Diagnosable Madness: Insurer’s Discrimination against Mental Health Services

Posted on: August 21, 2007  |   Author: Sean
Filed Under: HMOs & Health Plans   |   Leave a Comment

Mental health disorders can be debilitating and life threatening, yet two thirds of the 44 million Americans with mental health disorders receive little or no treatment. (http://www.apahelpcenter.org/articles/article.php?id=157). According to a 2004 survey by the American Psychological Association (APA), Americans say that lack of insurance (87%) and cost (81%) are the leading factors that cause patients not to seek mental health services. (http://www.cms.hhs.gov/HealthInsReformforConsume/04_TheMental HealthParityAct.asp). The same survey shows that 85% of Americans believe that health insurance should cover mental health services. Yet as of today, mental health coverage is not mandated by any federal law.

In 1996, Congress addressed the discrimination in mental health coverage by passing the Mental Heath Parity Act (MHPA), which mandated insurance companies to treat coverage of mental and physical health disorders equally. Under the 1996 MHPA insurers had to make annual and lifetime benefit dollar caps equal for both mental and physical health services. (http://www.apahelpcenter.org/articles/article.php?id=26). Although the Act was an important first step, insurance companies found loopholes in the law and instituted other limits on mental health treatment. As explained by the APA, these limits included higher co-payments, separate deductibles, day and visit limits, and differing out-of-pocket caps. For example, today 87% of employers that comply with the law on equal dollar limits reduce their mental health coverage in other ways such as tightly limiting the number of therapy sessions per year.

Plans that do offer mental health services have also been notorious for limited coverage. They might cover problems like anxiety, depression and social phobias, but usually do not cover weight loss treatments or screenings for learning disabilities. Some plans even require referrals from primary care physicians before a patient can ever see a therapist.

Given these discriminatory practices in mental health coverage, numerous groups and individuals have been fighting for additional coverage. A survey by Mental Health America showed that 89% of Americans, including Democrats, Republicans, managers and employees, want to end discrimination against people with mental health needs. (http://www.nmha.org/index.cfm?objectid=2BCEA7D2-1372-4D20-C8A54A26522099D8). More specifically the survey stated that:

  • 96% of Americans think health insurance should cover mental health.
  • 89% of Americans believe that mental health treatments should be covered at the same level as treatments for general health problems.
  • 74% of Americans believe that insurance plans should cover substance abuse treatments at the same level as treatments for general health issues.
  • 89% of employees and employers want health insurance coverage for mental health treatments to be equitable to general health treatments.

These findings make it obvious that Americans want more mental health coverage, which could occur in the near future. This summer the Senate is expected to vote on the MHPA of 2007, S. 558, which closes the 1996 loopholes and expands mental health insurance coverage overall. (http://www.apahelpcenter.org/articles/article.php?id=157). The Act would set a uniform federal standard, ending insurance discrimination for mental health and substance use in all private employer health plans with more than 50 employees. The 2007 Act would also improve access to mental health treatments for such things as trauma victims suffering from post traumatic stress syndrome, teenage girls fighting anorexia or bulimia, new mothers struggling with post-partum depression, children suffering from attention-deficit hyperactivity disorder, and people struggling with alcohol and substance use problems. The bill currently has broad bipartisan support, and is also being promoted by businesses and insurance companies like Aetna and BlueCross BlueShield. Support from these companies and insurers is crucial because they are no longer antogonists to mental health coverage, which they have previously blamed for health care inflation and growing costs. (http://www.npr.org/templates/story/story.php?storyId=3871739).

If the 2007 Act proves successful, it will cover 82 million Americans in self-insured employee health plans who currently do not benefit from state parity laws. Most importantly, the 2007 Act will allow an estimated 113 million Americans to finally have health care plans that treat mental health disorders the same way as physical ailments - a result that many believe is long overdue.

FTC MedSouth Follow-up Letter and Clinical Integration: Selling a Product No One Wants to Buy?

Posted on: August 21, 2007  |   Author: Kristen
Filed Under: Antitrust   |   Leave a Comment

Clinical integration was first added to the U.S. Department of Justice’s and Federal Trade Commission’s Antitrust Health Care Guidelines in 1996. Still a relatively new concept, clinical integration occurs when provider networks collaborate with other provider participants in the provision of medical services to achieve cost efficiencies and quality improvements. Clinical integration is highly attractive to provider networks as a tool to use in collectively bargaining, as the activities of a “sufficiently integrated” network may escape per se scrutiny and instead be evaluated under the more forgiving antitrust rule of reason.

One benchmark in the evaluation of clinical integration provider networks was the FTC’s 2002 staff advisory opinion in MedSouth, Inc. At that time, although the FTC determined that MedSouth’s clinical integration program did not violate the antitrust prohibition on collective bargaining, the Advisory Opinion indicated that the FTC reserved the right to come back and monitor MedSouth’s activities in practice. The staff has now done so, and on June 18, 2007 issued a follow-up letter to MedSouth that indicated that the staff had no reason to rescind or modify the views it expressed in 2002.

Two areas that are highly scrutinized for anticompetitive effects in analyzing the competitive effects of a provider network under the rule of reason include the potential misuse of collected price information to facilitate unjustified and unlawful price agreements by the network participants when doing business outside the joint venture and the exercise of market power by the joint venture itself, due to its size or methods of doing business. In it’s follow-up letter, the FTC focused on the following aspects of MedSouth’s clinically integrated provider network: 1) integrative activities by the MedSouth physicians through MedSouth’s operations and programs; 2) the extent to which potential efficiencies had resulted from, and were continuing to be attained, as a result of that integration; and 3) aspects of MedSouth’s network structure and operation that were relevant to ascertaining its ability to exercise market power or otherwise adversely affect competition in the market.

In analyzing aspects of MedSouth’s network structure and ability to exercise market power in it’s Denver market, the FTC noted in its follow-up letter that the MedSouth program has had trouble gaining physician and provider support. MedSouth now has substantially fewer participating physicians than at its inception in both the primary care and specialty physician categories. At the time of the FTC’s 2002 letter, MedSouth had 415 participating physicians, 100 of whom were primary care physicians and 315 of whom were specialists. In response to the FTC’s 2007 follow-up inquiries, MedSouth reported only 280 total physician members- 75 primary care physicians and 205 specialists. While the FTC noted that these gaps could theoretically adversely affect the program’s ability to monitor and coordinate patients’ care, the staff was satisfied that these gaps would not have detrimental effects upon the program’s efficiency and quality improvement goals as most of its practice guidelines focused upon chronic conditions and diseases, which did not require the participation of specialists in the network.

However, although a program like MedSouth’s may operate with a limited number of participating physicians, the question remains whether a clinical integration provider network can achieve its goal of cost efficiency while doing so. In it’s follow up letter, the FTC noted that this reduction “may well be indicative that a program of clinical integration requires very serious commitment and effort by physicians to engage in the activities that are necessary to achieve the beneficial objectives of such a program, as well as physician’ weighing of the economic costs and benefits of participating in such a program. This may be instructive for other provider networks, particularly one involving large numbers of physicians, regarding the practical realities and potential difficulties inherent in coordinating and clinically integrating the care provided to numerous enrollees through a network comprising many independent physician practices.” Although not passing judgment on the merits of a clinical integration program, the FTC acknowledges that this type of program may be a difficult sell to physicians as a result of the enormous commitment.

The question remains: who’s buying into clinical integration and is it really a viable option for collective bargaining?

For a copy of the 2002 FTC Staff Advisory opinion, go to http://www.ftc.gov/bc/adops/medsouth.shtm. For a copy of the FTC’s follow-up letter, go to http://www.ftc.gov/bc/adops/070618medsouth.pdf.

Medicare to Decline Payment for Costs Associated With Preventable Medical Errors

Posted on: August 20, 2007  |   Author: Elizabeth
Filed Under: Medicare   |   Leave a Comment

Bush Administration officials announced earlier this week that under the Final Rules for Medicare Reimbursements for Fiscal Year 2008, Medicare will neither pay for the “extra costs of treating preventable errors, injuries and infections that occur in hospitals,” nor pay for the treatment of “‘serious preventable events’” (i.e. leaving a sponge or other object in a patient during surgery) any longer. (Pear, New York Times, 8/19; see also http://www.medicalnewstoday.com/articles/78643.php; http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=46979). Administration officials estimate that this policy shift will save the Medicare program approximately 20 million dollars annually. Some health care experts consider the Administration’s figure conservative and expect an even greater reduction in costs.

Under this initiative, which aims to reduce spiraling Medicare costs while simultaneously decreasing the incidence of iatrogenesis, some of the medical conditions considered “preventable errors” include bedsores, injuries caused by falls, and infections acquired during hospital visits. Although the move has been lauded as an important step toward resolving the pervasive problem of medical error and its associated costs, several legal and economic implications may emerge as a result of the policy’s implementation.

1. Who will actually pay for the costs associated with “preventable errors” if Medicare will not?

The Medicare program currently provides health insurance for individuals over 65 years of age, individuals under 65 years of age with certain disabilities, and individuals of any age with end-stage renal disease. (http://www.medicare.gov/Publications/Pubs/pdf/10050.pdf) Assuming that, due to financial constraints, Medicare is the only health coverage for a portion of those individuals, the additional costs associated with “preventable medical errors” that are no longer covered by Medicare could enter a veritable collection Twilight Zone. In the absence of a specific statutory mandate, should the victim of the error be responsible for paying for their own corrective medical expenses? What if they are “judgment proof?” Should they try to recoup these costs through malpractice litigation? This option does not seem particularly efficient, especially considering the population covered by Medicare and the additional strain that would be imposed on the judicial system. Should the institutions themselves absorb the costs? If the additional costs led to deficits at a government institution, for example, would the value of the deficit be rectified by Medicare funds, or would the debt be shuffled to another government agency?

Another consideration is whether the erring physicians would be individually responsible for covering the additional costs through malpractice insurance or another form of insurance coverage. This option would certainly lead to an increase in premium costs beyond the astronomical values already paid by some physicians.

2. Will an increase in pre-admission laboratory testing result in higher insurance premiums for patients? Will Medicare pay for this additional testing?

To determine whether a medical condition was preventable, or was acquired over the course of treatment (particularly in the case of hospital stays), more extensive pre-admission testing might be required to establish a patient’s baseline level of health prior to the alleged error. Will the patient be responsible for the costs of these additional tests? How will an increase in pre-admission or pre-treatment testing impact private health premiums? For those patients covered solely by Medicare, will Medicare pay for these tests? If so, how will these additional expenditures cut into Medicare’s projected savings figures? Is the Medicare program willing to pay additional sums for prevention versus correction?

3. Can physicians challenge a ruling of “preventable error”?

Assuming that officials within the Medicare program or some related entity is the final arbiter of what is or is not preventable error, does this policy shift effectively create a situation of strict liability for a physician or an institution if Medicare declines to cover a particular cost? More specifically, what overlap, if any, will exist between Medicare’s determination that a physician or institution committed preventable error, Medicare’s refusal to pay for the associated costs, and any subsequent litigation brought by the injured party? Will this policy encourage patients to pursue malpractice litigation by effectively providing a stamp of approval suggesting that the patient has a colorable claim? Will courts interpret a Medicare determination that preventable error was committed as prima facie evidence of negligence in medical malpractice civil actions? Will physicians or institutions be able to appeal a determination of preventable error?

As Medicare’s new policy is implemented more issues are likely to emerge. The actual savings generated by this initiative will be interesting to note.

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