may be able to accomplish treatment at a savings to the patient, but may be too busy with prepaid cases. This may also require a paradigm shift that may be challenging, i.e. the same provider may be treating most patients under tight management, while treating others without external constraints.

Managed Awards

Will the judicial system incorporate managed care? Certainly a trust fund could potentially be stretched further if the behavioral treatment paid for is made more cost effective by case management. Could personal injury awards be reduced by mandating case management for treatments paid for after the settlement?

Professional Liability

Managed care records should be obtained and searched for information that might help either the plaintiff or the defendant. Remarks made by the provider-defendant and recorded only by the case manager might assist either side. Likewise, if the care is provided under MCO management, adherence to company policy and criteria may assist the defense while demonstrated failure to adhere may benefit the plaintiff. Plaintiffs should look for evidence that the provider has abused the patient-provider relationship in expressing hostility to the managed care process.

The future of forensic psychiatry may be affected in many ways by the intrusion of managed care into behavioral medicine. The challenge for the forensic psychiatric expert will be maintaining current familiarity with the inner workings of managed care organizations. On the other hand forensic scrutiny of managed care organizations may strongly affect their evolution.

Suggested Reading:

Goodman, Michael, et al; Managing Managed Care; 1992; American Psychiatric Press

Feldman, Judith & Fitzpatrick, Richard ed.; Managed Mental Health Care; 1992; American Psychiatric Press