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In a sign that psychiatrists and mental health professionals are fighting back against what they perceive as the excesses of the managed care industry, several of these providers have filed an antitrust lawsuit against the nation's largest managed behavioral health care companies charging them with conspiring to restrain trade and stifle competition.
The class-action suit was filed in federal court in New Jersey by seven mental health care practitioners and four professional organizations against the nine largest firms that manage mental illness care. The filing occured within days of the dismissal of a similar case in late May.
The organizations that brought suit are the American Association of Private Practice Psychiatrists, the Black Psychiatrists of America, and the New Jersey Society for Clinical Social Work, a chapter of the National Association of Social Workers. Two psychiatrists are among the individual plaintiffs-APA Treasurer Maria Lymberis, M.D., of California, and R. Anthony Moore, M.D., of Texas.
All of the individual plaintiffs have treated patients whose care was reviewed by one or more of the managed care companies, and the four organizations have members whose treatment decisions were reviewed by at least one of the defendants.
This suit's class-action status means that the named plaintiffs are suing on behalf of all mental health care providers whose patients had their treatment managed by one of the defendants and who "were damaged by the wrongful conduct" alleged in the suit. In the case of the organizations, the suit encompasses all of their members who meet the same criteria. The suit provides no specific number of members of the class but estimates the total to be "in the tens of thousands."
The plaintiffs contend that the companies, "who are direct horizontal competitors nationwide, ... determined whether and under what terms providers of professional services for mental health care would be able to sell their services throughout the United States."
They allege that the companies illegally conspired to "fix, lower, maintain, and stabilize the professional fees that could be earned by the plaintiffs and class members ... and to exclude from competition by boycotts, coercion, and intimidation" any professionals who tried to thwart this strategy. This, according to the suit, amounts to restraint of trade and thus violates federal antitrust statutes contained in the Sherman Act.
The psychiatrists and mental health professionals argue as well that "the risk-shifting methods of compensation" routinely used by the companies, particularly capitation, place these firms "in an irreconcilable conflict of interest situation, since the more mental health care they authorize, the lower their short-term profits will be."
The suit also accuses the companies of using cost-cutting strategies that are "not justified under the circumstances." These include "inappropriate use of" short-term psychotherapies and less-expensive mental health care providers as well as insisting that medications be used when psychotherapy is indicated. The plaintiffs maintain that these practices are examples of "artificial rationing [that are] inconsistent with good medical practice and caused unnecessary suffering and even death among patients...."
Threats to the system they spent years erecting, arising primarily from "dissatisfaction among providers, patients, and other members of the public," motivated these carveout companies to band together to devise a way "to perpetuate and maintain the system. . .in an effort to maximize their own profits at the expense of the [professionals filing this suit]," according to the complaint.
Lymberis, who has a private practice in Los Angeles, told Psychiatric News that she joined the suit after she was "deselected" by one of the defendants. She believes the action resulted from her refusal to follow the strict rules about submitting "psychmed" evaluations.
"I would not dictate the reports into their voice-recording system, from which I never received a copy [of the report]. Instead, I would type them myself and give a copy to the patient as well." Lymberis added that she is "now completely out of managed care."
The suit covers the actions during the four years preceding its May 26 filing with the U.S. District Court for New Jersey. The plaintiffs have asked the court for a jury trial.
This suit "is a marvelous opportunity for psychiatrists to play an important role in reversing the trend of the carveout companies to destroy psychiatry and arbitrarily restrict care," said Washington, D.C., psychiatrist Lawrence Sack, M.D., president of the Association of Private Practice Psychiatrists.
Joseph Sahid, one of the attorneys representing the mental health care providers in this suit, told Psychiatric News that he believes the outcome of the trial will redress wrongs the companies have done to patients as well as caregivers.
"Not only have providers suffered financial losses, but their patients have suffered incredible hardships by being denied health care services they desperately need," Sahid said.
Former APA president Harold Eist, M.D., said that if the plaintiffs succeed in the difficult task of proving their conspiracy allegations, "it will mean that a substantial sum of money will go to people who have been denied full and adequate care" by the managed behavioral care industry.
Sack stressed that the timing of the case bodes well for the plaintiffs to prevail. The chances of such an outcome "are especially favorable in light of the massive public protest" against the managed care industry that appears to be gaining momentum and support on Capitol Hill, he said. Eist stated that a decision that validates the plaintiffs' claims "would be a major moral victory for the American people and for APA."
The mental health care providers and organizations are asking the court to award triple the damages sustained by every member of the class on whose behalf they are suing. They also want the court to enjoin the managed care firms from continuing the "unlawful" practices that resulted from their "combination and/or conspiracy."
The companies targeted by the suit are Green Spring Health Services, Human Affairs International, Merit Behavioral Care, CMG Health, Options Healthcare, Value Behavioral Health, United Behavioral Health, Foundation Health Systems, and MCC Behavioral Care.
Sahid, who along with the other attorneys is taking the case on a contingency basis, emphasized that the success of the suit depends in large part on "psychiatrists, other mental health professionals, and company employees remembering that we need any relevant information or knowledge they have" about the companies' practices.
Sahid's phone number in New York City is (212) 308-5930.-K.H.