Though he had to turn to the courts to remedy his complaint against one of the country’s managed care behemoths, Daniel Shrager, M.D., is finally able to boast of a victory of sorts.

In a scenario that bears more than a passing resemblance to the David and Goliath story, Shrager took on Magellan, the largest mental health care carveout in the U.S., and Highmark Blue Cross/Blue Shield. He refused to stand by and take it when a Magellan subsidiary, Greenspring Health Services, decredentialed him from its provider network.

Shrager’s managed care problem arose when Magellan, which owns Greenspring and manages mental health care for people insured by Highmark, told him to call and schedule a site review of his practice. As part of that review company representatives would assess such factors as record-keeping procedures and other office-related issues, for example. The patient-record review is a company practice for high-volume providers such as Shrager.

The psychiatrist wrote back to Magellan, emphasizing that he was not about to share patient records with the company without first obtaining his patients’ consent. He told the company that his concern stemmed from a possible diminution in the strength of the relationship he had with patients if they were always aware that the substance of therapy could end up in the hands of insurance company employees.

He never received a response to that letter.

He had thought that the company would tell him how it expected him to proceed, particularly regarding obtaining consent forms that patients could sign.

What he did receive was a notice that he had been decredentialed, which meant that his patients could no longer expect insurance coverage if they continued treatment with him. It also meant that his income was likely to take a serious hit.

The company wrote letters to each of Shrager’s patients informing them by phone and letter that he was no longer a member of their provider networks, but gave no explanation as to why his status with Magellan had changed.

It was one of those patients who first told Shrager about his decredentialing. He told Psychiatric News that he never received an official communication from the company notifying him of its action.

At that point, Shrager turned to the court for relief, asking a judge of the Court of Common Pleas of Allegheny County to issue an emergency preliminary injunction preventing Highmark and thus Magellan from removing him from its provider network.

Shrager’s motion was based on two premises—that he was decredentialed without due legal process and that Magellan violated Pennsylvania law when it insisted it had the right to review his patients’ psychiatric records during the course of a site review.

The psychiatrist, who has received financial assistance from the Pennsylvania Psychiatric Society in his legal battle, filed his motion on September 18, and on September 19 he learned that Judge Joseph James had granted his injunction request.

Not only did the judge order Shrager’s reinstatement as a participating provider, he ordered the defendants to inform every patient that they had told of the psychiatrist’s decredentialing that he had in fact been reinstated. The judge added another condition as well, namely, that the managed care companies conduct a thorough internal administrative review of the way in which they applied their decredentialing procedures in this case.

The judge did not, however, respond to one of the two crucial issues Shrager addressed in his motion for injunctive relief. The judge based his ruling on the psychiatrist’s failure to receive due process in the decredentialing procedure, but he did not comment on whether state law does in fact prohibit insurers from demanding to review patients’ records.

The judge ordered Magellan and Shrager to settle their disagreement internally without resorting to further court intervention. As of November 1, Shrager said he had not heard from the company even though he and his attorney sent a letter requesting that a meeting be scheduled.

Shrager said in an interview with Psychiatric News that he "feels vindicated by the judge’s decision. It’s as if the law and the courts are clearly behind us" and made a statement "that extends beyond my own situation."

The injunction the court issued on behalf of Shrager does not, however, bring the matter to a close. It is a temporary measure pending the results of discussions between the two parties, but Shrager has filed a suit against the companies that could be pursued in the future. Among the bases for his complaint, Shrager maintains that the company illegally interfered with his ability to conduct business, has breached its contract with him, and committed slander and libel.

The business-related charge arises in part from Magellan’s control of a large portion of the insurance market in western Pennsylvania—about 40 percent, according to Shrager, thus giving it the power to "cripple" a practice when it decredentials a psychiatrist. As he stated in his legal complaint, as a result of this domination, "when Magellan rejects a psychiatrist as a credentialed mental health provider, a very large part of the market for insured psychiatric patients becomes unavailable to that psychiatrist." He also cited the potential harm to chronically ill patients when their long-time psychiatrist becomes unavailable to them.

The alleged breach of contract stems from Shrager’s contention that his contract states that participating physicians must follow state and federal laws governing confidentiality of medical records, and that if he complied with the request, he would be in violation of those laws.

Magellan, however, insists that the ability to review patients’ records is "a legitimate business need" for a managed care company, according to Magellan spokesperson Erin Somers. In addition, the company "believes that Dr. Shrager’s refusal to comply with our request [to review patient records] violates his contract with us," she told Psychiatric News. "We recognize he feels very strongly about this, and we’re open to hearing about providers’ concerns. We’re working with Dr. Shrager to see if we can reach a mutually agreeable resolution of this issue."—K.H.