Insurance Issues

Therapy and Insurance

There are two issues to consider before you access your health insurance benefits. The first issue is the confidentiality of your medical information. Second are the restrictions to your care based on your insurance company's care managers. Each managed care or indemnity policy is different and has different benefits and restrictions. Ultimately you are in control of how you use your benefits. It is the intent of this article to address the current issues in managed behavioral health care.

HIPAA ( Health Insurance Portability and Accountability Act) governs the privacy and security of all transmissions of health related information. This act has been part of a long term legislative battle, fighting over a treasure trove of data- our personal medical information. Many entities would like to have access to this data. Insurance companies and hospitals want to know how we have utilized our health benefits and what services have been provided to us. Law enforcement would like evidence to crime. Employers want accountability to their health insurance premiums and pharmaceutical companies want new customers. Essentially, with the advent of HIPAA, our government is granting itself the permission to examine our medical history.

The intent of HIPAA was to create a seamless structure to process and pay for treatment. The regulation was to focus on transmission and storage of electronic medical data. However, as the complexities of creating such national legislation grew, the task of creating HIPAA fell to the Department of Health and Human Services, which expanded the regulations beyond electronic data to include paper medical charts.

Which providers are regulated by HIPAA? In general, mental health providers who accept third party reimbursement for services must comply with HIPAA. That includes a provider who provides a diagnosis and bills their services to your insurance plan.

The HIPAA regulations create three sets of standards seen as beneficial. The first standard creates steps for providers to follow in the security of patient information. The second and third standards, transactions and provider identification respectively help to ease authorization, billing and payment processes. The forth standard has to do with medical privacy.

In the past, a patient's confidentiality was protected by the use of a release of confidential information. This release allowed the patient to specifically decide whether or not their information could be shared with a third party. After April 14, 2003, health care providers are required to provide a "Notice of Privacy Practices". This notice outlines where your medical information may go and how it may be used. The notice lists all entities that may receive private information without the patient's consent or authorization. As a result, the Department of Health and Human Services, "the administrator of the rules, will have total access to medical records to monitor compliance."(1) Each provider has the responsibility to create their own version of the Notice using some required HIPAA language as well as language specific to State law. To comply with this regulation, I have a notice posted on this web site.

Insurance companies and regulators have always sought a system that would be cost effective. With the advent of managed care, a system evolved to address the growing demands for health care coverage. The resulting system has those who pay the bills- the insurance company- managing the level and continuity of your medical care. It has been a two decades since most care plans allowed the insured to seek out treatment from the provider of his or he own choosing. "Most managed care companies and agencies offer restricted mental health benefits. You can't just pick up the phone book and choose a doctor or counselor. And you can't get the coverage for all conditions. Getting what you need under managed care is rarely as simple as the ads for your care plan would have you believe (2). As a consumer of services, it is important for you to be fully aware of your plan's coverage. Read the benefits book carefully, ask questions, make sure you understand what services are available to you and what is required of you to access them. Most managed care models utilize two basic tools, utilization review and case management. Both of these tools require the therapist to get authorization or permission from your health plan before services are provided. The goal of authorization is to monitor the cost, necessity and the quality of your care. The issue of confidentiality is highlighted in this system. If you choose to utilize your health care benefits, your right to privacy is compromised. The insurance company requires some detailed information about the patient and the treatment in order to authorize additional sessions. This information may include your demographics, the problem you presented to the therapist, past treatment, any assessment or treatment progress, medication history, substance use or misuse, risk factors, including history of suicidal thoughts or attempts, homicidal impulses, child or elder abuse and domestic violence history.

There are several different types of insurance that cover therapeutic services. However, the length of therapy allowed and the kinds of diagnoses covered under individual insurance plans can vary. We recommend you contact your provider to discuss the current benefits of your policy. Listed below are several insurance options which do cover therapy.

Preferred Provider Organizations (PPO's)

PPO's are insurance plans that contract with networks of providers to supply services. Patients are offered lower cost-sharing to use providers on the "preferred" list but can use non-network providers at a higher out-of-pocket cost. Therapists are typically paid on a discounted fee-for-service basis.

Point-of-Service (POS)

POS plans are managed care plans that combine features of pre-paid (or capitated) and fee-for-service insurance. Patients can choose to use a network provider at the time of service. A significant co-payment typically accompanies use of non-network providers. Although few plans are purely of one type, an important difference between a PPO and a POS is that in a PPO plan, the patient may select any type of covered care from any in-network provider, while in a POS, use of in-network services must be approved by a primary care physician.

Carve-Out Managed Behavioral Health Care

In carve-out managed behavioral health care, segments of insurance risk-defined by service or disease-are isolated by overall insurance risk and covered in a separate contract between the payer (insurer or employer) and the carve-out vendor. Even with highly restrictive admission criteria, many HMO's have recently found it cost-effective to carve out mental health care for administration by a managed behavioral health company.

At least 60% of my clients utilize their health care benefits or their Employee Assistance Programs. The implementation of HIPAA has impacted the behavioral health front, each individual must make a choice to use their benefits or not. There have been times; a client has had a refusal of benefits. I have found that in addition to my advocacy for my client, it has been necessary for the client to contact the insurance company to advocate for themselves.

(1) Freeny, Michael; Psychotherapy Net worker March/April 2003 "No Hiding Place, Will Patient Privacy Become A Thing Of The Past"

(2) Preston, John, Varzos, Nicolette, Liebert, Douglas; Every Session Counts making the most of your brief therapy 1995, Impact Publishers, San Luis Obispo, Ca 93406

Some reasons not to use Managed Care

(Edited version of original text by Ivan Miller, Ph.D, The National Coalition of Mental Health Professionals and Consumers)

As the health care crisis rages, we realize the managed care system often does not give consumers what they want or need. Managed care's primary focus is on cutting costs and raising profits; its concerns about ethics and quality of care are often secondary.

Some reasons NOT to use Managed Care:

*  Privacy and confidentiality means sharing sensitive, personal information with a single, trusted professional chosen by the patient. Managed care usually requires sharing private information with several people who are not chosen by the patient, such as gatekeepers and utilization reviewers, and storing it in files accessible to hundreds of employees.

* Managed care sometimes claims to provide all mental health services when it offers only brief therapy -- a short-term treatment not effective for many concerns.

* A utilization reviewer's decisions may overrule the decision of the professional who is conducting the treatment. The reviewer's decision often is based upon limited information and/or a too-brief discussion of a case with the treating therapist.

* Medical ethical codes require that health professionals avoid and minimize conflicts of interest regarding their primary obligation to the patient's welfare. Managed care, on the other hand, does just the opposite. Professionals may avoid dealing with important long-term issues or cut therapy short because managed care prefers to refer new patients to therapists with a record of short-term (less expensive) treatment.

* Many Managed Care Companies still use what they call "managed care unfriendly" behavior ratings which perform much the same function as gag clauses. For example, if a therapist commits an "unfriendly behavior," it shows up as a low rating. The forbidden "unfriendly behavior" may include telling patients when they may benefit from a treatment not paid by the managed care company.  

* Managed care often fails to inform patients of treatment alternatives outside of the plan. This failure to inform serves the purposes of the managed care company because patients who do not know other treatment is possible, are more likely to report satisfaction with the managed care treatment. Unfortunately, this failure to inform also undermines the patients' control, because the patient loses the choice to self-pay for the preferred treatment.

* Medication is frequently presented as complete treatment. In fact, psychotherapy, either instead of or in combination with medication, is a better treatment than medications alone.

* Patients who are sent to psychotherapy are usually told that ultra brief therapy is the treatment of choice, and if they don't improve, they are told that there are no realistic alternatives. The reality is that long-term psychotherapy is a more effective treatment for many presenting problems. Many people find it so helpful that they will decide to self-pay for long-term, in-depth psychotherapy.