How APA works with states to set legal precedents

Before APA works with a state psychological association to develop a potential lawsuit against a managed-care company, it uses 'a strict and strenuous' review process, says Shirley Higuchi, assistant executive director of APA?s legal and regulatory affairs.

The first step, she says, is for APA Practice Directorate attorneys to review state laws and regulations to see if the legal climate will support a particular case. 'A case is strengthened if the state laws have favorable provisions pertaining to quality-of-care issues such as consumer protection laws,' Higuchi says. For example, New Jersey regulations provide for health-care professionals to advocate for their patients regarding utilization management determinations.

Several state court rulings bolster arguments made by the New Jersey Psychological Association (NJPA) in its suit against MCC Behavioral Care, Inc. (MCC). In 1996, NJPA filed a suit claiming that seven psychologists were labeled 'managed-care incompatible' for advocating for more sessions for their patients than the managed-care company was willing to provide, and they were illegally dismissed as providers for MCC (see article on page 20).

Another court ruling bolstered the psychologists? claims: The New Jersey Supreme Court ruled in 1980 that 'whistleblowers' may sue their employers if they can show that they were fired for conduct protected by public policy. 'This ruling relates to the plaintiffs? argument that providers were dismissed from the managed-care company because they were intent on seeing that their patients get the care they need, even if it exceeded the allowable, financially driven limit on patient care secretly set by the managed-care organization,' Higuchi says.

New Jersey courts also have repeatedly ruled that physicians cannot be removed from hospital staffs without a fair hearing. This ruling relates to the plaintiffs? argument that health-care professionals shouldn?t be denied the opportunity to earn a living without due process protections, says Higuchi.

For APA to be interested in such a case, the state?s psychological association must also see the case as a priority for its membership and be committed to taking on this type of battle, Higuchi says. Throughout the process, APA works directly with the state psychological association to develop the case and contribute funds to cover outside legal costs, Higuchi says.

In Tennessee, for example, the state psychological association is researching whether it has a legal case against a Tennessee managed-care company that appears to be undermining patient care and failing to honor its bankrupt contractor?s obligations to reimburse for patient services. The Tennessee Psychological Association (TPA) raised money to explore that matter, and APA?s Committee for the Advancement of Professional Practice (CAPP) is providing TPA with a $5,000 grant to pursue legal research on the case. CAPP?s grant money was used to hire an outside law firm familiar with that local court?s rules, Higuchi says.

APA also works with the state association to hire outside counsel. For example, when it was time to hire outside counsel for the New Jersey case, APA

provided NJPA with a list of recommended firms and NJPA interviewed and selected counsel from that list, Higuchi said. APA helped NJPA to negotiate a beneficial financial agreement with the law firm.

Last year when MCC and the terminated psychologists entered arbitration to settle the contractual issues in the suit, APA, NJPA and the outside law firm strategized over how to move the case along, Higuchi says. The groups agreed to drop the contractual issues so they could move forward with their primary goal?having the court address the influence managed care has on the delivery of mental health care.

'We could not do this without APA,' says Lorryn Wahler, NJPA?s executive director. 'The attorney we are using in New Jersey is an experienced litigator, but he doesn?t have all the knowledge about managed care that the Practice Directorate staff has.'

?Lisa Rabasca