VOLUME 30 , NUMBER 9 October 1999
APA supports lawsuits to hold managed care accountable
By Kathryn Foxhall
Monitor staff
Little, if any incentive currently exists in the health-care sys- tem for assuring that quality is maintained, says Russ Newman, PhD, JD, APA's executive director for professional practice. Yet, considerable financial incentive exists for focusing on costs and profits."
To counter that fact, APA is supporting litigation against managed-care entities to change behavior in the industry, force greater attention to quality assurance and stop business practices that have no place in health care.
In his address at the Town Hall Meeting on Legal Accountability at APA's Annual Convention in Boston, Aug. 20 - 24, Newman said the association's aim is to offer more incentives for quality to a "health-care marketplace left to its own devices."
Newman told his audience to think of the investor-owned, for-profit, health-care company "which must maximize profits to survive, but which also desires to provide good care." That company, he said, learns that at times giving high quality care will necessarily mean cutting immediate profit. It also learns that reducing quality has no adverse consequences: The marketplace does not respond negatively and rarely is the company held liable by the legal system.
"Profit maximization wins," said Newman.
That's why APA is seeking judicial relief, he said: to hold managed-care companies responsible for the consequences of their decisions. He asserted that the cases APA is supporting will compensate not just the injured parties. More importantly, they will help prevent dangerous decisions in the future.
Case examples
Newman outlined several cases in which the association is working with plaintiffs. In New Jersey, several psychologists were terminated by a managed-care company without cause after being designated "not managed-care compatible." The termination is alleged, said Newman, to be the result of providing too much care or advocating for more treatment.
In the case, New Jersey Psychological Association v. MCC Behavioral Care, Inc., there are two key questions, he said:
A second case, in California, charges that managed-care companies ignored the up to 50 outpatient psychotherapy sessions per year called for under their own benefit plans, limiting treatment to three to four crisis intervention sessions. The case, California Psychological Association v. Aetna U.S. Healthcare of California, Human Affairs International and Adventist Healthcare, questions whether Aetna advertised a benefit it did not intend to deliver.
The lawsuit is an attempt, said Newman, to stop managed-care companies from making arbitrary care decisions, and to get them to leave decision-making to health professionals.
APA is also supporting an action brought by the Virginia Academy of Clinical Psychologists. The group contends that Blue Cross/Blue Shield of the National Capital Areas told its mental health practitioners in a letter that they had to accept drastic cuts in their reimbursement rates or resign (a violation of their contracts). However, the company had advertised "a large stable of qualified mental health professionals."
APA's Practice Directorate and the plaintiffs "find it hard to believe that the company did not anticipate that its actions would significantly reduce the number of providers in their network," said Newman.
APA's goals
These test cases, said Newman, were creatively brought to keep managed-care companies from using the "ERISA shield," a reference to the provision in the federal Employment Retirement Income Security Act, which precludes most suits against health insurers.
The "ERISA shield," he said, is among the defensive strategies that keep the industry from being held legally accountable. That is a primary reason why APA is fighting for passage of a comprehensive version of the "Patients Rights" legislation, now before Congress, he added. A House of Representatives bipartisan version of that bill would eliminate the ERISA shield and allow patients to sue in state courts if delay or denial of benefits causes injury.
But whether or not that barrier is lifted, APA will continue its work on legal cases Newman declared.
"We intend our litigation to underscore that managed-care companies are providers of health care, and do make treatment decisions, and do so influenced much more by the financial bottom line than by the health-care needs of their patients," he said. "This awareness, in turn, will be useful in ultimately stopping managed-care companies from usurping the treatment decision-making of health-care professionals."Y
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