January 15, 1999

Blue Cross/Blue Shield of the National Capital Area and its CapitalCare HMO have been giving out inaccurate and misleading information about the extent of mental health care coverage in their managed care plans, according to a lawsuit filed against them in December by the American Psychological Association.

The suit, filed in Superior Court of the District of Columbia, alleges that one of the Washington, D.C., area's largest health insurers has been engaging in "fraudulent and unlawful conduct" by advertising the availability of certain services for its 765,000 beneficiaries and then declining to approve reimbursement for those services.

"This type of action by managed care companies demands recourse, because their position is unfair to both patients and professionals," former APA president Harold Eist, M.D., told Psychiatric News. APA "should consider joining the psychologists and any other organization whose goals we share" in using the legal arena to fight managed care abuses.

Eist, who is chair of the committee that administers the APA Litigation Fund, explained that it is "critical that we protect the doctor-patient relationship, which is our primary healing modality. Lower professional fees impair the ability of physicians to provide adequate care." He added that cutting reimbursement to physicians and other professionals "goes against the public interest, and so society must take steps, such as this type of lawsuit, to remedy the situation."

APA is involved in lawsuits almost identical to the one recently filed by the psychologists against the Washington, D.C.-area Blues. APA is challenging, for example, similar managed care actions against Blue Cross/Blue Shield in Maryland, New Jersey, and Pennsylvania. APA and its Litigation Fund are always alert for new legal opportunities to challenge managed care excesses that compromise patient care on a widespread basis, Eist noted.

In addition to suing Blue Cross and its Washington, D.C., HMO, the psychological association and its allies are suing behavioral health care carveout companies and contractors who evaluate and manage mental health care for Blue Cross in the Washington, D.C., region. Named in the suit are ValueOptions Inc., Value Behavioral Health Inc., and Health Management Strategies Inc.

The psychologists' suit emphasizes that such actions by Blue Cross/Blue Shield and its HMO hinder patients' access to care to which they thought they were entitled and can result in beneficiaries' receiving inadequate levels of care.

The Virginia Academy of Clinical Psychologists, six individual clinical psychologists, and two of the HMO's patients have joined the American Psychological Association as plaintiffs in the suit.

The psychologists maintain that patients enrolled in the HMO "are promised certain benefits that are not delivered, including a considerable choice of treatment providers from a large, stable panel of qualified mental health providers. Also, purchasers and patients are promised that each provider will provide appropriate treatment of up to 20, and in some cases up to 52, treatment sessions per year."

The suit alleges that the insurer took steps to guarantee that the plan's beneficiaries are blocked from receiving these promised levels of treatment benefits.

As part of its strategy, the plaintiffs charge, the insurer and its managed care carveout contractors informed members of its mental health provider panels in a "take it or leave it" letter that they could elect either to accept greatly reduced reimbursement levels or to resign from the panels. Blue Cross announced that these reimbursement cuts would range up to 35 percent. If mental health care providers chose the resignation option, the consequence of their action would have been to interrupt the mental health treatment of a substantial number of patients, the suit points out.

One plaintiff, John Gualtieri, Ph.D., said, "Providers were being forced out of the network at a time-the holidays-when their patients typically needed the most support."

The suit charges as well that Blue Cross pressured provider-panel psychologists to limit beneficiaries to 10 outpatient visits regardless of the number of sessions that plan information stated were available and without consideration of how many sessions the provider determined would be needed to treat a particular patient's mental disorder.

"This is yet another example of the managed care company, not the doctor, controlling the treatment of patients," said Russ Newman, Ph.D., J.D., in a December 11 statement announcing the suit. "It's the financial bottom line, not patient need, that is usually the determining factor." Newman is the American Psychological Association's executive director for professional practice.

The American Psychological Association and its California branch have filed a similar lawsuit in Los Angeles charging that Aetna U.S. Healthcare Inc. of California and its behavioral health care contractors have disseminated inaccurate information about mental health care benefits and cut costs at the expense of patient care.