Managed Care Wins and Psychiatry Losses in a Court Reversal


How has quality of care changed over the years?




The news release headline from the American Psychiatric Association (APA) to members on March 23, 2022 did not seem so worrisome to me at first glance: “American Psychiatric Association Statement on Ninth Circuit court’s Decision in Wit v. United Behavioral Health.” But the following text seemed devastating as it reversed a February 2019 decision in which the US District Court for the Northern District of California had decided that United Behavioral Health (UBH) had violated its fiduciary duty by making decisions by its own guidelines and financial interests.

No explanation or more follow-up details were provided by the APA, so I tried to investigate the legal literature, which is sometime tortuous for someone outside of the field to understand. Basically, I think I found that payers like UBH could use their own level of care guidelines, rather than expert guidelines, and without having to clearly state why.

Having led a not-for-profit academic managed care system in the 1990s, I was faced with a similar challenge.1 What standards of care will also provide financial viability? Because of the ethical challenges involved, I was asked to write a book about the process. It is now almost precisely the 25th anniversary since it was released and received an unprecedented 2 reviews over the years in the APA journal Psychiatric Services, the original negative, and the second positive.

At that time, the collective research on psychiatric patient outcomes was not great: about a third improved, a third stayed about the same, and another third seemed either to receive unnecessary treatment or worsened. The research on our system indicated that we did improve quality of care while remaining financially viable. However, other for-profit—and it is critical to distinguish between not-for-profit and for-profit—companies produced large profits, traded on Wall Street, and had unknown quality of care. Whether the clinical outcomes are better overall now seems debatable.

Where does that leave us? For better or worse, it falls on those who care about the patients the most: the clinicians who still must ethically advocate for the quality of care of their patients in whatever systems they are working in.


1. Moffic HS. The Ethical Way: Challenges & Solutions for Managed Behavioral Healthcare. Jossey-Bass; 1997.

Dr Moffic is an award-winning psychiatrist who has specialized in the cultural and ethical aspects of psychiatry. A prolific writer and speaker, he received the one-time designation of Hero of Public Psychiatry from the Assembly of the American Psychiatric Association in 2002. He is an advocate for mental health issues relate to climate instability, burnout, Islamophobia, and anti-Semitism for a better world. He serves on the Editorial Board of Psychiatric Times™.

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