Insurance System Failure: Coverage Denial for Inpatient Psychological Treatment

August 18th, 2015
in Op Ed

by Michael Kulla

I watched the striking 60 Minutes 02 August 2 2015 show about patients prematurely denied coverage for inpatient psychiatric treatment by insurance doctors who never, ever saw the patients, sometimes with disastrous outcomes, including suicide and homicide.

Follow up:

Reporter Scott Pelley cited several vivid examples of patients with acute and/or chronic emotional problems whose overhasty coverage denials reached between 90 and 100%. In one case, a health insurance psychiatrist who reviewed 550 cases a month promptly rejected coverage when the patient's treating doctor failed to call him back within 54 minutes.

The case of a 14 year old bulimic girl who was purging and was wasting away was one of those featured. From age 12 on she was cutting herself and she required around the clock watching so as not to purge. She was prescribed several weeks of treatment at a psychiatric hospital but insurance coverage was terminated part way through treatment. The hapless parents couldn't afford the out of pocket fee. Their daughter came home and soon after died.

This is how it typically works. The insurance rep poses the question:

"Is the patient acutely homicidal or suicidal?"

The answer is usually no, because guns, knives, poisons, etc. have been confiscated. What follows is insurance's retort:

"Then why does he/she need to be in the hospital?"

The patient is summarily referred to a lower level of care, meaning hospital coverage is henceforth denied .  60 Minutes found that with chronic, expensive cases most were prematurely denied.

Losing health coverage in the midst of outpatient psychiatric treatment is appalling. Most developed countries of the world treat health care as a necessity, not a privilege, countries like Canada, The United Kingdom, Switzerland, France, Germany, Italy, Taiwan, etc. Like fire or police protection, it is considered a right. The World Health Organization ranked U.S. 37th out of 191 countries in 2013, just above Slovenia and Cuba, and the American health care system is expensive.

Other wealthy democracies could show us how to build a health system that meets our particular needs. A potpourri of options are available. However, vested interest (insurance, pharmaceutical, hospital chains) have fended off attempts to restructure it for the benefit of care holders.

The mental health care system in America is a multi-dollar industry that is still not big enough to serve all those that need to use it. Cost is one barrier. Since the 1960s there has been a big shift away from inpatient treatment and toward outpatient treatment and prescription drugs. The push was for more treatment in community settings rather than in state-run mega institutions. But in the process of " reform," the most disturbed patients have turned up in jails. Homeless shelters and flop houses. Deinstitutionalization has been problematic in its own right and has contributed to more pricey private psychiatric hospitals and insurance bottom lines .

There has been an alarming incidence of mental illness the world over. Countries are struggling to address the issue in terms of professional resources, available facilities and the economic burden.

Apart from established biological and genetic reasons, the current disruption of the social fabric due to changing political scenarios, poverty, violence and terrorism has negatively effected millions of people's psyches.

There are some good tidings for psychiatric patients, such as the celebrated law requiring insurers to treat all patients equally with either a physical or mental affliction. While this is on paper, in practice many insurance companies routinely deny requests for inpatient treatment for psychological problems.

The advantage of the Affordable Care Act, aka Obama Care, patients are no longer denied coverage for pre-existing conditions like schizophrenia, depression, bipolar disorder or drug and alcohol dependence. Also, young adults up to age 26 can remain on their parents' health plan. This is a boon because half of all mental health and substance abuse conditions begin by age 14 and three quarters begin by age 24.

We all, and especially the long-term psychiatric patient, deserve fair and respectful treatment. Successful outcomes require a partnership between patients, families, mental health professionals and health plans. Some other industrialized nations with vested interests have overcome political hurdles and reformed their health care systems. What about us?

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