First a brief quiz:

1. Ethical practice in a managed care setting is:

1. Impossible.
2. Possible with forethought and planning.
3. A nice goal, but too much work.
4. What’s managed care?

2. Which of the following are compatible?

1. Managed care.
2. Psychotherapy.
3. Ethical practice.
4. Psychological testing.
5. All of the above.

3. Who should read this brief article?

1. Those who anticipate confronting ethical dilemmas.
2. Those who don’t think they’ll confront ethical dilemmas.
3. Those who can’t avoid all ethical dilemmas.
4. What’s an ethical dilemma?

Much has been written in recent years about managed care and its effects on consumers and practitioners alike. Most psychologists have experienced working in a managed care environment in some capacity. While some are able to have fee-for-service practices or work in area outside the realm of managed care, many psychologists deal with the managed care system on an ongoing basis. Rather than argue the merits of managed care or its apparent evils, this brief article provides a check list for practitioners functioning in the managed care environment to assist them in ethical practice. Numerous dilemmas exist that challenge and confront the unwary practitioner. This check list attempts to highlight the most significant ones and to make recommendations for addressing them.

As far as the answers to the quiz…this article will suggest ways of practicing ethically within the realm of managed care (#1 is b), how to provide the services we believe are clinically indicated despite potentially differing views held by utilization review personnel (#2 is e), and as will hopefully become very clear, this article is for all those who interact with managed care companies whether we plan to confront ethical dilemmas or not (#3 is a, b, & c).

Informed Consent

Each patient or client has the right to know in advance what is reasonable to expect from the professional relationship. Typically, this includes issues such as fees, payment expectations, scheduling, treatment options and their relative risks and benefits, the right to withdraw at any time, confidentiality and its limits, how to reach the practitioner between appointments, any limitations on the professional relationship that might reasonable be anticipated, and related issues. In addition, consent must be voluntary, individuals must be competent to give consent, and we must ensure their understanding of the consent agreement (Pope, 1991). Merely having signed one of a large stack of documents when signing up for insurance coverage does not meet these requirements. We must specifically ensure that each patient understands the issues described above as well as the potential impact of utilization review, the extent of information to be shared with reviewers, limits to coverage, and related managed care issues.

When addressed appropriately the informed consent agreement can help treatment to proceed more smoothly as well as to protect both our patients’ and our own best interests. For more information on this important issue as well as sample informed consent documents click here. ®

Confidentiality and its Limits

Many prospective clients or patients anticipate that everything they discuss with a psychologist will be kept confidential (Miller & Thelen, 1986). Unfortunately, in even the best of situations this is not true. We must be sure that patients understand the limits to confidentiality that exist before they disclose anything. This is especially important when working under managed care constraints. While we may be able to control the information we are safeguarding, we have no control over the information shared with utilization reviewers who are not bound by our profession’s code of ethics. Some have been quite shocked to learn how freely managed care companies pass on confidential information to others. It is important to be sure patients understand the limits to confidentiality that exist in general, and specifically with regard to work involving managed care. Keith-Spiegel and Koocher (1985) recommend the use of an informed consent procedure that specifically addresses these issues:

If you choose to use your coverage, I shall have to file a form with the company telling them when our appointments were and what services I performed (i.e., psychotherapy, consultation, or evaluation). I will also have to formulate a diagnosis and advise the company of that. The company claims to keep this information confidential, although I have no control over the information once it leaves my office. If you have questions about this you may wish to check with the company providing the coverage. You may certainly choose to pay for my services out-of-pocket and avoid the use of insurance altogether, if you wish. (p. 76)

Conflicts of Interest and Multiple Relationships

Practitioners should maintain an awareness of any potential conflicts of interest present that might impact on their objectivity and judgement. For example, the financial arrangements of capitation and case rate may create such a conflict of interest. With capitation one agrees contractually to provide all needed mental health services for a specific population for a fee agreed upon in advance. With case rate one agrees to treat a specific patient with a specific disorder for an agreed upon price. In both situations, the briefer the treatment, the more the practitioner earns. In these situations we run the risk of our clinical judgement being influenced by fiscal pressures and concerns. An additional troubling situation arises with those managed care companies that engage in provider profiling. They keep data on each practitioner’s treatment patterns and share that information with practitioners. Those whose treatments are significantly longer than their peers’ risk being removed from the provider panel. Again, practitioners may feel a not too subtle pressure to limit patients’ treatment regardless of their clinical needs. Sensitivity to these pressures is important and all practitioners should strive to keep their influence to a minimum.

Utilization Review

To protect each patient’s privacy it is important that only the minimum information necessary be shared with utilization review personnel. Typically, this standard is called medical necessity. Practitioners should learn each managed care company’s utilization review standards and only provide the minimal amount of information needed for utilization review decisions to be made (O’Neill, 1998). In our efforts to obtain authorization from reviewers we may be tempted to share more than the minimum amount of information required.

Practitioners must also ensure accuracy in reports to utilization reviewers. We may at times also be tempted to overstate patients’ pathology in our efforts to obtain authorization. This may result in serious consequences for the practitioner and patient alike. Accuracy and objectivity are strongly recommended. To provide an intentionally inaccurate GAF score or erroneous diagnosis is both a violation of ethics and law.

Thorough and relevant documentation are also recommended. But, only information directly relevant to the patient’s treatment should be included in the documentation. At times copies of treatment records are required in conjunction with the utilization review process. Thoroughness is needed to support the treatment recommendations made and to justify the treatment given. At the same time, including only the minimum information necessary is important since we can’t control who has access to the records after they leave our control.

Competence

As has been pointed out, managed care companies generally desire treatment to be provided in the shortest amount of time possible. Practitioners should understand any such requirements when they sign managed care contracts. If we are not comfortable with providing brief treatments and are not competent in their use, such contracts should not be entered into. Such contracts may also require us to accept all referrals from the managed care company or to provide group treatment as the primary treatment modality. Those engaging in managed care practice should first obtain the necessary training so that they will be able to engage in ethical practice.

Termination and Abandonment

Even if we know of the existing limits of our patients’ coverage before we begin providing treatment and ensure they understand this, difficulties may still arise. Utilization review personnel may deny authorization and we may then feel the need to abruptly terminate a patient’s treatment. The utilization review process only authorizes reimbursement of services, not the provision of the services. If authorization is denied we should immediately appeal the denial and then if possible, challenge it through administrative agencies such as external grievance offices that exist in some states. Case law demonstrates that failure to appeal utilization review denials leaves the practitioner liable if harm occurs (eg. Wickline v. State of California, 1987). Treatment should be provided during any appeal process and patients should not be abandoned. While we are not required to treat all patients indefinitely regardless of their ability to pay, we should not terminate a patient’s treatment solely because of a utilization review denial. Referrals can be made, payment plans or a sliding scale may be used, or pro bono services can be provided for a short time. But, we should never terminate patients when they are in crisis (Gutheil & Appelbaum, 1982).

Contracts

Practitioners should exercise caution when joining managed care panels. While we are well educated and intelligent individuals, most psychologists are not attorneys and do not have the necessary training to review a contractual agreement. When reviewing a managed care contract’s clauses, requirements, stipulations, and responsibilities we may think we understand what we are reading. Costly and painful lessons learned by some indicate that no contracts should be signed unless first reviewed by one’s own attorney. It is also important to note that one does not have to agree to everything in a proposed contract. Changes may possibly be negotiated prior to signing it. But, be sure what you are agreeing to; contracts bring with them legal requirements and liabilities. For example, a contract may require you to be accessible to patients 24 hours each day, to meet with patients within 48 hours of them making initial contact with you, and seeing emergency appointments within two hours. Contracts with clauses such as these should not be signed unless you are confident you are able to comply with them.

References

Gutheil, T. & Appelbaum, P. (1982). Clinical Handbook of Psychiatry and the Law. New York: McGraw-Hill.

Keith-Spiegel, P.& Koocher, G. P. (1985). Ethics in Psychology. New York: Random House.

Miller, D. J. & Thelen, M. H. (1986). Knowledge and beliefs about confidentiality in psychotherapy. Professional Psychology: Research and Practice, 17, 15-19.

O’Neill, G.W. (1998). Confidentiality in the age of managed care: From the MCO perspective. The Clinical Psychologist, 51, 34-35.

Pope, K. S. (1991). Informed consent: Clinical and legal considerations. The Independent Practitioner, 11, 36-41.

Wickline v. State of California, 192 Cal. App. 3d 1630 (1986).