The American Health Care System: A Difficult Journey

By: Nicola Truppin

Human interactions with the American health care system cause a multitude of disputes, complex and simple, for which traditional legal advocacy methods are inadequate.  While I concede that American jurisprudence has been beneficial to the health care system, in general, with regard to advocacy of, and checks and balances for, the rights of specific groups of people involved with our modern day health care industry, my long-term experience as a practitioner of heath care navigation has led me to believe that our legal system consistently fails to meet important individual needs of patients.

I’d like to share one example, from an innumerable list of similar client cases, of how a patient, forced into a mandated legal process to resolve a dispute with his health plan, was denied not only the respect and dignity owed to him as a vulnerable person with a chronic illness, but ultimately, the medical treatment that had kept him healthy and out of the hospital for over 10 years. (Facts of the case that could be used to identify any individual or organization involved have been altered in order to strictly preserve the patient’s right of privacy.)

The situation involves a number of parties: the health plan (let’s call it “ABC”); the patient (let’s call him Sam); the provider, in this case a Licensed Mental Health Counselor (let’s call him Peter) and Medicare (its real name). 

First, a mini-course in relevant health insurance realities:

◆         ABC health plan is a private, non-profit insurance organization, licensed by the state of Massachusetts to provide health insurance coverage for residents of the Commonwealth. 

◆         Medicare is the federal health insurance program for people who are 65 or older, under 65 and disabled, and certain others with specific health needs.

◆         ABC and Medicare enter into a contract whereby Medicare authorizes ABC to become what is called a Medicare Advantage Plan, in order to allow ABC to manage the health care coverage of Medicare beneficiaries who enroll in the ABC plan. 

◆         In addition to making available to ABC each beneficiary’s premium amounts for the various parts of Medicare, Medicare pays ABC an administrative fee based on the number of beneficiaries enrolled in ABC Medicare Advantage Plan. 

Sam was a 50 year-old gentleman who was diagnosed with Bipolar Disorder over 10 years ago.  He was deemed disabled because of his mental health diagnosis, and thus, was eligible for Medicare coverage.  He chose to enroll in ABC Medicare Advantage Plan, since he had been a member of ABC prior to becoming eligible for Medicare, and was comfortable with that organization.

After a long psychiatric hospitalization, Sam chose to continue treatment on an outpatient basis with a mental health provider in ABC’s network.  This provider, Peter, was a Licensed Mental Health Counselor (LMHC) and initially saw Sam at an outpatient clinic that was contracted with ABC to provide mental health services to ABC’s members, including those in the Medicare Advantage Plan.        

ABC, like most health plans, required Sam to choose a Primary Care Provider (PCP) whose role it was to oversee Sam’s health care and to make referrals to in-network specialists, as needed.  A referral is generally written notice to the health plan of a PCP’s decision that it is clinically appropriate for a patient to consult a specialist. Health plans generally accept the information without question and assign an authorization number, so claims from the specialist can be paid.

Sam’s PCP made the first referral to Peter in 2005 and continued to submit identical referrals annually for the next 10 years.  For each of those years, ABC assigned an authorization number to the referral and paid claims, in a seamless process.  Initially, Sam saw Peter once a week or more, as needed, but eventually cut back to every other week.  In January 2011, Peter became a private practitioner in his own office setting and remained a contracted provider with ABC.  Sam chose to continue to see Peter in his new office.  ABC continued to pay for Sam’s treatment with Peter.

Throughout the ten year period, Sam, an intelligent, professional man (formerly a vice president at a large corporation) worked diligently to manage his diagnosis through the dual modalities of a strong, consistent therapeutic alliance with Peter and an effective regimen of multiple medications. He hoped to return to work, eventually.

In July 2015, after ten years of continuously authorizing coverage and paying claims for Sam’s medically necessary treatment, ABC abruptly denied future coverage in response to the annual referral submission for the 2016 plan year. The basis for the denial was that Peter was not considered eligible to be paid for services to Medicare beneficiaries. 

That the significant success of Sam’s treatment primarily arose from the therapeutic relationship he and Peter developed over ten years was not a consideration.  During a series of internal appeals at ABC and then, at an administrative law hearing, ABC’s denial of coverage was consistently upheld, effectively preventing Sam from seeing his therapist, since he was financially unable to pay the costs himself.

It was at the administrative law hearing that ABC first admitted that their initial denial of coverage was made solely to rectify a major mistake it made four years earlier.  During a routine audit of ABC, Medicare discovered that ABC was not in compliance with a rule about payment to “medicare eligible providers,” when it paid for Sam’s treatment from January 2011 through July 2015.  Peter, as an LMHC in private practice and now outside of the original outpatient clinic setting, was not eligible to be paid by Medicare for services to Sam.  Medicare has a list of provider types that, by statute, are allowed to be paid by Medicare; Licensed Mental Health Counselors, among a few others, are purposefully left off the list.

When ABC learned about its error in 2014, it never attempted to notify Sam of the problem, and somehow, found funds unconnected to Medicare, to continue paying Peter for Sam’s treatment for an additional year, ostensibly for Sam’s sake, to prevent an abrupt termination of coverage.  However well-intentioned, this strategy left Sam and his therapist in the dark about the threat to Sam’s access to medically necessary treatment.  It was, indeed, a shock for Sam to receive written notice from ABC advising him that, in a few months, he would no longer have coverage for treatment with his therapist.

The relevant language in the denial letter made two succinct points: 1). LMHC’s were not eligible to be paid for treatment of Medicare beneficiaries. 2). There were many providers in the plan’s network who could treat Sam’s condition. (As if the consequences of the switch would be negligible).

In taking defensive action to extricate itself from the threat of a financial penalty imposed by Medicare, ABC ignored the obvious clinical ramifications to Sam and made no attempt to address Sam’s important interest in maintaining treatment with his long term therapist. When Sam availed himself of the required two levels of internal appeal and subsequent administrative law hearing, his pleas for the decision-makers to give significant consideration to his clinical history and the medically-accepted concept of therapeutic alliance were disregarded. 

There was no framework in either process to deal with an individual patient’s specific medical needs; in fact, neither the member contract, the internal documents directing appeals decision-making, nor the Medicare manual guiding administrative law judges made the slightest reference to the imperatives of specific, on-going, medical treatment for an individual.

Sam found himself in an absurd situation; there was a complete disconnect between the rules for review and the only argument Sam could make. The denial and rules for review were based solely on a contract between ABC and Medicare but Sam’s argument needed to be about the deleterious effect the denial would have upon his physical and mental health. The rules for review prevailed and the Administrative Law Judge, using the contract language, upheld the denial.  ABC made the gross contractual error, but Sam, and other members like him, were the only parties severely penalized.

How could Sam and other patients be better served when the complexities of managed care cause such harm? How could organizations whose existence depends on the provision of medical care to patients embrace the ethical considerations of individuals’ medical needs?

For those of us committed to alternative dispute resolution, one answer is the process of mediation.  In this context, the interests of the patient and the interests of the health plan are considered equally.  There is no inherent bias towards the organization and there is no artificial limitation on what may be considered in crafting a resolution. 

Mediation emphasizes problem-solving and fostering of relationships.  It creates a basis for shifting from standardization toward individualization, especially in cases where there is potential or actual harm to patients.  It would be a more humane and patient-centered method of resolving the inevitable disputes that arise in our extremely convoluted and often impenetrable health care system.

Certainly a more flexible approach, one that employs a variety of methods, would be more effective in responding to the complexities of our health care system and individual patient needs than the limitations of the traditional legal status quo.