Managed Care Concerns Extend To Once Privileged Information

By John Voket

(This is the second part of a series on how local physicians and medical professionals are dealing with escalating malpractice costs, diminishing compensation and other issues related to the managed care industry.)

Family therapist Bart Schofield might be compared to a safecracker who begins working for the police advising them on the inside tactics used to get at those valuables locked tightly away in what some may think is secure storage.

In his previous career, Mr Schofield was a Chartered Life [insurance] Underwriter. In that capacity, he became familiar with the practices insurance companies used, and may continue to use, which he firmly believes can jeopardize the security of his patients’ most private personal and medical information.

This is why Mr Schofield and his wife Ruth, also a family therapist for nearly a quarter-century, have opted out of participating in their patients managed care compensation programs. This practice, which is growing in popularity especially among mental health professionals, is one of the by-products of managed care practices that are impacting medical professionals from the privacy of their offices to the brightly-lit arenas of operating rooms across the region and the country.

According to Mr Schofield, the meager levels of compensation rendered by managed care providers – when compensation is returned at all — is not worth the privacy risks a patient may face when the intricacies of their mental health history and treatment can become all but public knowledge. He said that the Health Insurance Portability and Accountability Act [HIPPA] is deceiving because underwriting and other industry personnel, as well as human resource professionals and others can access and circulate sensitive medical information with the click of a computer mouse.

“In practice, HIPAA has allowed the dissemination of our records of every illness, disorder, and condition for which an insurance claim has been filed,” he said. Mr Schofield added that HIPAA has given managed care companies and underwriters, who receive no practical medical training, even more involvement in patients’ lives.

Compounding the already complicated privacy standards are information services that can access sensitive medical and treatment records from secondary sources, which are actually disclosed and endorsed in the HIPAA statement providers are required to sign if they are participating in managed care compensation.

“If a company [human resources representative] can afford to subscribe to certain information services, they can find out almost everything that is on your insurance company’s health care records,” Mr Schofield said. “That’s part of the reason why my wife and I both opted out of taking insurance from our patients.

“I don’t want some young person to be refused a job five years down the road, because I recommended he seek psychiatric and possible medical treatment for depression or anxiety as a teenager,” he said.

Mr Schofield said in his previous insurance industry career, he saw many cases where life insurance candidates were rated for seeking psychiatric treatment sometimes as much as a decade earlier.

“This would result in a surcharge to the applicant’s premium,” he said.

While Mr Schofield acknowledged the practice might not remain as prevalent today, he said anyone with psychiatric treatment on a medical record — especially if medication was prescribed — would result in heightened scrutiny and possibly the denial of some or all coverage by some insurance providers.

Underwriting Decision Makers

Mr Schofield said his associates complain that insurance underwriters are not only arbitrarily switching prescriptions to less expensive generic alternatives without consulting the physician, but are sometimes suggesting mental health professionals “upgrade a diagnosis code on an individual in order to provide compensation.”

“It’s my belief this is done to discourage the patient from making a claim and paying out of pocket,” he said. In his practice, Mr Schofield often encounters patients that have short-term issue, or who just need his support to get through a difficult situation in their life like a relocation, divorce, job loss, etc.

“But underwriters won’t pay for a diagnosis of adjustment disorder, or an otherwise unspecified condition. They want to see a diagnosis of depression or some other behavioral disorder which then goes on the patients record.”

He said the practice qualifies doctors and counselors to receive some modest compensation, when less critical diagnoses are not typically covered at all.

“If the patient agrees then it goes on the record, but if the patient doesn’t want that diagnosis in the file, he may choose to pay out of pocket for therapy or not seek therapy at all,” Mr Schofield said.

Another insurance industry practice, capitation, provides a gross fixed rate of monthly compensation based on the number of patients on certain plans, that the medical professional is likely to see.

The CIGNA health care company’s provider directory defines capitation as a mutual agreement under which, “network physicians, provider groups or physician/hospital organizations (PHOs) are paid a fixed amount (capitation) at regular intervals for each member assigned to the physician, group or PHO, whether or not services are provided.”

The issue of compensation is far from exclusive to the mental health profession. Newtown resident Dr Lionel Brown, whose specialty involves intricate hand surgery, recently stopped treating Medicare patients. Dr Brown illustrated how, in a growing number of situations, he believes aggregate premiums significantly exceed the actual cost of procedures, and are exponentially greater than compensation he receives for a claim.

“Today, a doctor does a $100 procedure on a patient who paid $200 for his insurance, then the doctor gets to apply for a reimbursement that is generally about $50,” he told The Bee.

Dr Brown said he is forced to deny what he feels is appropriate care to many others, “for a reason we never expected,” because insurance underwriters are refusing to endorse the recommended procedures.

Mr Schofield refers to as “managed care managing the bottom line,” to benefit the company and its shareholders before the patient.

Doctors Limiting Care

A recent poll of Fairfield County physicians by the Fairfield County Medical Association (FCMA) evaluating the quality of care, the cost of that care, and the ability of doctors to run viable practices that utilize the latest technology revealed several troubling trends.

In terms of care, 47 percent of Fairfield County doctors report limiting the scope of their practice, up from 38 percent in 2005, which itself was up from 18 percent in 2002. Dozens of doctors report they have stopped delivering babies and performing high-risk procedures and surgeries.

Over a third — 39 percent — say they have been forced to limit the number of sicker patients with complex illnesses. In 2002, only 14 percent said they altered their patient mix in response to medical liability insurance costs.

Doctors say they are also practicing more “defensive medicine” by ordering more tests than necessary in their medical judgment, to protect themselves in case they are sued. In 2006, more than two-thirds of doctors say they practice “defensive medicine,” up from 63 percent in 2005, 59 percent in 2004, 56 percent in 2003 and 36 percent in 2002.

Newtown resident Dr David Kloth, an advocate and renowned authority on interventional pain management whose practice treats nearly 40,000 patients annually, learned recently that Medicare would further reduce rates by ten to 15 percent or more in the coming year, affecting many of his patients who are most acutely in need of his services.

“Twenty to 30 percent of the patients I see, I can’t provide the best care because insurance underwriters are denying my prescribed treatments,” Dr Kloth said. “In one case, I prescribed an FDA approved process which was denied. The patient, who was in acute pain, was forced to pay the $15,000 for the procedure out of pocket, or undergo a $50/60,000 invasive surgical procedure, a major operation that the insurance company said it would pay for.”

(The next installment of this series will focus on ways the medical industry is suggesting positive changes to ensure its survival going forward.)