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Trying the 'squeaky wheel' approach

May 1, 2006
by MICHAEL LEVIN-EPSTEIN
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Frustrated providers are challenging payers on what they consider unfair reimbursement policies

When Seabrook House, the largest nonprofit alcoholism and drug addiction treatment center in southern New Jersey, terminated its provider contract with United Behavioral Health (UBH) this past November, it shocked the big-time managed care organization (MCO). But according to experts in the behavioral health field, Seabrook's actions reflect growing addiction treatment provider frustration with MCOs over patient care denials.

“I never got more attention from UBH than the day we sent out the press release announcing the end of our relationship,” says Matt Wolf, vice-president of business operations at Seabrook House. “They were quite upset.”

UBH spokeswoman Ann Fleischauer agrees. “Although Seabrook House had indicated they were severing their relationship, we were optimistic that it would be worked out,” she explains. “They had been one of our facilities for a number of years. We wanted a different outcome.”

While not specifically familiar with Seabrook's situation, Mohit Ghose, a spokesman for America's Health Insurance Plans, notes that health plans do “generally work with, and try to resolve disputes with, their contracted providers.”

Seabrook's problems with UBH involved definitions of “inpatient,” “residential,” and “rehabilitation” in determining whether patients would be treated and at what levels. UBH's definitions appeared to change arbitrarily, according to Wolf. “Sometimes they applied, and sometimes they didn't,” he reports. “They never seemed to provide the patient the level of care we were asking for.”

Wolf cites the case of a young woman addicted to Percocet. The woman was denied admission for rehabilitation at Seabrook because UBH defined the facility as a “residential rehab” provider, although the contract between UBH and Seabrook doesn't contain the term “residential,” says Wolf. The agreement contains the terms “inpatient” and “rehab,” but UBH managers have authority to determine whether “inpatient” care is “residential” care and, therefore, outside the guidelines for authorization, according to Wolf, noting that Seabrook's residential rehab status did not necessarily mean it was approved for residential care. No one at UBH, he says, gave him a clear answer on the differences among the three levels of care.

UBH declined to comment on Wolf's remarks.

In one respect, Wolf says, Seabrook's fight with UBH is only the latest in a long series of disputes with MCOs (Seabrook House has terminated its relationship with other MCOs, as well). “We don't have the time or the resources to fight like we would like to fight. But we're quite verbal. Because we have always been a squeaky wheel, we get their attention,” he explains. That attention seeking can be seen in letters to regulators and legislators on such issues as MCOs’ slow handling of claims. “Claim handling has become a lot better. But now they're denying authorization,” Wolf asserts.

Indeed, Seabrook's situation isn't unusual, says Ronald J. Hunsicker, DMin, president and CEO of the National Association of Addiction Treatment Providers. “It's an example of a larger problem. What's different is that organizations like Seabrook now are simply deciding not to play the game anymore,” he explains.

Seabrook's experience reflects systemic problems, according to Dr. Hunsicker. The key issue, he explains, is that behavioral health, and therefore addiction treatment, often is carved out of healthcare plans and placed with a handful of national and/or several smaller regional managed care plans.

A decade ago, that might have been a judicious decision. In the 1990s, Dr. Hunsicker points out, behavioral health services still were considered outside mainstream care, and carving out might have facilitated payment for services. But today, he explains, addictions are considered chronic diseases, and behavioral healthcare is more mainstream.

While service through carve-out companies may reduce costs of emergency room visits posttreatment, national managed behavioral health organizations don't participate in the resulting savings, which instead benefit the primary healthcare firm. “Carve-out companies are paid per diem fees per enrollee—no matter how much money is spent on treatment. So their profit comes from money not spent up front,” Dr. Hunsicker asserts. “The cards are stacked against us right now, the way the dollars are managed.”

Dr. Hunsicker notes that managed care has been around for almost two decades. “Most of the waste has been eliminated. Most of the dollars have been squeezed out. But you still have national companies that have to deal with stockholders. They're not in it to provide some kind of altruistic service,” Dr. Hunsicker comments. “Obviously, one way to do that is to limit expenses. The primary expense is treatment. So we go around and around about things. We play with language. We just keep playing that little shell game,” he explains.

Seabrook's experience also points to a larger dilemma, according to Dr. Hunsicker: Addictive conditions often do not have parity with physical conditions in health plans. “In many policies,” he notes, “there are annual and lifetime caps on visits and treatments. We have been working at the federal level to get antidiscrimination legislation. We're not interested in a mandate but, if you're going to provide coverage, don't put unusual limits on it.”

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