Medicare Privacy Ruling Angers Insurer, Distresses Psychiatrists

Though it may appear ironic to many psychiatrists, a large health insurer is turning to patient privacy arguments in its fight against a judge’s order to turn over the names of beneficiaries whose attempts to obtain psychiatric care were rejected by the company.

The legal combat is occurring in Minnesota, where Attorney General Mike Hatch filed a suit last October against Blue Cross and Blue Shield of Minnesota alleging that the insurer has violated its agreement with policyholders by refusing to pay for mental health and substance abuse care that it is contractually obligated to cover.

The attorney general’s complaint specifically cites the insurer’s failure to approve care for mental health, substance abuse, and eating disorders.

On February 21, after hearing arguments from both sides of the dispute, Hennepin County District Court Judge Myron Greenberg ordered Blue Cross, which is based in St. Paul, to provide Hatch with the names of policy beneficiaries who were denied coverage for mental health treatment.

Hatch and his colleagues argued successfully that Minnesota state law does permit otherwise confidential medical information such as the names of patients to be released to the court without their consent during a health care fraud investigation. The judge said that the attorney general’s office must take steps to ensure that the identities of the patients whose records it evaluates remain confidential.

After the judge announced his decision, Deputy Attorney General Alan Gilbert said that he is not sure of the number of patients whose records his office may assess for care denials, but it may be as many as several thousand.

The process of how the records will be obtained and reviewed is still undefined, however, and the potential for confidentiality breaches troubles a substantial number of Minnesota psychiatrists, pointed out Elizabeth Reeve, M.D., president of the Minnesota Psychiatric Society.

“A lot of people are concerned about the process, because we still don’t know how patients will be contacted regarding their records being reviewed or who will be viewing those records,” Reeve told Psychiatric News. “Our members believe that it is not the place of politicians to review medical records. They don’t have the education or the background to do so.”

According to the February 22 Minneapolis Star Tribune, Gregory Weyandt, an attorney representing Minnesota Blue Cross, characterized the decision as “a tie,” since the judge also ordered Hatch to provide the insurer with information to back up the treatment-denial allegations that led him to file suit against the company.

When he filed the suit in October, Hatch cited “a barrage of unwarranted delays, unlawful excuses, and unnecessary hurdles” when families try to obtain mental health coverage for their children through Blue Cross and Blue Shield of Minnesota. He also accused the insurer of delaying court-ordered treatment for mentally ill or substance-abusing youngsters, maintaining that the insurer either rejected or limited insurance coverage “after mere paper reviews, contradicting the sound judgments and recommendations of the only physicians who have ever actually examined and treated the patients.”

Hatch charged that Blue Cross left taxpayers and family members with no choice but to foot the bill for mental health treatment the insurer was contractually obligated to deliver. Much of the taxpayer burden, he said, is a consequence of the company directing policyholding parents to the juvenile justice system to obtain mental health care for their troubled children.

Among the other allegations enumerated in the suit are that the insurance company “delay[s] coverage by forcing subscribers into unwarranted appeals of denials of coverage for medically necessary and preauthorized treatment,” and that it “misrepresent[s] and omit[s] material facts regarding its coverage of authorized treatment.”

Hatch also maintained that the insurer is in violation of state consumer-protection laws in light of its practice of keeping existing and potential subscribers in the dark about the standards and criteria upon which the company relies in its care-denial decisions, including who evaluates whether a treatment is medically necessary. Advertisements describing the insurance policies also mislead the public, the suit says, by failing to specify limitations of the policies and the standards the company routinely uses to deny care.

On October 3, when the lawsuit was filed, Blue Cross spokesperson Karl Oestreich told Reuters Health that the company pays “for more than 94 percent of requested treatment for mental health and chemical dependency services, whether it’s reviewed or not....The issue is not about denying care; the issue is about providing care in the most appropriate setting.”

At the crux of the dispute is just who is best qualified to determine whether treatment is medically necessary—the patient’s physician or the insurance company’s reviewers.

Regarding the potential impact of the suit on mental health care in Minnesota, Reeve emphasized that “there is a general consensus that anything that could improve care for people with mental illness is a positive step, but the process involved in this case has the potential to stir up considerable negativity.”

[State of Minnesota v. Blue Cross and Blue Shield of Minnesota, Hennepin County District Court] ▪