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Professional News
APA, DB Intervention Helps Settle Insurance Feud
Psychiatric News
Volume 36 Number 8 page 12-56

APA, the North Carolina Psychiatric Association, and persistent psychiatrists have convinced a major insurer to reform some of its review policies to pay greater heed to the need to protect the confidentiality of patient psychiatric records.

The involvement of the two organizations came in response to a request for help from two North Carolina psychiatrists, Pamela Wright-Etter, M.D., and her husband, Kevin Etter, M.D., who were battling one of the state’s largest insurers over the degree of access it legally and contractually had to psychiatrists’ treatment notes.

The Etters were refusing to comply with a request for their patients’ detailed treatment records by Blue Cross and Blue Shield of North Carolina. The insurer demanded the records, including treatment notes, as part of a 1999 investigation of billing practices by the Etters, which arose after a patient filed a complaint against them with the Blues. The insurer had asked for the psychiatric records of 12 patients, one of which was for the patient who filed the billing complaint. It gave the Charlotte psychiatrists 10 days to comply.

The Etters refused to turn over the requested records and notes to Blue Cross/Blue Shield without the patients’ contemporaneous consent, maintaining that the general insurance-related consent the patients signed when they began treatment or first became eligible for insurance did not apply in a situation such as this.

To obtain the patients’ contemporaneous consent, the Etters sent letters to the 12 patients explaining that the insurer wanted to review their records and therapy notes but that the psychiatrists were withholding them until the patients provided specific consent for this review. Only two of the 12 patients consented to have their records turned over to the insurer.

About six months after that exchange, the insurer asked the psychiatrists to supply them with another 27 records to review. Again the Etters refused to comply without the express consent of the patients whose records were at issue. They insisted that to go along with the request to hand over detailed therapy notes would be a violation of professional ethics.

In addition, Wright-Etter told Psychiatric News, "From a medical-legal standpoint, we would be in trouble if we let records go out of the office without specific informed patient consent." When patients sign a generic insurance consent, she noted, they have no idea of what sensitive issues might come up in therapy and be included in psychotherapy notes.

Blue Cross/Blue Shield responded that without the treatment records to review, it had no way to verify that the psychiatrists actually provided the disputed services for which they wanted to be reimbursed. In the absence of the requested records, the insurance company then insisted that the Etters owed them nearly $57,000, the sum it had reimbursed them for treatment services that it said were now questionable. The insurer did not demand that the psychiatrists write them a check for this amount, telling them instead that it would deduct the money from future reimbursements they were due as per their contract with the Blues.

The insurer followed through on this threat, Wright-Etter said, and did withhold reimbursement on some claims from September to late December of last year.

Following several meetings between APA, the North Carolina district branch, and the Blues, the insurer agreed to stop deducting money from claims submitted by the Etters.

After appeals for help from the Etters and more than a year of negotiations with Blue Cross/Blue Shield initiated by APA and the North Carolina Psychiatric Association, the insurer agreed to develop and put into practice claims-review standards that pay more respect to the needs of patients and maintain the privacy of medical records to the greatest extent possible while still allowing it to review medical care. The company has begun requiring contemporaneous patient consent before it will review treatment records that may include the intimate personal details that may be part of psychotherapy or other psychiatric notes.

The insurer also said it would stay in compliance with the privacy rules of the federal Health Information Portability and Accountability Act (commonly referred to by its acronym, HIPAA), which in this case means that psychiatrists and other clinicians are required to provide an insurer with the minimum amount of clinical information needed to assess the validity of a reimbursement claim.

The company announced these policy changes in a letter to the North Carolina Psychiatric Association. Wright-Etter is far from satisfied, however, with the outcome to date. She said that since there is no formal agreement binding the Blues to uphold these promised changes, "as far as I’m concerned, it [a settlement of the issues] doesn’t exist," she emphasized.

In a statement commenting on the settlement between the Etters and Blue Cross/Blue Shield, APA President Daniel Borenstein, M.D., and North Carolina Psychiatric Association President John Wagnitz, M.D., said that the success of this partnership between members, APA, and a district branch "illustrates how individual APA members can access a process through their district branch that serves to strengthen the legal and ethical principles of our field."

They noted as well that with the insurer’s agreeing to back down on some of its unreasonable demands regarding patient records, "the accomplishments gained in this case are truly significant, represent exemplary standards for North Carolina, and can serve as a model for other states and district branches."

While Wright-Etter said she appreciated APA’s help, particularly that of President-elect Richard Harding, M.D., and Sam Muszynski, director of the Office of Healthcare Systems and Financing, she said she regretted that it took a long time for the Association to begin its involvement.

As for the outcome to date, "This whole thing has cost us dearly," Wright-Etter stated. She and her husband have dropped out of all managed care panels and as a result have had to close their practice, she said. "We’ve sacrificed everything for the sake of privacy and confidentiality and taking an ethical stand," she stated. ▪

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