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Mentally Ill, Addicts Being Denied Inpatient Treatment, Group Testifies

Andrew Kitchenman | July 19, 2013

Senator wants to redress balance between doctor recommendations and insurance payments.

Sen. Robert Gordon

People in New Jersey are being wrongly denied insurance for inpatient treatment for substance abuse and mental illnesses, putting them in the position of choosing between paying for highly expensive care or being put on the streets, a group of patients, family members, and healthcare providers told a legislative committee yesterday.

The group told the Senate Legislative Oversight Committee that the state should take a more active role in advocating for patients, saying that those with behavioral or substance-abuse issues aren’t treated the same as those with physical ailments.

For instance, Debra L. Wentz, CEO of the New Jersey Association of Mental Health and Addiction Agencies, said the state’s Medicaid program provides inadequate reimbursement rates for treatment.

“Usually you get what you pay for, but in the case of providing the treatment and services for mental illnesses and substance-use disorders, the return on investment is huge,” Wentz said. “And if there is not adequate investment, then the cost to taxpayers in the consequences of untreated mental illness and addictions can break the bank.”

Mental health and addiction services are covered by a variety of payers, including Medicaid, private insurance, and public employee benefit programs, as well as charity care. While the committee examined the issue as a result of its role providing legislative oversight to the executive branch of government -- which operates the Medicaid and public employee benefit programs -- it considered issues related to all of the payers.

Sen. Robert M. Gordon (D-Bergen), the committee chairman, said he would consider introducing a bill based on a Pennsylvania law that requires insurers to cover treatment recommended by doctors for a 30-day period.

Currently, a patient with private managed care insurance undergoes a review by a utilization management company hired by the insurer. That company can determine that the treatment -- including the length of stay for inpatient treatment -- recommended by patient’s healthcare providers isn’t medically necessary. The patient can then appeal that determination and ask for an independent review, but the families said the process has broken down and is leading to too many negative results for patients.

“There are a great number of people are not getting the kind of care they need. It affects families and it affects society,” Gordon said.

The debate focused on how insurance companies define what is “medically necessary,” with attendees saying that the companies unfairly refuse additional days of inpatient care or therapist sessions.

However, insurance industry advocates argue that the current system provides appropriate checks and balances that allow patients to appeal decisions and that the measure mentioned by Gordon would reduce the ability to avoid unnecessary treatment.

“The system that’s in place allows an appeal and allows someone outside the health plan to hear the appeal,” said Wardell Sanders, president of the New Jersey Association of Health Plans. “To allow automatic coverage for 30 days would certainly blunt the effectiveness of tools to weed out inappropriate utilization and control costs.”

The testimony depicted a series of situations in which patients were denied care after their providers recommended it.

Nancy Walsh described the plight of her son James. She said he has had a series of denials in seeking treatment for addiction.

James said he lost nearly six years of his life to heroin addiction after being denied inpatient treatment recommended by providers. He has been in recovery for a year after finally receiving that treatment.

Much of the testimony was coordinated by HealthCare Assistance with Member Support LLC (HCAMS), a company that provides behavioral health assistance to employees including public worker union members.

While the testimony of several patients and family members focused on cases in which they were denied the length of treatment their doctor recommended, it’s not clear whether mental health cases make up an unusually large number of the overall number of insurance decisions appealed by patients.

The state produces reports every six months that include information on the appeals of all patients who were denied treatment by utilization management companies.

In the most recent report by the state appeals program, which covered the period from July 2012, to January 2013, 36 of 208 completed reviews were for psychiatry cases, the second largest group after internal medicine.

There has been a growing demand for hospital care from those in need of behavioral health or addiction services. According to the New Jersey Hospital Association, there were more than 520,000 residents in 2012 that sought emergency care and didn’t meet the criteria for inpatient admission. This was a 16.5 percent increase over 2011, compared with a 4.5 percent total increase in emergency department visits.

The state is in the process of setting the rate it will pay for these services under the Medicaid waiver it received from the federal government. Wentz encouraged legislators to ask state officials for higher reimbursement rates.

Linda Shagawat of the New Jersey Society of Social Workers said she worked with two police officers who committed suicide after being denied care.

Gordon said he would consider supporting a new state office devoted to ensuring the rights of mental health and addiction patients are protected, similar to the ombudsman for institutionalized elderly patients.

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