'Predatory' Insurance Practice May Put Young Psych Patients at Risk

Pauline Anderson

March 04, 2016

Delayed psychiatric hospitalization of children and youth because of the need of prior authorization, which is required by insurance companies before patients can be admitted, may place these young patients in even greater danger, new research suggests.

This mandatory practice, which is required to guarantee payment of hospital costs for patients at imminent risk, is described by some experts as "onerous," "dangerous," and "predatory."

Psychiatry is singled out for a level of scrutiny not demanded of other specialties, said senior author J. Wesley Boyd, MD, PhD, a psychiatrist at Cambridge Health Alliance, who is also an associate professor of psychiatry and a faculty member at the Center for Bioethics at Harvard Medical School, Boston, Massachusetts. "It's completely unique to psychiatric care," he told Medscape Medical News.

The study was published online February 12 in the American Journal of Emergency Medicine.

Most Kids Go Untreated

Four million children and adolescents in the United States suffer from a serious mental disorder that causes significant functional impairment at home, school, and with peers, the authors note.

However, in any given year, only 20% of children with mental disorders are identified and receive mental health services. The authors add that among youth, many of these disorders can have lifelong deleterious effects, a fact that highlights the importance of timely access to care.

Previous research has examined the impact of the prior authorization requirement in adult psychiatric patients deemed in need of hospitalization. To examine delays in receiving care as a result of the prior authorization requirement in a pediatric population, the researchers, with first author Amy Funkenstein, MD, who is currently on staff at Tufts University, in Boston, Massachusetts, conducted a 5-month prospective study from May to October 2014.

Social workers at the Hasbro Children's Hospital, in Providence, Rhode Island, completed paperwork every time they contacted an insurance company on behalf of a child deemed in need of psychiatric admission.

They recorded the insurance company's name, the time spent on the telephone obtaining authorization, the decision and the length of stay that was authorized, and the child's age, sex, race, and chief complaint.

Researchers obtained 203 data sheets for patients ranging in age from 4 years to 19 years (average age, 13.6 years). The most common reasons for admission were suicidal ideation or a suicide attempt, aggression, and homicidal ideation. Other complaints included eating disorders, anger, self-injurious behavior, and auditory hallucinations.

The average time required to obtain authorization from the insurance company was 59.8 minutes; times ranged from 3 minutes to 270 minutes.

Deliberate Delay Tactics?

Much of the time on the telephone with insurance companies in these circumstances is spent providing "lots and lots" of demographic data and information about the issue at hand, said Dr Boyd. "Often, once you make an initial call, you have to wait for a callback," he said.

The cost for this time "is staggering," he said. The investigators estimate that the 60 minutes of telephone time required to obtain authorization translates into more than 1.5 million hours of wasted clinician time.

Furthermore, if a patient is kept in the hospital longer than 2 days, "the inpatient facility has to get on the phone and basically repeat the same procedure and get another authorization for another couple of days," said Dr Boyd.

The prior authorization rule is "onerous" because it means that time is taken away from tending to patients, said Dr Boyd. "You have clinicians in emergency settings who might have five or six patients they're dealing with simultaneously, some of whom might be suicidal or homicidal. They need to spend time directly with those patients or immediately get them into a safer facility ― so out of the ER and into a locked facility where they are going to get more direct attention."

He suspects insurance companies deliberately employ delaying tactics in the hope that some clinicians will just give up.

"If clinicians are on the fence ― considering, 'should I hospitalize this patient or not?' ― knowing they are going to have to jump through these administrative hoops, they might be swayed towards seeing if there's a less intense alternative to inpatient hospitalization."

Vulnerable, Impoverished Population

Given that the study showed that insurance companies approved "every single admission, ultimately," the need to get prior authorization for such admissions seems more like an administrative hurdle, added Dr Boyd.

It is important to speak out on behalf of psychiatric patients, many of whom are vulnerable and impoverished, he said.

He noted that several years ago, some major insurers floated the idea of mandating that women be discharged from the hospital within 48 hours of giving birth. "Before that rule was even implemented, there was such a massive public backlash and outcry that they nixed it very quickly."

But no such advocacy movement is doing the same for children subjected to this prior authorization rule, said Dr Boyd. "That's because of the stigma of mental illness and because many mentally ill patients can't speak for themselves."

He called the practice "predatory" because it is something only psychiatric clinicians have to deal with. "Pediatricians treating someone with pneumonia don't have to get on the phone for an hour asking the kid's insurance company if it's okay to admit the child, and if someone comes in with appendicitis, the surgeon just sends them directly to the operating room."

The prior authorization practice can also be viewed as dangerous because obtaining timely care for young people in psychiatric crisis is vitally important, he said. An estimated 4 million children and adolescents in the United States suffer from a serious mental disorder that causes significant functional impairments. Many of these disorders can have lifelong negative effects.

The "rigorous procedures and requirements" for prior authorization were implemented when managed care came along 20 or 25 years ago, said Dr Boyd. He sees this as another example of some managed mental health care companies "putting profits before patients' health and well-being."

This prior authorization practice extends across the country. Dr Boyd said he believes that in most areas, Medicaid, which is managed state by state, requires prior authorization. Large insurance companies, such as Blue Cross Blue Shield, also implement it.

"Often, the mental health portion of a health insurance plan is 'carved out' and handed over to a separate company to manage," explained Dr Boyd.

Prior authorization for psychiatric patient admission typically applies to adults as well as children.

Medicare, which is a federally administered program, is one of the only healthcare insurers that does not require prior authorization, said Dr Boyd.

Multiple Barriers for Kids in Crisis

Commenting on the findings for Medscape Medical News, Joseph R. Mawhinney, MD, a child psychiatrist in San Diego, California, who is on the American Psychiatric Association's Council on Healthcare Systems and Financing and is chair of the Access to Care Workgroup, said there are "multiple barriers to care for children and teens in crisis."

One of the barriers to admitting a child in crisis is the "administrative maze of delays," said Dr Mawhinney. "These include being put on hold, being given wrong numbers, calls being dropped, being redirected multiple times, and unnecessary delays."

Another barrier, said Dr Mawhinney, is the shortage of acute-care hospitals and other high-intensity treatment resources. "The low reimbursement by managed care organizations has led to the closure of facilities, including acute hospital programs, for children and adolescents, as well as residential treatment."

A big step toward correcting these deficiencies would be to have parity of reimbursement for services, facilities, and practitioners, said Dr Mawhinney.

"Medical emergencies involving children in crisis should be handled differently, and more at the discretion of evaluating physicians. Emergency department physicians should have authority to determine medical necessity or necessary level of care, as they would for other medical disorders," he said.

The authors and Dr Mawhinney have disclosed no relevant financial relationships.

Am J Emerg Med. Published online February 12, 2016. Abstract

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