National Coalition of Mental Health Professionals and Consumers, Inc.

an educational foundation and advocacy organization serving mental health consumers and professionals

  Mental Health Consumer Protection Manual

A guide to solving problems with
insurance and managed care

Mental Health Consumer Protection Manual:

A guide to solving problems with insurance and managed care

Table of Contents

Editor's Introduction  

Section I

How do I know if I have managed care?
Specific managed care cost-cutting methods

Questions to ask the managed care company

Talk with your therapist

Consumers have a right to appeal
Who is involved in an appeal?
Should the professional or the patient conduct the appeal?
Special issues regarding professional assistance in the appeal process

How do companies evaluate treatment denials and appeals?
Elements of a strategy for winning your appeal
The steps to making an appeal

The state insurance commissioner
Self-insured or ERISA insurance programs
Health Insurance Portability and Accountability Act of 1996 (HIPAA)
Mental Health Parity Act of 1996
Eight common problems - You are not alone

Managed care encourages negative information about patients
Medical records are permanent
Who has access to private information?
Will managed care companies divulge confidential information to employers?
Isn't patient consent required to release records?
What happens to pharmacy records?
Privacy is often not respected
How can consumers protect their privacy?

Indicators of a good policy
Marketing promotions that should be ignored in evaluating a company
Indicators of a poor policy
Are some companies better than others?

Does it help to choose a different professional within the same managed care system?
A good protection is a second opinion
What about choosing a professional outside of your managed care company?
What about the professional who recommends treatment that is longer than necessary?
What about serious problems with professionals?

Section II

Insurance commissioner
Legislature
Governor and Congress
Ombudsman service
Licensing Boards
Professional ethics committees
Media

Who is the right attorney?
When should consumers consider a lawsuit?
What should a consumer do to prepare for a lawsuit?
How will managed care defend itself?
Information for attorneys about managed care medical liability and ERISA lawsuits

Editor's Conclusion

Editor's Introduction

Mental health problems are so common that one third of Americans will suffer from a mental health condition in their lifetime (American Journal of Psychiatry, 1992). However, in spite of the need for mental health services, mental health has been a primary target for managed-health-care cost cutting. Even though health insurance has historically restricted and underfunded mental health services, since 1988 managed care has further reduced mental health coverage by eliminating 54% of insurance-based mental health funding (Hay Group, 1998). This cut in mental health funds is seven times as severe as the managed care cut in overall health care spending. Making matters worse, independent audits of managed mental health care companies show that over 50% of mental health funds are now consumed by the administration and profit expenses created by managed care companies (Wrich, 1997). As a result of these excessive funding cuts, mental health consumers commonly encounter problems with their managed mental health care services.

We have written this Manual to offer consumers and consumer advocates the information they need in order to obtain the best managed mental health care benefits to which they are entitled and to solve problems with insurance and managed care. Armed with this information, consumers have several choices about how to deal with managed mental health care. Many consumers decide that they must pay out-of-pocket in order to receive quality and/or confidential treatment. Other times, consumers cannot afford to pay out-of-pocket and try to make their managed mental health treatment as productive as possible. Often the strategies in the Manual will solve the major problems that arise with managed care. However, even when the problem cannot be solved for an individual patient, by following the suggestions in the manual, assertive consumers can choose to help change the system so that it works better for others in the future.

We wish that we could have written a manual telling consumers that by understanding their managed mental health insurance, they could be assured of quality treatment. Unfortunately, this is not true and most managed mental health has been compromised to some degree. Even though most professionals and managed care employees strive to provide the best quality care, our experience is that even when employees of managed care are well intentioned, company rules often do not allow for quality mental health services. In this manual, we are blunt about the negative effects of managed care because we believe that consumers will be best prepared if they are well informed about the numerous problems of managed care.

The impact of managed care does not affect each consumer equally. Even before managed care, there was a saying that the difficult or troublesome patient lives longer. Busy professionals are more likely to overlook the patient who is cooperative and routine, and focus more time and energy on the patient who is difficult. As a result of the extra effort, these difficult or troublesome patients receive better care and live longer. Under managed care, there are even greater time pressures and financial incentives that encourage taking short-cuts with patients. These pressures can lead to neglecting the non-assertive patient who is being rushed through the system. The system still devotes more resources to patients who are either assertive or difficult enough to cause time-consuming problems if they are ignored. Although being assertive and questioning is uncomfortable for most patients, in today's world of managed care, the truth is that the assertive patient will receive better health care.

We strongly encourage consumers to use advocates and to obtain second opinions. People who seek mental health services are often under stress and may not be able to use their best judgment. This stressful time is a good time for an advocate - a friend, relative, or professional - to help out. Likewise, second opinions can be very helpful. Poor quality treatment in managed mental health care is often cloaked in professional jargon and rationalizations. A second opinion from a professional who is working for only the consumer, not the HMO or insurance company, is the best way to cut through professional jargon and rationalizations.

We regret that this manual must focus on the negative aspects of mental health care. Quality mental health services can benefit many people. Mental health services can help patients overcome or control many illnesses, be more productive, solve relationship problems, achieve higher levels of physical health, and deal with difficult life situations. Most mental health professionals are highly dedicated and care very much about providing the best possible services. We hope that our frank discussion of problems with managed mental health care does not discourage patients from finding and using mental health services. On the contrary, our goal is to help consumers obtain the benefits of quality treatment.

We plan to continuously revise this manual to make it as useful as possible and invite suggestions for improving the manual. We encourage consumers, consumer advocates and professionals to send anecdotes, information, your stories of problems with managed care, how you solved problems, and how this Manual was useful to you. We will keep your information confidential. If people suffer in silence and are quiet about how they have been mistreated, the problems in the managed care system will continue. It is only when people come forward and report the problems in managed mental health care that we can use these collected reports to build a better mental health care system.

Ivan J. Miller, Ph.D., Executive Director
National Coalition of Mental Health Professionals and Consumers, Inc.

Top of Page

Many in the managed care industry have developed and used the following incorrect rationales for denying mental health services. These rationales may sound reasonable and convincing, but when analyzed, they are not correct and do not fairly justify the denials of treatment services. Consumers who are forewarned about these rationales are better prepared to advocate for themselves.

1. "You should have read your policy and manual more carefully to see the reasons that treatment can be denied."
As a rule, manuals and policies are not only difficult for consumers to understand, but often don't contain the relevant information. Even experts cannot get adequate information to compare the mental health benefits of companies. Insurance and managed care companies should not be allowed to use legalistic policies to get away with misleading advertising. Consumers can argue that if the advertising implies comprehensive treatment, then the managed care company should provide comprehensive treatment.

2. "Treatment is time limited because people get better faster when they know how many sessions they have."
Managed care has subscribed to the belief that time limits make patients improve faster. Research shows that this is not true. Good therapy is a combination of hard work and taking time to look at oneself carefully. Time limits are a way to keep therapy short. Generally, therapy should last until patients accomplish their goals.

3. "Most of the possible change occurs in the first few sessions and, therefore, extended therapy is not helpful."
In the first few sessions, simple problems are solved and much relief occurs. The same thing happens in physical medicine, most patients get over their illnesses with one visit to the doctor. However, when problems are long standing, when a person has trouble with many relationships or issues, or when problems are severe, longer treatment is usually more helpful than brief therapy.

4. "Patients who are motivated will get over their problems in just a few sessions."
A common managed care technique is to tell patients that their progress in brief therapy depends on their motivation and how hard they work. As a result, when therapy is ended, patients often feel that it is their own fault if they have not overcome their problems. In reality, most patients are highly motivated to become healthy. There are many legitimate reasons why psychotherapy or healing may take time. Good therapists understand this and allow the process and stages of therapy to unfold as quickly as they can. It should always be kept in mind that big problems and major changes take time.

5. "If a patient cannot prove steady progress, treatment should be stopped."
Many managed care companies require that mental health patients prove that they are getting better by showing steady progress in a way that is behavioral, measurable and observable. This is a method for discouraging psychotherapy because most mental health problems result from what goes on in a person's mind, and peoples' minds are not behavioral, measurable, or observable. Some patients spend months thinking about problems, trying out new ideas, learning how they work inside, and exploring their emotions before they can make big changes. Patients and their mental health professionals are in the right position to decide if there is adequate progress, and they should not have to prove this with observable behavior.

6. "If a patient cannot be cured, therapy does not make sense."
Surprisingly, managed care companies often recommend telling patients that there is no cure for mental health problems so the patient has to accept living with the problem. While it is true that there are health problems that cannot be cured, frequently the purpose of treatment is to control or lessen the negative effects. The same is true for physical illnesses: while diabetes cannot be cured, it can be controlled, and while many types of heart disease cannot be cured, rehabilitation can improve a patient's functioning and quality of life. The lack of a complete cure is no reason to withhold the treatments that will improve a patient's condition.

7. "The purpose therapy is to restore a person to the usual level functioning."
This is an absurd statement that actually means that chronic problems are not treated because the chronic problem is part of a person's usual level of functioning. Most mental health patients have some long term issues that should be the focus of treatment along with the acute problem. In all of health care, long term problems are treated as well as emergencies and exacerbation's of chronic problems. Unless an insurance plan advertises that it covers only mental health crises and emergencies, it is obligated to treat the entire mental health condition.

8. "The treatment was not supported by scientifically based guidelines."
In mental health, most managed care companies make their own decisions about the amount of scientific data needed to support a treatment. Their decisions are heavily influenced by cost. The true guidelines and the scientific backing for these guidelines are almost never presented for any kind of public objective scientific review. Companies which claim that treatment has not passed their scientific standards should reveal those standards and the scientific basis for the treatments that both passed and failed those standards. If these were publicly available, independent scientists could evaluate them.