HEALTH LAW SUPPLEMENT Spring 2007

Finally a real parity law in New York, at least for some patients. “Timothy’s Law” (S8482/A12080) was signed by Governor Pataki on December 22, 2006 as one of his last acts in office. The law is named after a boy who committed suicide and whose parents’ insurance did not include mental health coverage. The effective date of the law is January 1, 2007 despite attempts to postpone it.
The law mandates minimum mental health benefits for all employee health insurance plans regardless of number of employees: 20 outpatient visits and 30 inpatient days. Most plans already had such coverage but a significant change in this requirement of minimum coverage is that it must be covered to the same extent whether patients seek services in or out of any network established by the insurer.

The most significant change is the mandate for full-parity (with physical healthcare) but the mandate is limited to (1) employers with more than 50 employees and for (2) “biologically based mental illnesses” and (3) “children with serious emotional disturbances.” Biologically based illnesses include schizophrenia/psychotic disorders, major depression, bipolar disorder, delusional disorders, panic disorder, obsessive compulsive disorder, bulimia and anorexia. Children with serious emotional disturbances include those under 18 years of age with attention deficit disorder, disruptive behavior disorders, pervasive developmental disorders, serious suicidal or other life-threatening self-destructive behaviors, significant psychotic symptoms, and behaviors that create a risk of causing personal injury, significant property damage or removal from the household. The law does not apply to treatment for substance or alcohol abuse. Practically, the mandate means that for qualifying employers and diagnoses, there cannot be any differences in exclusions, deductibles, co-payments and coinsurance between physical and mental health coverage.

We’ve already fielded a few calls from clients who’ve been asked by patients to upcode their diagnoses to render them eligible for enhanced insurance coverage (e.g., a patient with dysthymia asked the client to consider a diagnosis of major depressive disorder.) An old label for this practice would be “DRG creep,” a term that came into use about 20 years ago when Medicare began linking reimbursement to “diagnosis-related groups” or DRG’s. With physical medicine where objective measures such as lab tests are prevalent, DRG creep is limited. It may prove harder to detect in mental health care, where so much of diagnosis is based on self-report.

In the past, it’s been common for psychotherapists to use milder diagnoses than might have been warranted by the patient’s clinical status, ostensibly to protect the patient’s privacy and avoid stigmatization. This new law, in tandem with the reduction of stigmatization of mental illness, may now reverse the bias in the other direction. In either case, it places the clinician at potential legal risk to diagnose based on any considerations other than a patient’s clinical presentation. Standards of care vary among diagnoses. Suppose a patient with dysthymia is diagnosed with major depression for the sake of greater insurance coverage. And then let’s say there is a negative outcome to the therapy. If there is a complaint or lawsuit, then the therapist might be questioned as to why there was not more extensive risk assessment, compulsory psychiatric referral, family involvement, etc., measures associated with the more severe expedient diagnosis but not necessarily with the milder correct one. In such circumstances, a response by the therapist that the more severe diagnosis was inaccurate but was made to accommodate the patient would only impair the therapist’s credibility.

Civil Confinement of Sex Offenders: Progress? Just a couple of weeks ago the New York State Senate and Assembly passed “The Sex Offender Management and Treatment Act.” Governor Spitzer had asked the legislative bodies to act quickly on the measures (A06162/S3318). Relevant for consideration by mental health professionals is a provision of the Act that creates a new category of mental health status for which a person may be civilly confined to a mental health facility, “dangerous sex offender.” Involuntary civil commitment may occur if the Attorney General can prove by clear and convincing evidence that a person has “a mental abnormality predisposing him toward sex offenses and making it difficult for him to control his impulses.” An assessment of such “dangerousness” would occur whenever a convicted sex offender is nearing the end of his prison term. Once hospitalized under the new law, patients would be entitled to annual reviews. Most of such patients would not have met long established criteria for severe “mental illness” warranting involuntary commitment, i.e., imminent risk of danger posed to self or others by reason of mental illness.

The American Psychiatric Association’s Task Force on Sexually Dangerous Offenders opposes such legislation because they believe that post-incarceration civil commitment misuses psychiatry to detain a class of persons for whom confinement rather than treatment is the real goal. (As is commonly known, treatment of sexual offenders is of limited efficacy.) The ACLU opposes such legislation for similar reasons. About 20 other states have similar legislation. Some states have rejected it, e.g., Vermont in 2006. Little opposition to the legislation in New York was heard from mental health practitioners and their associations, perhaps due to the political popularity of the Act.

The Act relies on mental health professionals to predict sexual dangerousness, a problematic proposition that, as many have noted in the past with predictions of “ordinary” violence, may push the field beyond what its procedures have the scientific means to do. Also, based on my experience in mental hygiene and licensing cases, a practical problem that may arise is that judges may be reluctant to make a determination that a formerly convicted sex offender is not dangerous. They will fear a public outcry if recidivism occurs with a prisoner they release. Thus the burden of proof that is apparently and properly on the State to prove dangerousness, will really be on the individual to prove non-dangerousness, a very difficult task.

Paying billing companies on a percentage basis is illegal fee-splitting in New York. I’ve reviewed a number of billing agreements over the past few months (to add provisions to comply with the HIPAA Security Rule) whereby the health care practitioner is paying the billing company a percentage of each claim that’s submitted to insurers by the company. The Office of Counsel of the New York Department of Health opined in 1997 that such payment arrangements run afoul of New York professional regulations prohibiting fee-splitting by professionals (the only type of business that a practitioner may pay on a percentage basis is a collection agency, i.e., one collecting past due bills.)

It’s been seven years since that opinion from DOH and I would have thought that the now illegal arrangement would be uncommon by this time. But it continues to be customary, perhaps because it makes business sense and because the prohibition is rarely enforced, as such arrangements are little noticed. In a legal context, the issue has seldom arisen except on a few occasions as a defense by professionals (trying to void the payment arrangement as an illegal one) in legal actions by billing companies against the professionals, but in raising that defense a professional is making an admission of unprofessional conduct. Regardless of enforcement though, such arrangements should be avoided if at all possible.

WELCOME TO NEW MEMBERS OF THE SCPA LEGAL PLAN!

INFORMATION IN THIS NEWSLETTER IS NOT LEGAL ADVICE FOR ANY PARTICULAR CLIENT OR SITUATION. CONSULT WITH AN ATTORNEY INDIVIDUALLY FOR LEGAL ADVICE REGARDING THE SPECIFICS OF YOUR SITUATION.

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