Minn. Psychiatrists Help Implement Insurance Settlement
In January, about two years after Minnesota’s Attorney General Mike Hatch first investigated complaints about Blue Cross and Blue Shield of Minnesota (BCBSM), implementation began of a legal settlement between the insurance company and the state.
Hatch had charged the insurance company with engaging in a “pattern and practice of misconduct” that resulted in shifting costs to taxpayers and/or families because plan members were told to seek help for the mental health and chemical dependency problems of their children through the juvenile justice system or appropriate governmental agencies (Psychiatric News, April 20 and July 20, 2001).
“BCBSM [used] language that suggests parents should have their children arrested and treated by government agencies through the juvenile justice system or placed in foster care,” he wrote.
Hatch also alleged that BCBSM delayed or denied coverage for court-ordered mental health and chemical dependency treatment, denied coverage after “paper reviews,” wrongfully terminated coverage, and failed to disclose the basis for its denials. The company’s mental health and substance abuse benefits are administered through Behavioral Health Services Inc. (BHSI).
Hatch cited BCBSM’s advertising and promotional materials that promised, among other things, “easy access to the care you need” as a basis for a charge of misrepresentation of its actual business practices.
The harsh charges were replaced by conciliatory language at the press conference announcing the settlement last June.
Mark Banks, M.D., then CEO of BCBSM, said, “We were able to reach an agreement because we found common ground with the attorney general over a shared vision of what the mental health and chemical dependency system should be in Minnesota—a system that is compassionate, responsive, accessible, and effective.”
Hatch replied in kind, “The company stepped forward to reach a settlement that is both fair and responsible.”
That settlement included an agreement by BCBSM to pay $8.2 million to Minnesota as compensation for care the company should have provided but for which the state had to pick up the tab.
More significant for the long term, however, is that the company also agreed to implement a series of far-reaching changes in its business practices.
At least one of those changes is without precedent in the country, according to Deputy AG Alan Gilbert. All are being closely watched by Minnesota psychiatrists because of their immediate impact in the state and potential impact throughout the country (see box).
The settlement calls for establishment of a three-person panel who will review all BCBSM denial-of-service claims. Nothing is new in the use of an external review panel, but operation of this particular panel will be decidedly unconventional.
Take the time requirements, for example. When BCBSM denies an urgent claim for treatment, it must notify the panel of the claim and the basis for the denial within 24 hours. If the company denies treatment for chemical dependency or an eating disorder on the grounds of medical necessity, it must send the denial to the panel within six hours.
The panel has one business day in which to overturn or uphold the denial of service unless additional information is needed.
But it is the fact that the panel is composed of three former judges, rather than medical practitioners, that makes the panel genuinely unique. One member each was selected by Hatch, the chief judge of Hennepin County District Court, and a BCBSM representative.
Lee Beecher, M.D., president of the Minnesota Physician-Patient Alliance (MPPA) and a former president of the Minnesota Psychiatric Society (MPS), looks at the unlikely composition of the panel as an opportunity, rather than a drawback.
He told Psychiatric News, “Several years ago a coalition, including MPS, succeeded in passing a state law that defines medical necessity for mental health services.”
That definition stipulates that “medically necessary care must be consistent with generally accepted practice parameters as determined by health care providers in the same or similar general specialty. . . .”
That law, according to Beecher, could give psychiatrists an opening to ensure that the panel considers APA’s practice guidelines when disputes arise about medical necessity.
John McIntyre, M.D., chair of APA’s Steering Committee on Practice Guidelines, said, “All too frequently reimbursement decisions have been based on little or no evidence and frequently without input from clinical experts. We applaud the use of professionally developed, evidence-based practice guidelines in driving those decisions.”
Floyd Anderson, M.D., chair of MPS’s Private Practice Committee, noted that MPS had recently approved a resolution submitted by its Task Force on Quality Psychiatric Care describing seven conditions that must be met to ensure the local standard of care. That report, said Anderson, should also guide the judicial review and will be presented to insurers soon.
The agreement also will force consideration of the specific steps an insurance company must take to enable plan members to use their benefits.
The agreement requires that BCBSM ensure that enough “health care providers are available to provide treatment within a medically appropriate period of time, not to exceed 10 days.”
If such treatment is not available, a plan member may obtain treatment from a licensed provider outside the BCBSM provider network. The provider would be reimbursed for “usual and customary fees.”
David Miller, CEO of BHSI and vice president of BCBSM, told Psychiatric News that BHSI had already taken steps to increase access by eliminating prior authorization requirements for appointments with psychiatrists and mental health personnel. A plan member can obtain an immediate referral by calling a help line.
He added that if an appointment is not scheduled within 10 days, the member can obtain treatment from a licensed provider outside the network with no financial penalty, as long as the member notifies BHSI. The company plans to reimburse such out-of-network providers at Medicare rates of reimbursement.
Beecher said, “This provision will work only if plan members understand that they have a right to treatment within 10 days. We will expect and be looking for BCBSM to find a way to notify its members about this new right.”
He also expressed skepticism about BCBSM’s equation of Medicare rates with usual and customary fees. “Medicare rates are so low that BCBSM will have great difficulty in getting psychiatrists to accept patients,” he said.
The agreement stipulates that if mental health or chemical dependency benefits are included in a contract, the benefits must include both inpatient and outpatient treatment, and they must be provided at the same level of coverage as is provided for other medical services.
Miller said that BCBSM has modified contracts to put the company in compliance with parity requirements. He added that although the settlement agreement does not require a closer integration of medical and psychiatric services, BCBSM and BHSI are beginning to make integration a priority.
Since the settlement, BHSI has identified from 12 to 15 “mixed protocol” items, such as eating disorders, that have both psychiatric and medical dimensions. BCBSM will make certain that both kinds of treatment are covered and has modified prior its policy to ensure that general practitioners who treat disorders like depression can be reimbursed, according to Miller.
The AG may appoint an auditor every six months who will have “full, timely, complete, and unrestricted access to the books, records, and personnel [of BCBSM and BHSI] to assess the information and processing flow with respect to benefits.”
The auditor may make recommendations that BCBSM must accept or submit to arbitration.
Gilbert noted that the original impetus for the lawsuit was a high volume of citizens’ complaints about BCBSM to the Attorney General’s office and that Hatch would again take corrective action if a pattern of legitimate complaints develops.
He added, “This settlement could have a national impact. We’ve gotten calls from state governments all over the country and from the Department of Labor about it.”
Larry Lurie, M.D., chair of APA’s Committee on Managed Care, said, “Decisions about medical necessity and even good practice have shifted from physicians to managed care companies. Now, in Minnesota, those decisions have moved to the judicial branch.
“I hope the ultimate outcome of the settlement will be a renewed emphasis on the importance of practitioners’ opinions in decisions about access to care.” ▪
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Published online: 15 March 2002
Published in print: March 15, 2002
Notes
Harsh allegations about insurance company practices in Minnesota resulted in a far-reaching legal settlement. Area psychiatrists are devising ways to make certain its promise is fulfilled.
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