Medical Society Battles Carveout Over Managed Care Practices

The nation’s largest managed behavioral health care carveout is feeling the heat from physicians in New Jersey—and giving it back.

The Medical Society of New Jersey (MSNJ) has charged Magellan Behavioral Health Care with “abusive practices” in its provision of mental health services and has called on the state’s Department of Banking and Insurance and the Department of Health and Human Services to investigate the company.

Physicians in the state told Psychiatric News that the company maintains a “phantom network” of doctors who are listed on the company’s provider panel but who are in fact no longer on the panel or not seeing new patients. Consequently, they said, many patients—especially those coming out of acute or partial hospitalization—are unable to access psychiatric care in the community.

“The most charitable way of putting it is that Magellan is not keeping its provider list up to date,” said Marc Rothman, M.D., president of the New Jersey Psychiatric Association (NJPA). “The least charitable way of putting it is that the company is misrepresenting the services it provides.”

Charges against the company also include the familiar litany of complaints about managed care: administrative hassles, slow or inadequate reimbursement, and fragmented care for patients. The cumulative effect of the company’s practices, Rothman and other psychiatrists said, is a shortage of psychiatrists willing to work with the company, and this, in turn, has invariably affected patient care. One psychiatrist described the case of a patient who called seven practitioners listed on the company’s provider panel—none of whom was accepting patients—until finding one whose earliest appointment was two months away.

Another psychiatrist told Psychiatric News that the company has also prohibited psychiatrists from using the “evaluation and management” codes for situations in which they are supervising the treatment of patients but not providing psychotherapy.

“It is the policy of Medicare and APA that E&M codes may be used legitimately by psychiatrists,” said Nancy Block, M.D., president-elect of the NJPA. “I have used them for a number of my patients who see another mental health professional for psychotherapy while I manage medication and coordinate their overall treatment. This includes reviewing and coordinating treatment by other physicians for complex overlapping conditions.”

Block said that the company has repeatedly insisted she use the 908 series psychotherapy codes even when another professional is providing the psychotherapy—a circumstance that can cause administrative delays when two professionals are submitting psychotherapy codes for the same patient.

“I object to being forced to code in a manner that I consider inaccurate because Magellan has arbitrarily decided which codes it will cover,” Block said.

Block is not a member of the company’s provider panel, but treats patients who are covered by Magellan, she said.

Eizabeth Rody, M.D., medical director at Magellan’s New Jersey regional service center, said that the company’s computer system is set up to reimburse physicians using the E&M codes for inpatient services and outpatient substance abuse services. The 908 psychotherapy codes are more typically required from psychiatrists because “that captures what they do typically do on an outpatient basis,” she said.

But she noted the company does make exceptions on a case-by-case basis for psychiatrists using the E&M codes on an outpatient basis for services other than substance abuse. “It’s a very unusual thing,” she said.

To some extent, the complaints reflect well-established gripes with managed care generally. As Rothman observed, “It’s not just Magellan—these complaints are endemic to managed care.”

But the dominance of Magellan, which has contracted with most major insurers in the state to oversee mental health care, appears to have focused physicians’ wrath on the company. And the shortage of psychiatrists on Magellan’s panel has affected the practice of general physicians in the state and roused the ire of the state’s medical society.

“After a full year of examining mental health problems in our state, we have concluded that Magellan is taking advantage of vulnerable individuals who are hard pressed to advocate for themselves,” said Angelo S. Agro, M.D., president of MSNJ. “Magellan’s built-in barriers are preventing mental health providers from delivering appropriate care. [The company] systematically eliminates customer choice and sacrifices quality and ratchets down care to a minimum level. Magellan is becoming shorthand for an inadequate network, a stranglehold on the market, and bargain-basement care.”