NAMI SCC Website

HMOs Losing Mental Health Appeals 

May 13, 2002, 1:04AM

Report says 70 percent of denials are overturned by independent reviews

By POLLY ROSS HUGHES

Copyright 2002 Houston Chronicle Austin Bureau AUSTIN -- A striking pattern of insurers wrongfully denying mental health care has emerged in a new study showing that Texans who appeal HMO decisions usually win. More than half of all HMO denials for medical care were overturned when submitted for an independent review, but that spiked to 70 percent for mental health care, according to the Consumers Union report.  

"The important thing about the mental health and substance abuse issues is they are so difficult," said Lisa McGiffert, a Consumers Union health policy analyst. "I think often families are worn out and they feel pretty hopeless that there's any real help. The thing this report shows is there is help," she said. 

The Texas Department of Insurance can assign an independent physician to review a contested denial at the patient's request. Usually two or three appeals by health providers will have already been denied by the HMO. 

The idea was inserted into a 1997 law passed by the Legislature which made Texas the first state in the nation to allow medical malpractice lawsuits against HMOs. Former Sen. David Sibley, R-Waco, authored the bill, arguing that the act of refusing to pay for treatment was in fact practicing medicine. The study reviewed 263 cases in which HMOs denied treatment during six months of last year, from March to September. When patients exercised their right to appeal the HMO, 144 denials were overturned in part or completely.

The reviews are conducted by doctors who have been deemed to have no conflict of interests or monetary interest in the outcome. Their sole determination is whether a procedure denied is actually medically necessary.

Certain categories of appeals were most commonly requested. Denials for mental health or substance abuse treatment made up 100 of the cases reviewed, while 60 appealed denial of longer hospital stays or treatment of physical illness. Nineteen involved prescription drugs and 16 concerned surgical treatment for obesity.

"Mental health and substance abuse treatment constitute only 8 percent of the nation's medical care costs," the study noted. "Yet, these conditions together accounted for 38 percent of care denials sent for review in our sample." Of the reviews studied, 46 involved treatment for mental illness, of which 32 denials by HMOs were overruled.

Within the mental health category, independent reviewers overturned 7 out of 11 denials of treatment for such eating-related ailments as anorexia nervosa, bulimia nervosa and binge eating disorder. The study said that HMOs often chose to cut short hospital stays for patients with eating disorders based primarily on how much weight they had gained.

However, those who were released too soon often returned in worse condition. The report describes a case in which the independent review organization agreed with the HMO decision to release a woman from the hospital. At a residential treatment center, however, she became panic-stricken when she spotted food in the refrigerator. She began bingeing and purging again, became increasingly depressed and attempted suicide.

"There comes out of this a real question about the decisions being made related to the types of ailments that bring together mind and body," said Kathy Mitchell of Consumers Union, who worked on the study as an editor. HMOs also had a high rate of overturned denials -- 70 percent -- for gastric bypass surgery to treat severe obesity.

The independent reviews also overturned 59 percent of insurer denials for substance abuse treatment. Kim McPherson, a public policy analyst at the Mental Health Association in Texas, said the Consumers Union's discoveries regarding mental health denials confirms what her group often hears anecdotally.

"Our suspicion has been, in the desire to save money, plans are looking for the low fruit on the trees," she said. "It definitely looks as if the industry's targeted mental health as a place where they can achieve health savings on the backs of the most vulnerable people in the system."

McPherson said it appears that the prevailing stigma and discriminatory attitudes surrounding mental illness might lead HMOs to believe it is one area where belt-tightening won't cause a consumer or employee backlash. Leah Rummel, executive director of the Texas Association of Health Plans, attributed the higher rate of overturned denials to the fact that mental health is a more nuanced and complex form of illness.

"Mental health in itself is very subjective. They are very complicated cases," she said. She said, when appealing to an HMO, providers must explain the dangers in moving a patient from inpatient to outpatient treatment. Sometimes, it's a communication breakdown.

"The one thing this does show, in most cases, the managed care companies are providing services, and members generally are happy," Rummel said. "Those who do not receive services are probably minimal."

Requests for independent reviews are surprisingly rare, but consumer advocates think patients likely don't know their rights and the provider might not either. "If I was running a health plan, I'd want to look at these independent review statistics. If I was getting overturned more than half the time, I could be doing something wrong," McGiffert said. "Part of it is counting on a bunch of people not following through."

5/7/02 -- A REPORT ON THE STATUS OF HMO INDEPENDENT REVIEW PROCESS IN TEXAS WAS RELEASED TUESDAY MORNING BY CONSUMERS UNION IN AUSTIN, TEXAS.

For those of you interested in mental health services, the report findings should be of particular interest.

If you would like a printed copy, please contact our office at 477-4431 ext.110 and we will mail it to you. (Correction on Page 11 pie chart: should read 41% Upheld and 59% overturned)

 
FOR IMMEDIATE RELEASE
May 7, 2002

FOR MORE INFORMATION
Lisa McGiffert or Rafael Ayuso
512) 477-4431; ext. 115 or 114, respectively
www.consumersunion.org

Study: HMO Independent Review process helps  consumers, but some medical conditions raise red flag

55% of consumers who appeal HMO decisions prevail; 70% for mental illness

AUSTIN, TX -- Texas consumers benefit when they ask for independent review of their health maintenance organizations' care denials, a Consumers Union study released today says. But the rate of overturned cases for certain medical conditions indicates that some consumers may not be getting the health care coverage they need. Among the areas are mental illness, gastric bypass, eating disorders and substance abuse care.

"The independent review process is helping consumers gain access to needed medical care and providing necessary oversight of HMOs," said Lisa McGiffert, senior policy analyst with the Southwest Regional Office of Consumers Union. "However, the large number of appeals in areas like mental illness and the likelihood that the independent reviewers would overturn these denials raises a red flag. HMOs may need to reevaluate some of their policies and guidelines to improve their coverage and prevent unnecessary appeals."

The study can be downloaded from
http://www.consumersunion.org/health/iro/review_exe.htm.

It evaluated 263 appeals filed with Texas Department of Insurance during a six-month period, from March 22 through September 26, 2001. This sample included all three Independent Review Organizations (IROs) in Texas and 63 health plans.

The study found that 55% of the consumers who appeal their health plan denials to an independent reviewer received some additional treatment, in other words, the denials were fully or partially overturned. But for treatment for mental illness, the rate was much higher: 70 percent of denials were overturned or partially overturned.

Despite the strong likelihood of getting additional treatment, only a small number of consumers are appealing their cases. Although HMOs make thousands of coverage decisions a week, independent reviewers settled a total of only 587 disputes in 2001. To encourage more widespread use, McGiffert recommended that the Texas Department of Insurance review all notices sent to persons being denied care so it is clear to consumers that the review is independent of their health plans and can help them get the care they need.

The report indicates there may be many reasons why few consumers are appealing their HMOs' care denials. They may be denied access to independent review because the denial of care was done retrospectively or they are insured by an employer self-funded plan (known as ERISA plans) which only voluntarily participate in independent review. Health plans may be making better coverage decisions now that independent reviewers can evaluate these cases. And, it could be that few consumers have the time and confidence in the system to pursue an independent review after a discouraging internal review process.

"The bottom line is that many consumers are either unaware of the independent review process or are frustrated by it, and they may not be getting the health care treatment they deserve," McGiffert said.  

The study concludes that after five years in existence, the Texas independent review process balances the medical needs of consumers with the need to review costly care. Consumers Union recommends:

McGiffert said other states can benefit from Texas' experience with independent review. "Independent review saves our health care system money," she said. "It encourages HMOs to make the right decision early on and has a deterrent effect on lawsuits. Above all, it contributes to patient safety and well being."

# # #

Consumers Union, publisher of Consumer Reports, is an independent, nonprofit testing and information organization serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health nutrition, and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect consumers.

Opinions expressed in this web site do not necessarily reflect the views of NAMI Santa Cruz County, NAMI California or any affiliated organizations.  We attempt to present a balanced perspective on issues by presenting multiple viewpoints.

Copyright 2005 National Alliance for the Mentally Ill Santa Cruz County, All Rights Reserved.

FAIR USE NOTICE: This may contain copyrighted (©) material the use of which has not always been specifically authorized by the copyright owner. Such material is made available to advance understanding of ecological, political, human rights, economic, democracy, scientific, moral, ethical, and social justice issues, etc. It is believed that this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml  If you wish to use copyrighted material for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.