A state court in West Virginia has determined that the West Virginia Public Employees Benefit Plan discriminates against people with mental illness by covering psychiatric treatment at levels lower than traditional medical treatment.
The case was brought by the wife of a state employee after the plan refused to pay her bills for inpatient and outpatient psychiatric treatment. When ordering the plan to reimburse her, the Court characterized as discriminatory a state law limiting coverage for psychiatric treatment. "This Court finds no rational basis and no compelling reason to make a distinction between services of a physician treating mental illness and services of a physician treating any physical illness."
This decision adds to several cases around the country successfully challenging lower coverage in health insurance policies of neurobiological brain disorders (severe mental illnesses) than other medical disorders. However, this case is unique in that it is the first decision that characterizes lower coverage of these disorders as discriminatory.
Previous successful challenges were limited to circumstances in which insurance policies failed to define specifically what was meant by "mental illness" or "psychiatric disorders." For example, in Arkansas Blue Cross and Blue Shield v. Doe, a father challenged limits placed on coverage of his daughter's bipolar disorder. Although the policy included benefits for "mental, psychiatric or nervous conditions," it failed to provide a specific definition of what these conditions were.
Citing scientific evidence of the biological basis of manic-depressive illness, the court characterized this illness as physical in origin rather than a "mental, psychiatric or nervous condition." It therefore ordered that the daughter's treatment for bipolar disorder must be covered at the same level as all other physical disorders.
However, the impact of the Doe decision and several others like it was minimal because insurance companies could evade long-term compliance with these rulings simply by changing their policies to include a specific definition of "mental, psychiatric or nervous conditions." This, in fact, is what happened after these decisions were handed down.
The decision in the West Virginia case is potentially more significant because it characterizes lower coverage of severe mental illness as discrimination. Therefore, the West Virginia Employees Benefits Plan cannot escape compliance simply by altering the language of its health insurance policy.
In a letter to the judge who handed down the decision, Carolyn Nelson, executive director of the West Virginia AMI, characterized the decision as "an important milestone in the fight for justice and fairness to those...West Virginia families who will be touched by mental illness this year."
The State of West Virginia is expected to appeal, seeking reversal of the circuit court's decision.
by Ron Honberg
director, NAMI Legal Affairs
At the NAMI convention last July, it was reported by the incoming president of the National Association of State Mental Health Program Directors that 44 states were in some stage of modifying their Medicaid programs through use of managed care. When the newly elected legislators and governors take office in all but two states in January 1995, they will return to this Medicaid agenda.
Managed care almost always means that an HMO-like provider assumes the financial risk for treatment of an enrolled population in exchange for a monthly fee per person enrolled, or capitation payments. Capitation contrasts with fee-for-service reimbursement, in which the insurer--in this case Medicaid--is at risk.
This shift in who is at risk is the incentive for states to convert their Medicaid programs, in whole or in part, to capitated arrangements. For families and consumers to interact effectively with the development and implementation of such systems, a whole new set of guidelines must be learned.
NAMI families and consumers have mastered participation in the PL 99-660 planning councils and have effectively advocated for the amendment of their state Medicaid plans to include the optional services most helpful to persons with severe and persistent mental illness. Becoming involved early and effectively in the conversion of fee-for-service Medicaid to capitated managed care models, however, requires significantly different knowledge.
The basis of the agreement between state government and the healthcare provider organization bidding for the capitated business is a contract. The individual states' requirements governing contracts with private-sector entities must be learned. They almost certainly involve due posting of public notice in a state's official register and elsewhere.
Identifying the contracting authority, obtaining the bid specifications, entering into dialogue with the Legislative Committees of jurisdiction, and establishing a relationship with the State Mental Health authority and the Medicaid authority are all preliminary data-gathering steps. They are preparatory to making an evaluation and recommendations.
The following is a rudimentary checklist against which managed care proposals may be critiqued. These suggestions are by no means exhaustive. They are simply a means to further discussion.
1. Sufficient financing - All parties must be reminded that our people are already ill and disabled. They are heavy users of services. Taking over the care of such a population will clearly fail if the financing is insufficient.
2. Commitment to non-medical services that work - Managed care bidders who have dealt with primarily workforce-related populations may not understand--or be prepared to deliver--services like intensive case management and psychosocial rehabilitation necessary to our populations.
3. Selecting a managed care contractor - Family members and consumers must be integral participants in the development of selection criteria and in the actual selection of a managed care contractor. Selection criteria should include:
Evaluation of professional staff involved in the decision-making for individual cases. Decisions in cases involving severe mental illness should be made by psychiatrists and other mental illness professionals with specific training and experience working with these individuals.
Evaluation of criteria for decision-making in individual cases. These criteria should reflect the contractor's concern with quality care and positive outcomes and should also incorporate planning for future care. (For example, simple discharge is inadequate. It must incorporate pro-active planning for the comprehensive needs of individuals in the community after discharge.)
Mechanisms for consultation and for obtaining second opinions in appropriate cases, including those in which the consumer and/or his or her family request a second opinion.
Procedures for appeal and administrative review in accordance with existing professional standards, state and federal laws, and recognized best practices. Administrative-review panels must be comprised of individuals not employed by the managed care provider and not involved in the treatment, which includes family members and consumers.
An extensive program-evaluation component that provides longitudinal assessment of individual outcomes. This evaluation should not be conducted by the program itself, but by outside evaluators such as academics, family members, and consumers.
4. Statewide advocacy ombudspersons must be established to represent the interests of consumers and family members who disagree with decisions made by managed care organizations (MCOs). These individuals and the organizations they work for must be independent of all MCOs and state agencies with a direct interest in the outcomes of these disputes. Yet they must also have stable and ongoing financing.
5. Required annual reviews. SMHAs and state Medicaid agencies with responsibility for selecting MCOs should conduct annual reviews of the companies that are awarded contracts. These reviews should include public hearings and other opportunities for interested parties to comment in writing or in person. Advocacy ombudspersons and individuals or organizations responsible for program evaluation should be consulted as well.
by Robert Bohlman
director, NAMI Government Relations
For most of the past decade, members of NAMI at state, local, and national levels have worked hard to improve services delivered through our public mental health system. We recognized early that users of the mental health system--that is, consumers and their families--are in the real sense the only customers.
Our long history of advocacy to improve services has created new attitudes and new respect in the public sector. Bureaucrats have learned to listen to what families and consumers want and have moved to create policies and programs that respond to the full range of service needs.
We've applauded the innovations that have come in many systems as a result of our advocacy, and we've looked to state legislatures to support our demands for priority resources for the most severely mental ill and disabled individuals.
More recently we've pointed to the outcomes that can be achieved when comprehensive community support programs are in place. More than 20 years of research on the PACT program in Madison, Wisconsin, has led to its enthusiastic introduction in a number of other states and communities.
Now in the rapidly changing health care environment we meet a whole new set of players--especially with the apparent failure of federal healthcare reform. A focus on the states is essential. Indeed, in mental health care as in all major social change, the states are and have always been our true laboratories. As we introduce ourselves to this new set of players coming largely from private sector experience, we need to determine the key messages with which to reach them.
First, we must recognize that managed care programs bring both opportunity and risk. The opportunity includes the potential to use efficiencies learned in the private sector to control the escalating healthcare costs that are throwing many state's budgets into deficit.
The opportunity to integrate public and private systems has long been a goal of our family movement. Further, we hope to use the knowledge gained through research to achieve greater treatment efficacy. Truly managing care, not just managing cost, must be our guiding principal.
The real integration of the public and private sector includes an integration of providers, which may well bring a better trained set of professionals to meet the needs of our families. Additionally, managed care integrated services delivered in a managed care setting that encompasses both public and private systems can markedly reduce stigma.
Treatment outcomes should be improved, especially for those suffering from dual disorders of major mental illness and substance abuse. We should expect to make our greatest impact on our most needy clients through a combination of resources managed efficiently.
Nonetheless, there are certainly grave risks. Managed care companies with little or no experience dealing with serious mental illness have much to learn from the public sector. Most important perhaps is the philosophy, the public health mission and mandate that underlies our state mental health authorities. The mission is a lifetime commitment to accepting responsibility for the effective treatment and humane care for individuals with severe and persistent mental illness.
Perhaps the most serious risks we face in this transition time are the continuing incentives to under-recognize, under-diagnose, and under-treat serious and persistent mental illness in systems that are still driven almost entirely by cost-containment.
Further, the acute care model that has been the core of most managed care systems fails to recognize the comprehensive and long-term nature of services and treatments needed by persons with schizophrenia, manic depressive illness, and other severe mental disorders.
Managed care companies tend to see themselves as having two essential customers: the patient and the payer. Because they work on a contract basis and because the payer represents literally millions of dollars, these companies need to balance clinical measures of outcome with the ever-present desire for cost-containment.
It is wise to remember that the key motivation for reform in all behavioral health care has been clear: a concern about controlling rapidly escalating costs and a need to exclude high-risk consumers. Thus we face important challenges as we move to balance cost, quality, and access--the big three in any successful managed care system. Quality and access are still controversial and difficult to measure, so cost remains the driving force.
As NAMI members become involved across the country in state-based reform, there are some key principals we must bring to the table. First, we must insist that family members and consumers are directly involved in the design and development of new managed care systems. We must be proactive, not reactive.
We must be engaged from the very beginning with any successful contractor. We must insist that providers have experience working with seriously mentally ill individuals. We must be sure that their key personnel understand the course and clinical management of persistent and episodic illnesses that may require both multimodule and long-term care from a multi-disciplinary treatment team.
We must look for linkages between in-patient acute care, out-patient, and partial hospitalization programs as well as important bridges to housing, rehabilitation, and other vital community support services. There must be clear mechanisms for clinical decision-making about treatment choices and rapid referral to specialty care. And the retention of experienced psychiatrists is essential for our relatives.
Published standards of care that involve consumers and families must be developed. We must insist that individual treatment plans be written for each seriously mentally ill person, and those plans must be reviewed on a regular basis with the client and his or her family, as appropriate.
Explicit criteria must be developed and applied in making individual case decisions, and regular assessment of the efficacy of both short- and long-term treatment interventions and services should be recorded. The overall goal is to respect consumer choice, not just in words, but in the design and development of the program.
All systems should devise a patient bill of rights and recognize that family members are not only valued partners in care, but often key members of the treatment team. There must be clear mechanisms for achieving second opinions and encouragement of the use of expert consultation, especially in more complicated cases involving dual diagnosis of substance abuse and major mental illness.
Care must be taken to note the presence of such problems as physical health disorders, a history of poor treatment adherence, or early signs of tardive dyskinesia. Individuals with severe mental illness often complain that they are treated only from the neck up.
The latest medications, including atypical antipsychotics such as Clozapine and Risperidone and the newer anti-depressants such as Prozac, Zoloft, and Effexor must be made available to all patients, to all consumers.
These are the state of the art in psychiatric treatment, and if we are to achieve benefits from managed care that moves to merge public and private systems, we must insist that our family members get the best our science can bring us. We also know that these medications generally have a relatively benign side-effect profile, which leads to better compliance and ultimately a greater ability to use and benefit from rehabilitation and social support services.
We need to insist that quality and outcomes be monitored and regularly reported as managed care systems move forward to replace our long-standing entitlement, but they must include the views of the families and consumers who are the primary customers. Also, independent, announced, on-site visits and case reviews should be part of any true monitoring of standards and quality.
There must be a published procedure for appeal of decisions and mechanisms for rapid administrative review in any disputes about treatment or services. A strong internal program of evaluation of outcome measures must be matched by a commitment to longitudinal assessment as well as ongoing efforts to improve assess and strengthen outreach to underserved and difficult-to-engage populations.
The state mental health authority and the Medicaid agency involved in the contracting should conduct an annual review of planned performance, goals, and objectives. The reviews should include confidential interviews with a cross-sampling of providers, consumers, and their families regarding the appropriateness of and satisfaction with services and the outcomes in terms of treatment and life goals.
Public hearings should be held regularly, and ample opportunity should be provided for public comment as the contractor for mental health services is regularly reviewed. We must insist, too, that these new players in the mental health field recognize the value of a partnership with families and consumers. Being two or three out of 25 or 30 members on advisory committees serving largely as window-dressing is not enough.
We must remind those who will shape the next service system that there are no easy answers. Our science is still evolving. We are still learning to listen and truly respond to the many families and consumers who need help and support. We must remind them that one size does not fit all in psychiatric services and that respect for individual choice must be the guiding principle in any system of care.
Our newly merging managed care and mental health create different roles than those we have seen for state government. Our systems are less government-controlled and more market-driven. The state will no longer be a deliverer of care, but will become a quality monitor, procurement manager, and regulator. This could mean the ultimate end will be a one-tiered, one-class system, and it may mean an increased advocacy force for the needs of persons with severe mental illness.
Nonetheless, we must be sure that managed care providers are truly qualified. There must be true measures of access and consumer satisfaction as well as real accountability for performance based upon published standards and protocol that go well beyond acute care. There must be significant involvement at every stage of the process from families and consumers.
It will be difficult in the next few years as we move to meet this challenging new role. Issues of quality assurance are vital. There are currently no agreed-on standards to measure quality of life, consumer satisfaction, and the outcomes that matter most to families. The development of truly integrated services will be critical as we continue our advocacy to bring mental illness into the mainstream of our larger health system.
Cost-shifting in today's two-tiered system allows symptoms to be ignored and ultimately encourages the dumping of the most severely ill and disabled into the often overburdened public system where we all know they often get ineffective and inadequate care.
During the next year, we will see intense competition as state after state moves toward managing its Medicaid mental health system. Without safeguards, standards, and outcome measures, our family members may be at risk. It is essential that all of us get involved and bring our voice to this important decision-making.
What's clear is that we will see an increased blurring of the lines between public and private systems as funding streams merge. The existing system of payment is successful because of managed care's ability to fall back on public-sector funding when a patient's maximum number of covered days is reached. But as health reform proceeds in state after state, the distinction between public and private funder and providers is becoming more difficult to determine.
As this transition occurs, it will be our challenge. Because outcomes will be the focus of decision-making as private managed care companies move into the public sector, we must focus our energies on accreditation issues. There has until now been no substantive involvement by families and consumers in standard-setting and outcomes-monitoring.
We must demand that managed care contractors annually reveal the amount of profit they are making, the percentage of funds going to administrative costs, and the salaries of their top executives.
We must guard against the practice that has been widespread in the private sector of squeezing money out through aggressive managed care that is not returned to improve the health care of the patient population. In the impoverished system that we face in most states, we need more, not less, money directed to services and treatment.
by Laurie M. Flynn
executive director, NAMI
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