Section 3: The Impact of Managed Behavioral Health Care on Core Ethical Principles

Dr. Furl has several questions regarding the proposed contract. First, he is uncertain whether he can provide the services he is contracting to provide for the money available. Second, he believes that he may be able to alleviate some of the financial risk he is about to incur by using civil commitment processes to transfer the responsibility for care to the State hospital, but he questions whether there is any risk in using such a strategy. Third, he is concerned about a contractual provision that would prohibit him from revealing to clients the fact that the number of sessions he can make available to them is limited informally by Prevailing Winds to five per client. He seeks your advice regarding whether he should sign the contract.

Managed care may change the incentives available to caregivers because it often relies on techniques that check the exercise of professional judgment by treatment providers (for example, utilization review, prior authorization, and other gatekeeping requirements). In addition, the emergence of managed care has caused or reinforced a number of trends in the organization of health care services. These include a shift of practitioners from small private practices to working as employees or contractors to larger entities; the growing integration of the health care industry through mergers and acquisitions, as treatment providers seek to gain the economic leverage necessary to compete in a highly "corporatized" health care environment; continued competition on the issue of price among managed behavioral health care companies competing for contracts in both the publicly and privately financed sectors; and the importance of the contract as the vehicle governing relationships between payers and providers and between providers and clients.

These changes affect the treatment relationship in at least two fundamental ways. First, the relationship between treatment provider and client in many instances has become a three-party relationship involving the treatment provider, the payer, and the client. In the past, a treatment provider provided treatment, and the client, either through his or her own resources or public or private insurance, was responsible for payment. The client, in turn, may have had a contractual relationship with an insurance company, but the payer typically had no direct relationship with the provider of treatment. However, in the Prevailing Winds vignette described above, Dr. Furl, if he signs the contract, will have contractual obligations to Prevailing Winds in addition to the ethical and legal obligations he has to the clients who come to him pursuant to that contract.

Second, the contract Dr. Furl has been asked to sign may create incentives to underutilize services. The contractual amount per member per month may be low compared to Dr. Furl's costs, and if he has underestimated the number of employees who will come to him for treatment he may be placed in financial jeopardy.

These changing relationships, and the potential conflict between ethical obligations and financial realities, also create legal vulnerability for the treatment provider in some circumstances. The next section of this monograph discusses the impact of managed behavioral health care on the fiduciary responsibility of treatment providers, and the law's response.

The fiduciary responsibility of treatment providers to individual patients and managed behavioral health care

Linda Major, a 15-year-old with a history of emotional problems and substance abuse, is admitted by her parents to Home Free, a for-profit, free-standing psychiatric hospital. Her physician finds her case quite complex, and orders a series of laboratory tests. The test results are due May 14. However, Ms. Major's insurance will provide benefits only until May 13. The hospital business office sends a note to her physician, advising him of this fact. The patient is discharged on May 13, and commits suicide 3 days later. Her parents sue the hospital, arguing that the hospital had a policy of discharging patients when their insurance expired, regardless of continuing clinical needs.

In this vignette, Linda Major's family sues the hospital for negligence in her discharge, alleging that payment issues caused the hospital to ignore the patient's interests. A case alleging negligence or malpractice is one type of case that might be brought against a treatment provider in either a fee-for-service or managed care environment; this particular vignette deals with the consequences of a lack of reimbursement.

A second type of case that might be brought is a lawsuit for breach of contract, for example, against the payer (or in the case of a health maintenance organization, the payer-provider). This type of case would claim that benefits promised under the contract governing services had not been forthcoming.

There are comparatively few of either type of case in managed care settings. In large part, this is because of a Federal law (the Employee Retirement Income Security Act, or ERISA) that makes the maintenance of such lawsuits difficult. However, those cases that have been resolved emphasize the preeminent value that the courts place on the fiduciary duties of treatment providers, duties rarely if ever diminished because of a lack of financial reimbursement.

In a lawsuit for negligence, the plaintiff has to prove four things. First, he or she must demonstrate that the defendant had a duty to the plaintiff. As a general rule, a duty exists when the patient-therapist relationship is established. The overarching duty of treatment providers is to practice according to prevailing professional norms. The plaintiff must then show a breach of the duty, that is, that the defendant's practice fell below the standard of the profession. It has sometimes been difficult in behavioral health to determine precisely what is the standard of care, because of the eclectic nature of behavioral health treatment, though with the emergence of practice guidelines some of this difficulty should be ameliorated in the future. The third and fourth elements are that the breach of the duty caused the plaintiff damages. Damages that may be recovered include but are not limited to medical bills resulting from the injury, lost wages, and pain and suffering.

The first case exploring liability questions in a managed care setting was Wickline v. California (239 Cal. Rptr. 810 (Cal.Ct.App.1986)). Lois Wickline had been hospitalized for an obstruction of the terminal aorta in her leg. The Medi-Cal program, which was paying for her care, authorized surgery and the 10 days of care requested by her physician. Near the end of the 10 days, her physician sought reimbursement for an additional 8 days of care but was given 4. Wickline was discharged within the 4 days, suffered additional complications, and eventually had to have her leg partially amputated.

She brought suit against the Medi-Cal program, arguing that its reimbursement decisions had caused her to be discharged prematurely. The court said that third-party payers "can be held legally accountable when medically inappropriate decisions result from defects in the design or implementation of cost-containment mechanisms as, for example, when appeals made on a patient's behalf for medical or hospital care are arbitrarily ignored or unreasonably disregarded or overridden" (p. 819). However, because the physician had not used the appeals process created by Medi-Cal to appeal adverse decisions, the court said it would not impose liability in this case on the payer (the court in a later case said that there was no legal duty to appeal on the part of the provider). More important, the court noted that while the physician may have been "intimidated" by the Medi-Cal program, "he was not paralyzed by [its] response nor rendered powerless to act appropriately...If, in his medical judgment, it was in his patient's best interest that she remain in the acute care hospital setting for an additional four days...[he] should have made some effort to keep Wickline there...Medi-Cal was not a party to that medical decision and therefore cannot be held to share in the harm resulting if such decision was negligently made"(p. 819). In short, while a payer could be found liable, primary responsibility for care decisions rested with the treating practitioner.

In a second case, Wilson v. Blue Cross (271 Cal. Rptr. 876 (Cal.Ct.App.1990)), the same court found again that in some cases a payer could be liable. This was a psychiatric case involving the care of Mr. Wilson, hospitalized for depression, drug dependency, and anorexia. His physician believed he needed 3-4 weeks of hospitalization, but the payer authorized 10 days. After the physician determined from Mr. Wilson and his aunt that no additional sources of payment were available, Mr. Wilson was discharged after 10 days of care and killed himself approximately 3 weeks later. His estate brought suit against the payer, claiming that it had breached its insurance contract with Mr. Wilson. The court of appeals ruled that the case could go to trial, given "substantial evidence" that the payer's decision was a "substantial factor" in Mr. Wilson's death, because it may have resulted in his premature discharge.

While these cases suggest that it is possible legally for a payer to be held partially liable in some cases, it is clear that the treater retains ultimate responsibility for care even in the face of a lack of reimbursement. A recent case, Muse v. Charter, illustrates this point. In this case, similar to the Linda Major vignette above, a suicidal 16-year-old was hospitalized. His physician ordered blood work done, which was to be performed on July 13 with the results returned July 15. However, insurance expired July 14, and although the parents had signed a promissory note to make good on subsequent charges, the patient was discharged with instructions to receive care from a local mental health clinic. Approximately 2 weeks later, he killed himself. The court of appeals, in a decision later upheld by the North Carolina Supreme Court, upheld a jury verdict against the defendant, including a finding that the defendant had acted in reckless disregard of the rights of others. The court's ruling was based on the finding that the defendant "had a policy or practice which required physicians to discharge patients when their insurance expired and that this policy interfered with the exercise of medical judgment" (Muse v. Charter Hospital, 117 N.C.App. 468, 452 S.E.2d 589, 1995).

As the Muse case suggests, an individual presenting potentially serious clinical and risk issues cannot simply be discharged because insurance has expired. This is because the continuing fiduciary responsibility of the treater continues even though reimbursement may end. Another court, responding to provider challenges to a managed behavioral health care plan initiated by General Motors, used language that to date appears to characterize the views of most courts:

[T]he purpose of the [managed care plan] is to determine in advance whether the... plan will pay for the proposed treatment. Whether or not the proposed treatment is approved,the physician retains the right and indeed the ethical and legal obligation to provide appropriate treatment to the patient....Plaintiffs say, in effect, "irrespective of any obligation I have to my patients and to my profession, my judgement as to what is in the best interests of my patients will not be determined by the exercise of my medical judgment, but by how much I will be paid for my services." Plaintiffs are saying in effect, "Since I am weak in my resolve to afford proper treatment, [the] preauthorization program would induce me to breach my ethical and legal duties, and the court must protect me from my own weakness." In other words, protect me from my own misconduct. This is strange stuff indeed from which to fashion a legal argument (Varol v. Blue Cross, 708 F.Supp.826, 831-833 (E.D.Mich.1989)).

These opinions do not mean that any person, once in treatment, has a lifetime guarantee of treatment. They do suggest that continuing, serious needs must be tended to, either by the treater or through adequate alternative care, regardless of the availability of reimbursement. These cases also reinforce the view, expressed below in the section on economic informed consent, that the impact of benefit design on treatment, as well as the conditions under which treatment may end (one condition might be a failure to pay for services) should be discussed with the client at the beginning of treatment, not when a clinical or reimbursement crisis emerges.

The fiduciary obligation of the provider to individuals other than the client

Traditionally, health care professionals have not been asked to consider the overall allocation of health care resources in the context of individual treatment decisions. Rather, as discussed above, ethics and law have insisted that the health care professional focus on the needs of the individual client. While managed care has not changed that ethical or legal mandate, it may cause the clinician to confront more sharply a potential conflict between individual and group need.

Consider, for example, the case of an individual enrolled in a capitated managed care plan and being treated by a psychiatrist. Assume the individual does not wish to take medication, and is not particularly forthcoming during therapy. Assume also that the psychiatrist concludes, given the client's nonadherence to suggested treatment, that the client may require hospitalization. As a result, the psychiatrist may have to expend more resources than necessary clinically to provide treatment, resources that could otherwise be expended on other needs of individuals enrolled in the plan. In addition, given that the psychiatrist is providing treatment in a capitated setting, the need to hospitalize this patient may increase the financial risk to the psychiatrist. In short, managed care may make it very clear that health care resources are finite, and the reluctance of one enrollee to use the least costly treatment available may result in treatment that reduces the amount of resources available to other plan enrollees.

There are situations in which health care resources legitimately may be withheld. One example is in a case of "medical futility" where further intervention would be of no value. Cases of "medical futility" in this sense rarely if ever arise in the treatment of mental illness and substance abuse. However, there are situations where further intervention may be of very limited value, and may not perceptibly alter outcome. In such cases, is there an obligation to withhold resources to make them available to other people?

James Sabin (1994), a psychiatrist who has written frequently and well on the ethical challenges confronting behavioral health care providers in the era of managed care, suggests that treatment providers must look beyond the needs of the individual to societal interests. He points out that the Preamble to the American Medical Association and American Psychiatric Association's Principles of Medical Ethics states that "a physician must recognize responsibility not only to patients but also to society." He argues that this creates a duty of "stewardship" regarding finite public resources, and that fee-for-service reimbursement previously enabled providers to ignore the responsibility to act as stewards. In his view, reconciliation of the conflicts between acting as fiduciary and as steward is the core emerging ethical question in managed care.

In addressing this issue in practical terms, Sabin urges the clinician to address openly and honestly with a client the costs of one alternative form of care versus another. His suggestion that caregiver and client engage in an ongoing dialogue is useful. It mirrors Jay Katz's view of informed consent as a conversation between treater and patient, in which the parties bring their respective strengths to the treatment relationship (the caregiver's professional knowledge, the client's self-knowledge) in order to reach the best possible outcome for the client. However, it should also be noted, as Sabin acknowledges, that most training of health care professionals focuses on the fiduciary responsibility to the individual client, not the notion of stewardship of a pool of finite resources. In addition, as the earlier discussion makes clear, the courts continue to insist on the primacy of the fiduciary duty to the individual; at this point, it is difficult to imagine a court endorsing a decision by a clinician to forgo a particular treatment for a client with significant needs based on concerns about the impact of the cost of that treatment on the prospective availability of resources for others enrolled in the same plan. In short, balancing the obligations of the fiduciary and the steward in a satisfactory way seems difficult in the current legal and ethical environment. It may be, as Sabin suggests, that "once we finally recognize and truly accept the need to integrate fiduciary and stewardship values and to work constructively with the inevitable tensions that arise, we will be able to get down to practical implementation of ethical approaches." However, attaining that outcome will require considerably more work by clinicians, managed care plan administrators, and others concerned with the overall allocation of health care resources.

The fiduciary obligation to the client and financial incentives in managed behavioral health care

Dr. Russ Fix, a clinical psychologist, works for New Life Health Maintenance Organization. Dr. Fix is paid a salary by New Life. In addition, New Life sets aside a reserve fund each year to pay for psychiatric hospitalization. At the end of the year, unexpended funds from the reserve are distributed to Dr. Fix and his colleagues as bonuses, with clinicians who hospitalized the fewest patients, adjusted for case mix, receiving the highest bonuses. Dr. Fix recently decided not to admit a patient who he believed might have been helped by hospitalization, choosing to continue the person in therapy even though her condition had deteriorated somewhat. Dr. Fix believes that his decision was not motivated by financial concerns, but he has doubts about his ability to maintain a separation between clinical conclusions and finances. He seeks advice from you as his colleague regarding ethical and legal issues that the reserve arrangements might create.

Most managed care plans create incentives to direct clinical behavior. In many plans, the incentives are designed to minimize the use of more expensive services (in other plans, as discussed below, there may be so little money in the contract that providing any but the most minimal service becomes problematic). It is not unethical for a clinician to utilize the least expensive, clinically appropriate services available. However, an ethical issue does arise if financial incentives unduly contaminate clinical judgment.

In the vignette above, unexpended money from the reserve fund that pays for hospitalization is used as bonuses to the clinicians who must determine whether hospitalization is warranted. In a similar case involving a reserve fund set aside for specialty care, a court ruled that the estate of a person who had died from uterine cancer could proceed to trial against the HMO because it appeared that the financial incentives to the physician in that case created incentives to withhold care that was clinically indicated. This ruling suggests that clinicians who sign contracts with financial incentives tied to not using particular services need to satisfy themselves that the incentives do not cloud clinical judgment. As noted above, both legal and ethical principles dictate that clinicians attempt to wall off clinical judgment from their own financial interests.

The Federal Government recently attempted to address this problem in the context of physician reimbursement plans. The Department of Health and Human Services in early 1996 adopted regulations that place certain limitations on the incentives made available to physicians in prepaid health care organizations treating individuals enrolled in Medicare and Medicaid managed care plans. The regulation requires the plan to disclose to the Federal Government or State Medicaid agency provisions that create incentives for physicians to not use particular services. In addition, the rule prohibits plans from paying incentives to physicians to limit or reduce medically necessary services to a particular enrollee; requires plans that put physicians at "substantial risk" (defined in part as plans in which more than 25% of the potential payment to physicians is at risk for services it does not provide) to take steps to minimize their risk of financial loss, for example, through the purchase of stop-loss insurance; and to survey enrollees and disenrollees annually on enrollee satisfaction, access, and quality. In addition, a summary of incentive provisions must be made available upon request to enrollees.

While the Federal regulation does not cover all managed care plans, it does suggest growing Federal interest in the question of how financial incentives are structured, as well as a search for strategies that will protect consumers of health care from being denied care because of the incentives available to providers. One can predict continuing attention to this area in the future, both as an ethical and a legal issue.

In the vignette presented above, Dr. Furl believes that he can relieve some of the financial pressure he may experience under the contract he is negotiating by initiating involuntary commitment proceedings for enrollees with serious mental disorders. Involuntary commitment in a managed care setting is one of several emerging issues involving autonomy, coercion, and managed behavioral health care.

Individuals who are uninsured, or are enrolled in State Medicaid programs, usually have little choice where or from whom they receive health care. In unmanaged systems, emergency rooms are often the site of most primary care; in a managed Medicaid system, "freedom of choice" may mean that the individual must choose from three primary caregivers or be enrolled by default with one. Managed care plans also may limit patient choice and self-determination through limitations on benefits, or through decisions by a gatekeeper or utilization reviewer that the plan will not pay for treatment that the patient and treatment provider may believe is necessary.

Within these limitations, individuals retain the right to make informed treatment choices. Therefore, as noted below, there is an ethical obligation to inform enrollees and potential enrollees regarding the benefits and limitations on benefits available within a particular plan.

In addition, individuals with little choice regarding their specific providers continue to retain the right of autonomy in making decisions about their health care. This may be exercised in various ways, for example, simply by not going to the doctor even when it would benefit the person. Individuals may also disenroll from plans, though how often and under what conditions varies from State to State. However, while autonomy is a personal right, people with mental illnesses and substance abuse disorders continue to be subject to coercion, either through civil commitment or involuntary treatment orders, and the manner in which coercion is exercised in a managed care setting raises a number of issues.

Coercion as a shortcut in treatment

It has become axiomatic that treatment may be limited in managed care plans. The limitations may be explicit, for example, through caps on treatment, or the limits may flow from the budget imposed in a prepaid, capitated plan. While limits exist in traditional indemnity plans, the limits in managed care may be reached sooner or be felt more acutely by a provider bearing financial risk. Treatment of an individual with a serious substance abuse problem or a serious mental illness may take considerable time; keeping that person out of the hospital may take a significant investment of clinical and other resources. If the managed care plan in which the person is enrolled is undercapitalized, or if limits on sessions are "hard" rather than "soft," the therapist may conclude that there simply is not enough time to provide long-term treatment. In such a situation, coercion conceivably could become a treatment strategy designed to substitute for the much longer treatment approach the therapist otherwise might take.

Coercion as a strategy to extend treatment

In other circumstances, civil commitment may be used to extend treatment. There are at least two ways in which this might happen. First, if the managed care plan pays for involuntary treatment, a provider might be tempted to use commitment as a vehicle for extending the treatment of an individual who might otherwise be denied additional care by the payer. Though ethically more questionable, this practice is similar to increasing the severity of the diagnosis as a way to capture reimbursement.

Second, civil commitment might be used to extend the stay of individuals outside the managed care plan if the provider has unused hospital capacity and if reimbursement for the committed individual is available. This strategy is similar to the use of civil commitment in the 1980s to hospitalize adolescents from families with mental health benefits in their insurance plans. In either situation, coercion is being used as a way to capture reimbursement, a practice that is clearly unethical.

Coercion as a strategy to avoid the cost of care

Civil commitment also may be used as a cost-shift device, to "dump" patients who require significant levels of care or who present risk into the State hospital system or even into jail. Individuals with mental illness or substance abuse disorders may require a high level of investment not only to provide treatment but also, if the person is judged to present a risk to self or others, to monitor behavior, whether through case management, through more frequent clinic visits if the person is on out-patient status, or through longer lengths of stay if an in-patient. Depending on whether such care is compensated, the provider may be tempted to use civil commitment as a vehicle to shift the responsibility for care to another provider.

Involuntary commitment also may present a financial problem for providers who by State law must provide involuntary care (Petrila 1995). In many States, people who are committed involuntarily are treated first in a non-State hospital, and in some jurisdictions hospitals designated by the State to provide such care must accept the patient regardless of payment status. As more individuals with mental illnesses and substance abuse disorders are enrolled in managed care plans, there may be limitations imposed on the length of treatment that do not correspond to the duration of care the provider believes is appropriate. As a result, such providers may face increased "bad debt" in providing involuntary care. A similar situation may be faced by providers of emergency room care, who by Federal law must assess, stabilize, and then treat or transfer any individual presenting with a medical emergency. If the payer disagrees with the judgment that the condition was not an emergency, the provider again may experience a financial loss.

Finally, the fact that the person has been ordered into care directly conflicts with the principle of autonomy. If a person is civilly committed, or ordered by a court in another setting into treatment (for example, an individual may be ordered into drug treatment as part of the resolution of a criminal case), the provider will be asked to treat an individual who almost by definition does not want treatment. This situation may create issues for the treatment provider, faced on the one hand with a court order directing that treatment occur and on the other with a client who has entered treatment only because ordered to do so. While a discussion of techniques for resolving this conflict is beyond the scope of this monograph, it is worth noting that this conflict may become more frequent as managed care principles are adopted in foster care, juvenile justice, and other systems in which courts play central roles as gatekeepers.

Coercion and individuals who decline treatment

Individuals with mental illness and substance abuse disorders retain the right to decline treatment, absent an emergency or application of the State's rules permitting the ordering of treatment when it has been refused. In a managed care setting, or in any other setting, providers must understand State law governing the refusal of treatment.

In addition, because coercion abridges the exercise of autonomy, there are ethical considerations if providers resort to coercion before other efforts are made to gain treatment compliance. Individuals decline to take medication for a number of reasons, including its effects, a preference for one medication over another, and other reasons, like denial of the illness. It is important that the provider take steps to learn why the individual does not wish to take prescribed medication--such a dialogue may result in an agreement by the individual to accept an alternative treatment of similar efficacy.

After four sessions with Mr. Sloe, she believes that he would profit from several more sessions in treating the anxiety disorder that is keeping him from working. There is a provision in her contract that enables her to request more money to provide additional treatment to people whose illnesses are particularly severe. She believes Mr. Sloe is quite disabled, and is making progress, but his condition does not rise to the level of severity necessary to obtain additional reimbursement. Dr. Lant believes that her options are to adjust his diagnosis so that it meets the severity standard warranting additional reimbursement; end his treatment after two more sessions; or take him on as a charity case. She seeks guidance from a colleague. What advice should the colleague give?

The obligation to disclose role
conflicts and "double agentry"

A clinician in either a managed care or a fee-for-service environment must disclose to the client any conflicts that might affect the provider's clinical judgment. For example, Principle 6 of the Ethical Principles of Psychologists (American Psychological Association 1992) requires that "when conflicts of interest arise between clients and psychologists' employing institutions, psychologists clarify the nature and direction of their loyalties and responsibilities and keep all parties informed of their commitments." Similarly, the Principles of Medical Ethics of the AMA, section 2, states that "a physician shall deal honestly with patients and colleagues." In the vignette, it would be incumbent upon Dr. Lant to disclose the fact that she has a contractual relationship with Channelside and that she has obligations under that contract that may affect her treatment of Mr. Sloe.

Economic informed consent

As noted earlier, informed consent traditionally addressed clinical issues. However, with the advent of managed care, and reimbursement systems that place explicit limits on the types and duration of treatment, the idea of "economic informed consent" has emerged. This means that the treatment provider, as part of the informed consent process, attempts to ascertain whether the client is aware of limitations on services available to the client resulting from provisions in the client's insurance or managed care plan. Many managed care plans initially imposed contractual "gag rules" that prohibited clinicians from discussing the nonavailability of certain types of treatment or limitations on treatment. Such rules clearly place clinicians in an untenable ethical posture. State legislatures and courts have been eliminating those rules, however, and the Federal Government has barred such rules in plans funded by Medicare and Medicaid.

The National Association of Social Workers, in its most recent Code of Ethics (1996), has adopted at least a limited notion of economic informed consent. The code defines informed consent in the following way:

Social workers should use understandable language to inform clients of the purpose of the services, risks related to the services, limits to services because of the requirements of a third-party payer, relevant costs, reasonable alternatives, clients' right to refuse or withdraw consent, and the time frame covered by the consent. Social workers should provide clients with an opportunity to ask questions (NASW Code of Ethics, sec. 1.03(a) (1996) (emphasis added)).

This is an explicit recognition that financial information is sufficiently important to the client's exercise of autonomy that the principle of informed consent should be expanded to include it as a core element. The American Psychiatric Association's Ethics Committee has reached a similar conclusion. In responding to a question asking whether psychiatrists who had joined a preferred provider organization (PPO) were unethical, the Committee answered that psychiatrists participating in a managed care system "are not inherently unethical if":

1. Patients and prospective patients (or their employers) made an informed decision to participate in a managed care plan that included knowledge of

a. their other options;
b. benefit limits;
c. the pre- and current authorization process;
d. their right to appeal a utilization decision;
e. the limits as to whom they can see without having to make a greater financial investment; and
f. the potential invasion of their privacy by the review process.

2. No exaggerated claims of excellence are made.
3. Care provided is competent and meets patient needs within the benefit limits.
4. The utilization review process is not unduly invasive of the doctor-patient relationship.
5. Reviewers are not financially rewarded for denying care.

(Opinions of the Ethics Committee on the Principles of Medical Ethics with Annotations Especially Applicable to Psychiatry, section 6-K, 1995 Edition)

Two questions are worth asking at this point. First, why should the practitioner rather than the payer be obligated to discuss with the client benefit limitations? Second, what type of discussion should occur?

The answer to the first question can be found in the changing nature of the treatment relationship noted earlier in this monograph. In many managed care settings, the traditional dyadic relationships between treatment provider and client on the one hand and client and insurance company on the other simply do not exist. The vignette involving Dr. Lant illustrates this point: Dr. Lant is treating Mr. Sloe under the terms of a contract she has with the managed behavioral health care company that is managing the State Medicaid program's behavioral health benefit. Therefore, Dr. Lant has a contractual relationship with the payer; Mr. Sloe, the client, happens to be enrolled in the plan, but the limitations on his treatment result from Dr. Lant's belief that she must impose the limitations to stay solvent under her contract. While payers also have fiduciary responsibilities to provide information regarding benefits to enrollees, the notion of "economic informed consent" suggests a greater role for treaters in providing nonclinical information that affects treatment.

The type of discussion that should occur obviously will depend to a degree on the practitioner's style in discussing issues with potential clients. However, since limitations on benefits may shape the ensuing relationship to a significant degree, it seems clear that the discussion should begin at the beginning of the relationship. This arrangement gives the client the opportunity to decline to enter the relationship if he or she chooses because of the limits the therapist has outlined. In the vignette, Dr. Lant should discuss with Mr. Sloe the fact that she tends to limit Medicaid recipients to six sessions and why; that there are certain circumstances under which additional sessions might be reimbursed; and any impact that the limitation on sessions has on the manner in which she conducts therapy. In addition, she should note, if it is true, that she would hold additional sessions with Mr. Sloe if he will pay for them. If her relationship with him is limited to the six sessions and both she and he believe additional treatment would be beneficial, she also should outline steps she would take, if any, to refer him to another therapist. [Note, given the earlier discussion on the therapist's fiduciary responsibility, that if at the end of six sessions Mr. Sloe presents a high degree of risk to himself or others, terminating treatment without a plan to address this risk creates the potential for legal liability for the therapist.]

Finally, it makes sense to discuss benefit limitations at the outset of the treatment relationship for both clinical and legal reasons. The issue of payment is important to the therapeutic relationship, and postponing discussion until the relationship has developed might erode any trust that has been established. From a legal risk management perspective, the treatment provider is much better off at the beginning of the relationship addressing the issue of payment and the terms under which the treatment relationship might end; in the legal cases discussing liability in the managed care era, payment issues appear not to have been raised until late in the relationship, when the termination of reimbursement became an issue.

The notion of "economic informed consent" is comparatively new, though many clinicians have always discussed with clients issues regarding payment. It is likely that additional discussion within professional groups, the courts, and legislatures will occur regarding how far such discussions with clients must go. For example, are physicians obligated to tell uninsured patients that certain medications are available only to individuals with insurance? Are therapists obligated to tell clients that another managed care plan provides a better therapy benefit? While answers to questions like this may not yet be clear, discussions of such questions will become the rule in the future.