Ending Insurance Companies Control of Mental Health Care

 

My retirement from psychiatry has allowed independence from fears that caused temperance in my opinions about issues, which all along deserved a passionate campaign for change. This is an article about the stranglehold that insurance companies have had on health care, particularly mental health care, for more than 20 years. It’s been ten years since I have practiced so perhaps there has been a change for the better (or most probably for the worse)

First a description of what can only be described as atrocities that I personally witnessed.

I got a call from a social worker at Danbury Hospital in Connecticut. The following day they were discharging a female patient, a second grade teacher from New Milford with three children. The social worker begged me to see her the day she was discharged. I agreed to do so. The patient appeared in my waiting room as scheduled. The only problem was that she was so afraid of me that she would not come into my office. To no avail I tried everything I could think of to convince her that she would be safe. Only when my next patient appeared in the waiting room did she agree to enter my office. There were only 5 minutes left in her session, but in that time she told me that she had ruined her life, and all was hopeless. As best I could, I tried to reassure her, but it was obvious that nothing I said was having an impact. We made an appointment for the next day, which she did not keep. I called. Her husband answered. She had blown her brains out the evening before.

This was early on in the HMO era when I didn’t immediately understand the desperation in the social worker’s voice. She clearly knew that the decision to discharge this patient was completely insane.

I was called to the New Milford Hospital ER to see a young woman, holding a baby, who was experiencing her first psychotic break. She was convinced that a spying device had been put in her baby’s vagina. She kept checking her baby’s vagina hoping to find it. Oxford (an insurance company in the Northeast) would not approve hospitalization. They said she was not a danger to herself or others. They wanted her treated at Danbury’s Day Hospital. At the time there was no public transportation between New Milford and Danbury, but even if there was, this woman was not sane enough to commute there every day. I insisted on speaking to a supervisor at Oxford, then to his supervisor. They wouldn’t budge in their decision. The next day I was summoned by administration in New Milford Hospital. Oxford had called them to complain about my rudeness. I confess that I was guilty as charged. As Chief of Psychiatry there I was expected to set an example. This incident also happened early in the HMO era, a time when hospitals were worried about remaining in the insurance company’s network. Early on doctors were also worried about being labeled as a provider who gave unnecessary care. Certain insurance companies let it be known that they were keeping tabs.

I was seeing a woman in her 40’s for psychotherapy who had a double mastectomy for breast cancer. The gods were not favoring her. She had also had a heart attack. Her grown son was drinking too much and her daughter had had an affair, which led to the end of her daughter’s marriage. This woman’s husband was tired of listening to his wife’s troubles. After 10 sessions her insurance company, PHS, decided she had enough psychotherapy. I went through their chain of command appealing the decision. Finally I got to talk to the head of their psychiatric division, Dr. Robert Dailey from Bridgeport Hospital. He told me this woman did not need psychotherapy. She needed hospice. Astonished, I argued that she was not a terminal patient. She was still working and struggling to keep her family afloat. He would hear nothing of it. Case closed.

The situations cited above came from my direct experience. I could describe ten others.   Most psychiatrists have similar stories to tell. Indeed, this article was originally prepared for Psychiatric Times. They felt it was unsuitable because it was old news. As one reviewer put it “everyone has their own horror stories no different than these.” All across America, when it started, it was if a plague had descended on the field of psychiatry. Except this plague had been paid for by our patients, or else it was a benefit bestowed by their employers.

Mistreatment was not confined to mental health care. Patients unfortunate enough to have M.S., or those who had had a stroke, were learning that after initial treatments, they could no longer have physical therapy, the one way they could do battle with the calamity that had befallen them.

Dr. Linda Peeno was the medical director at three different insurance companies, including, Humana. When she came to the conclusion that the first company was unethical she moved on to the next and finally the third before concluding the problem was industry wide. Her conscience was bothering her. She felt directly responsible for the death of several people. This is not why she went into medicine. Although she liked the hours provided by a job at an insurance company, she could not continue. The opposite. She felt she had to reveal to the public what was happening. With a secure job as an professor of ethics at a local university taking on the insurance companies became her life’s work. She has written extensively and well about the problems she observed. Writing for U.S News and World Report in 2002 she described a typical scenario at her job:

“The staff of our medical department had attached questions as the letter passed through its maze to me, the HMO doctor at the end of the decision-making line. If something has to do with medical necessity, I am the final word. Our nurses could make denials if something was a benefit decision. Cosmetic surgery, for example, would be excluded in the certificate of coverage. The number of notes on the letter signals that this request falls in the gray area between outright necessity and clear-cut exclusion–the danger zone for the patient.

The decision is now mine, and I feel the pressure to find a way to say no. If I cannot pronounce it medically unnecessary, then I have to find a different way to interpret our medical guidelines or the contract language in order to deny the request.

A bright-blue square catches my attention. It is from a particularly cost-conscious staffer and contains a handwritten warning to me: “Approve this, and it will be your last!” It is common practice to use removable stickies. After we have finished passing any document around, we can remove all the comments. Official records will reflect only the final decisions and not the process by which we made them.”

From that same article:

“A doctor had called to tell me that his patient was almost 80, lived alone, and could not handle the preparations he would need to make for bowel surgery. Besides, we had already told the doctor that the surgery would have to be done in a hospital over 60 miles away from the man’s home. There was one in his town but they weren’t affiliated with the company. The local hospital had not yet learned to buckle under.

Without the pre-op admission the night before surgery, this frail man would have to drive himself to the hospital almost in the middle of the night, after hours of laxatives and withholding of fluids. When I approved the request, I got a call from my physician supervisor, angrily telling me that we did not pay for creature comforts. I told him I had already done it, but in the future…”

Linda Peeno testified before a Congressional subcommittee on Health and the Environment on May 30, 1996. Her testimony, and many thought provoking articles by her, can be found on the internet. Showtime produced a film Damaged Care that tells her story. She had accomplished a lot. Except about what mattered. Despite her Congressional testimony, her well placed articles, and the Showtime movie, very little changed.

In 2001 I read an article in the Wall Street Journal about a lawsuit against an insurance company written in what I thought was a disparaging tone. I understood the sentiment behind the reporter’s attitude. Lawsuits have gotten out of hand. There are far too many of them that are built on lies and exaggerations. In our litigious society, small mistakes, which we all can make, can be exaggerated into a million dollar payoff. The result? Enormous energies directed to covering your ass, which means the multiplication of professionals adept at that noble aspiration. Lawyers and their enforcing bureaucrats get to tell workers what they can and cannot do, which means programed rigidity from the top, the last thing needed in a service based economy.

The suit that the reporter was dissing was not frivolous. I knew the person who was suing. He had lost his 16 year-old son because his insurance company determined that his son must leave Danbury Hospital. It was clear to his father and everyone that knew the boy, that he was  in grave danger and could not be discharged until his condition improved. The boy’s suicide attempt was for real. It was sheer luck that the pipe he put his rope over broke. My patient knew his son still wanted to die and if let out of the hospital he would finish the job. He reasoned with the doctor, he pleaded with him.  He begged.

I called the reporter Milo Geyelin and we spoke for 3 ½ hours. I gave him the details of how what had happened in this case was happening everywhere. Necessary care was being rejected as unnecessary. Several months later he called me. He had written, the lead story in the Wall Street Journal of May 8^th 2001. a story about HMO’s control of mental health. That story was particularly focused on Magellan,  the largest mental health managed care company. It was gobbling up all its competitors, particularly less profitable, but more ethical HMOs.  By the journalistic standards of the day Geyelin’s duty was to be “balanced”.  He allowed Magellan to respond. The gist of their defense was mistakes happen, but they were being corrected.

I thought the article allowed Magellan to come across as sincere, as trying their best. From direct experience I knew they were not trying their best, anything but, when it came to siding with their patient’s best interests.  They perceived those who had become seriously ill as a plague on the company, understandable from the insurance companies point of view.   But from the patient’s point of view, insurance companies were a curse, one that had to be combatted along with the illness.

His story didn’t stop there. Magellan sold contracts to large insurance companies (as a mental health carve out, a company that specializes in managing psychiatric care). They contracted to produce providers that would take care of any insured patient in need of care.

They didn’t deliver what they had promised.  In many parts of the country they had no providers available at all. Many on their list of psychiatrists had once been providers but they had long ago given up on Magellan after submitted insurance claim forms were repeatedly “lost.” It required a lot of energy to get paid, and it just wasn’t worth it.

Magellan had their patients in a no lose situation for them. They allowed their patients to only see providers in their network and there were practically no providers available.  That didn’t bother them at all.  Moreover, if, by luck, a patient found a provider, treatment had to wait until the insurance company approved of it. This could take weeks. And too frequently there was no reply at all. They accused the provider of not sending in their form, (usually a lie) or they accused the doctor of filling the form out incorrectly. Probably true given the confusing directions and triviality of the form.

I can attest that it was impossible to reach the insurance company to try to straighten things out. Not only did they choreograph a long musical, “your call is important to us” wait, if you did get through, the people handling the calls were minimum wagers with no authority , little intelligence, and zero energy to climb the mountain of rules, the operational chaos that awaited them should they choose to truly help the caller with his problem.  They were trained to deal with forms. They knew their list of approved symptoms, as designated by DSM IV.  Anything that didn’t fit on that form was like Chinese to them.

It should be noted that, the form had very little room for the doctor to individualize his case, explain things as he saw it. It didn’t really matter. If he were to try, he would be passed right over.  There wouldn’t be a call back even if he had made his case. Clerks have very little tolerance for outliers.

Essentially the process was a scam. Totally legal but a scam nonetheless.  Entirely within the law  medical care was being shaped by purveyors with criminal motives and intent. Patients, who had lost it, forced to finally acknowledge that they needed help, were out of luck if they tried to get that help. They had to meet criteria that were sacrosanct, prepared by experts, hired for the purpose of making sure their patients didn’t cash in on their policies

The amazing part of the story is how Magellan had come out of nowhere, and overnight they were everywhere. It was formed out of the ruins of a failing company Charter Behavioral Health systems. At their height they were a Wall Street darling, a chain of 90 psychiatric hospitals from which they were making industrial profits. In the end Charter was investigated by the Justice Department for Medicare Fraud.  As they closed up shop, selling off their hospitals provided the capital to allow them to quickly become a huge player in managed care.

The irony is striking. One of the very companies that had, on a massive scale, overcharged for care, billed for care never given, with very little difficulty became in charge of what care would be allowed or disallowed. Businessmen to the core, they stuck to first principles. They followed where the money had gone. The denial of care business was now more profitable than the delivery of care. Of all people, they were now deciding what was, and what was not, “necessary” care. The fox was  guarding the chicken house. Every dollar they saved by denying care was money that went into  their pockets..

Managed care companies do not compete in the quality of work they deliver.  The only thing that matters is numbers. Particularly in the 90’s CEO’s were moving from rubber companies to cupcake bakers, to oil drilling companies, with little knowledge needed about the products of the companies they were leading.   As long as every quarter they could deliver the right numbers,  their job security was golden. Magellan was confident that the money they made from selling off the hospital chain would be multiplied by their new business. The sale of ninety hospitals leaves you with a lot of capital, the muscle required to buy up  competitors.

Numbers can also work against managed care companies. For example, an audit of American Biodyne which contracted for 14 million dollars to provide mental health services for Ohio state employees for 2 years found that the firm had actually spent $2.1 million on treatment claims in 1991 and $2.6 million in 1992. The rest of the $14 million went to American Biodyne.

The need to keep medical costs down was the original impetus for HMOs.  This is a real issue. America’s 3 trillion dollar health care costs were, and still are, wildly out of control.   We spend far more than any other country and the results are far from obvious. There is waste and unnecessary procedures anywhere you look.

The problem I am addressing is the decision to put for profit HMOs in charge of cutting costs. Taking care away from ill patients and putting these savings in to the pockets of an HMO amounted to legally stealing care from those least able to defend themselves. It was breathtaking in its audacity.

The head of Oxford, a relatively small company, was paid 28 million dollars a year, the majority of it pinched from sick patients. US Healthcare’s CEO, a former pharmacist, earned 900 million dollars when he sold his cost cutting company to Aetna. His daughter and other family members also got millions not to mention the 25 million dollar jet Aetna gave to him. Inside Edition featured him in an expose on the lifestyles of wealthy HMO executives.

US Health Care executives were put in charge of the company. Changing their name back to Aetna was easy. It took years for Aetna to extricate themselves from the chaos US Health Care had wrought

The Wall Street Journal in 2006 ran an expose, “Health Care Gold Mines.” It was reported that William McGuire, CEO of one of the larger health insurance companies, United Health Care, had unrealized gains on stock options worth 1.8 billion dollars. He had been given the right to “time” his stock option grants. His timing was so extraordinary that questions have been raised that he backdated his purchases. His associates call him “brilliant.” Very brilliant. The Wall Street Journal’s analysts concluded that if the options were granted to him blindly, the chance of his guessing as well as he did, was 1 in 200 million.

Not only have congressional committees long ago had the unscrupulous practices of insurance practices revealed to them.   Newspaper and national magazines have made reports about it, again and again in exposes. Yet the issue has no legs. Nothing changes.

Frankly, at first glance, the quiet on this issue is a mystery. Politicians, and columnists have so often carried on about abortion rights, or gay marriage, or some other higher cause that these issue have become de rigueur in the politically correct playbook. Yet neither abortion nor gay marriage materially affects a great many people’s lives. Health insurance practices do. Why is there silence from media pundits and politicians who love any exposure they can get?The strange thing is that what’s going on in the health insurance industry is no Enron. It isn’t a secret. If not personally abused, most people know people who have gotten screwed by their health insurance company. They have heard stories from colleagues or family members, anguished stories if the illness has been severe. People have come to expect that somehow they will be done in by the small print in their policies.

The absence of a public outcry, the failure of news stories and Congressional hearings to halt the HMOs was one of the reasons I wrote a  novel After Lisa. I had written articles for years with suggestions about how I thought psychiatric care could be improved.  This was, I felt, the most important way my writing could make a difference.  If enough of the public could identify with the Russells, the protagonists in my story, there might be a possibility of change.  After Lisa is based on the story of the case I contacted the Wall Street Journal reporter about. I was seeing a father who had lost his 12 year-old daughter to cancer. His 16 year-old son tried to hang himself. He was hospitalized at Danbury Hospital.

From day one they had started discharge planning. In those days insurance companies had a little trick they pulled. They pressured doctors to get their patient to “contract for safety,” have the patient put in writing a promise that they would not commit suicide. Once this was signed out the patient would go.

AS I noted this boy’s father was convinced his son’s attempt was completely serious. He was desperate.  One of his friends, a social welfare worker said to legally abandon his son. That way they couldn’t discharge him. The hospital answered that his son would be sent to a shelter. I will cut to the chase. The day he was discharged his son successfully hung himself. With two children gone my patient’s opening words to me, when I first met him, was “I am a dead man.”

My hope was, and still is, that my novel, or better, a movie based on the story, might translate the issues enough to arouse the public. When I started I thought discussing the  book on Oprah would bring forth thousands of people with their own story to tell. But, my fear is that even if the best result occurred, with the long history of public exposure about this issue, it too will have no effect.

December 14, 2014 60 Minutes ran a story Denied. It was well done, detailing what other stories like it have done, dead patients the result of insurance company indifference. Has the  60 Minute expose had an  impact? It’s been three months.  The usual silence on this issue continues.  There is no reason to think it will be different than all of the exposes that preceded it.

There is one angle that could have an enormous impact.  What was not covered by their story, or the others documenting insurance company malfeasance, is the fact that insurance companies have no fear of making bad calls (e.g forcing a patient out of the hospital who soon after kills himself).  The embarrassment is minimal (no news story) and the legal consequence nil. The parents and spouses of those who have lost a love one cannot sue an insurance company.   Federal ERISA law forbids it.

This issue has a history. In June of 2001 (see June 21^st 2001 Congressional record) the Senate debated and passed the McCain Kennedy Bill, a health care “bill of rights,” that would have allowed lawsuits against HMOs. The vote was 59-36. Changes were made on this bill in the House and then the bill mysteriously disappeared from the political landscape!

Subsequently, several states passed legislation allowing suits against insurance companies. But, on June 23, 2004, the United States Supreme Court unanimously decided that while congress could pass legislation allowing lawsuits against health insurance companies by injured family members, states could not do so.   There are suggestions that the unusual 9-0 vote was an indication that this issue was too important, the pressure was too great for the justices to allow controversy.

Nevertheless, the success of insurance company lobbying to not only defeat this bill, but successfully end all discussion of lawsuits is a mystery that I do not fully understand. After all, the media and politicians have vigorously gone after other powerful industries, Banks, Wall Street and Oil companies. Despite their power they have not been as successful at keeping a lid on their controversies.

Because 60 Minutes has not responded to my repeated attempts to reach them about the ERISA law, I am including the phone number of the executive director, Kevin Tedesco, 212-975-2329 in the hope that one of the readers of this article will have better luck. Or perhaps call volume will have an impact. If this were to happen, if 60 Minutes were to take up the issue of the ERISA law’s prohibition of law suits, and if this led to the law being changed, so that insurance companies had to live in fear of being sued, it would change mental health care for generations to come.

But I am not sanguine about the prospects. The issues are in fact complex.  Ultimately the real issue, the debate that has to take place is how we, as a nation, are going to restrict health care to keep costs under control. Managed care companies have been hired to do the dirty work. They are not simply dirty. They are filthy. Powerful forces are lined up to keep things as they are. For instance, when the the Erisa Law was up for discussion in Congress the U.S. Chamber of Commerce  lobbied along with other powerful groups   to not allow the ERISA law to be changed. I assume they are still working hard to keep this issue submerged.

When the Democrats stuck their nose into regulating health care, so health care costs could be reduced, the Republicans rightly identified the “Death Panels” they were looking to set up. The Republican solution was HSAs, high deductible medical plans. This has been partially adopted in ObamaCare. Faced with  four or five thousand dollar deductibles smart middle class shoppers have delayed seeing their doctors and their expensive procedures.

But ultimately we have to bring  the issue front and center. What should and should not be covered?   HMOs have been a disgusting solution. We can do better.