Patient Privacy Battle Hinges on Competing Interests

January 1, 2001

How much information do insurance companies need in order to reimburse psychiatrists? Should they be allowed access to therapy notes? These questions have sparked a battle in North Carolina that may affect the patient-psychiatrist relationship.

One of the reasons that details surrounding a clash over the privacy of patients' records in North Carolina are shrouded in secrecy is that there are still aspects of the dispute that, ironically, remain confidential. The year-and-a-half-old battle, which started after a breakdown in the relationship between two psychiatrists and a major health insurer in the region, yielded privacy issues so critical that the American Psychiatric Association and the North Carolina Psychiatric Association (NCPA) ultimately agreed to jump into the fray.

At issue is a conundrum that will ultimately confront every psychiatrist in the nation and will, if not resolved in a way that reconciles competing interests, strike at the heart of mental health care: Can psychiatrists preserve patient confidentiality while at the same time providing enough information to insurers so they can get paid?

Unresolved questions abound: How much information can insurers justifiably request to ensure that health benefits are paid properly? Are benefits payers asking for so much information that they risk undermining the therapeutic relationships between physicians and patients, or, even worse, are they so intrusive that people won't seek care when they need it? Will physicians sacrifice their obligation to preserve their patients' most intimate revelations in order to ensure an uninterrupted income stream?

For husband and wife team Pamela Wright-Etter, M.D., and Kevin Etter, M.D., psychiatrists from Charlotte, N.C., the answers to those questions seemed simple enough. Insurers are not entitled to read therapy session notes that contain descriptions of the most private details in the lives of psychiatric patients, unless health care carriers have current, written, informed consent from the patient. Routine consents signed when an individual applies for coverage won't do, the Etters insisted, because people either do not realize when they sign that they might need mental health care, or they most likely cannot foresee what they might tell their psychiatrists. Physicians who turn over their patients' files just so they can get paid are simply breaching their ethical duties, according to the Etters.

That stance, however, has now cost the Etters at least 60,000 in reimbursements and placed their medical practice at risk of closing down, Wright-Etter said in an interview with Psychiatric Times. The trouble started, she explained, when Blue Cross and Blue Shield of North Carolina (BCBSNC) began requesting complete patient files during the course of an audit. To this day, Wright-Etter said, she still doesn't know why BCBSNC is asking for complete patient files in nearly 30 cases, because the insurer claims the reason is confidential.

"You cannot allow that level of intrusion into the doctor-patient relationship," she said.

When BCBSNC first requested complete patient files in the spring of 1999, Wright-Etter said she cooperated by asking patients whether they would agree to the disclosure. Several individuals signed consent forms, allowing the release of information to the insurers.

But when most of her patients balked at the request, Wright-Etter said she and her husband tried offering other alternatives, all to little avail. At that point, they dug in their heels, telling BCBSNC that it couldn't have the records and that it would have to adopt another tack.BCBSNC did just that. Determining that there was inadequate documentation to justify the services rendered after failing to receive the requested charts, it retrospectively withdrew authorization for all the benefits provided to date, according to Wright-Etter. Since the Etters had already been paid for those services, BCBSNC began withholding payments on future billings.Wright-Etter called that move coercive and unjustified and claimed it is a way to get at the patient records the company should not be entitled to see. Some of the patients were government workers and teachers, fearful that their jobs could be on the line if anyone learned they were undergoing psychiatric care."If they take away the fundamental right of a patient to confidentiality, then what's the point?" Wright-Etter asked. "Why pretend? We cannot practice psychiatry without it."

She added that psychiatrists can end up serving two masters when they get into the position of being an administrator rather than a clinician, and a choice has to be made. "I'm not going to compromise my patients," Wright-Etter said. "First and foremost, the patient's right to absolutely veto any movement of their personal, private information regarding their lives has got to be something that we fight for."

She cited APA guidelines that require psychiatrists to be more careful when disclosing full patient records. They state that patients should have an appreciation of the content, how the information will be used, if and what information will be redisclosed to other parties, and the manner in which it will be protected.

The guidelines concluded, "Logically, it is not possible to give a fully informed authorization prior to the time that the care itself has been rendered and the patient has had an opportunity to review the information involved."

Robert I. Harris, M.D., a BCBSNC senior vice president for health care services and chief medical officer, declined to comment to PT on the Etters' specific case, saying that their investigation is still open, and the details are confidential. He did insist, however, that the company's internal confidentiality policies are more than adequate to protect patients once the records are turned over.

Wright-Etter conceded that she is fighting an uphill battle, which is not helped by the fact that other physicians do not view confidentiality issues with the same critical eye. She conceded, "Most physicians roll over on this issue."

"There are plenty of doctors who want to cave on this," Wright-Etter said. "But look at the aggravation we've been through. I can't blame them...that's why psychiatrists are in the position we're in with managed care, because we haven't stood up and said, 'No, we're not doing this.'"

Nevertheless, she was able to trigger involvement by both the APA and NCPA, who sent representatives to speak with BCBSNC.

"This isn't a new issue. It's just an issue that no one's been talking about," David Smith, M.D., a Chapel Hill, N.C., child and adult psychiatrist, explained in an interview with PT. Smith chairs the NCPA's health care management/economic affairs committee. "This is a most dangerous situation for the practitioner and a horrible, horrible one for any patient. This is a fight that psychiatrists need to recognize has to be waged."

Fortunately, weighing in with the combined effort of the APA and the NCPA did make a difference. Interceding brought some results, Smith said, despite BCBSNC's denial that any changes it made to their confidentiality policies resulted from discussions with the professional associations. Rather, policy changes that became effective last November were motivated by an attempt to come into advance compliance with proposed privacy regulations promulgated under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), according to a company spokesperson.

Nevertheless, in an Oct. 26, 2000, letter that responded to NCPA concerns, Harris agreed that BCBSNC would seek current informed consents for psychotherapy notes.

"Effective November 1, 2000," Harris wrote, "BCBSNC will not consider psychotherapy notes (as defined in the draft HIPAA privacy rules) to be part of any medical record or mental health record. BCBSNC is willing to obtain a separate member release for the disclosure of any psychotherapy notes which may be needed for payment or health care operations purposes (including investigation of alleged fraud)."

Under the new guidelines, BCBSNC will be able to obtain basic treatment information, similar to that usually provided on an insurance claim form, relying on the routine disclosure signed by patients. If the company decides it needs or wants more extensive data, then it will ask for a current patient consent.

For the APA, and the thousands of psychiatrists who must practice under increasingly rigorous and complex rules and regulations, there are important interests that must be protected, said Irvin (Sam) Muszynski, APA director of health care systems and financing, in an interview with PT. He has sought to bridge what appeared to be irreconcilable differences between competing interests over the past several months.

"The fix is some consensus on a treatment reporting format, whether it's retrospective or prospective review, that safeguards the essential patient privacy but gives the insurer the right to demonstrate accountability," Muszynski said. "Our ethical guidelines say that no current record should be released without a contemporaneous patient consent."

Although Smith acknowledged that the APA and the NCPA have come a long way in the months of negotiation, there are still gray areas that need to be ironed out, and he hopes to continue with the ongoing dialogue. Even though BCBSNC agreed to obtain current releases for psychotherapy notes, it has yet to disclose the circumstances under which it could ask for the notes and what will happen if the patient or physician refuses. Meanwhile, without the ability to absolutely assure patients that their private lives will not end up in front of a claims handler or worse, Smith agreed the therapeutic relationship with patients is at risk.

"The insurers have become more aggressive, more pushy. Psychiatrists have to be alerted to this, and we have to get more people focusing on the erosion that's occurring in the therapist-patient relationship by virtue of this secretive, almost clandestine...slipping into your office to get to your patients' charts without their knowledge," Smith said. "Some psychiatrists are just doing it, and they are not telling their patients."

Harris, however, said that the requests being made by BCBSNC are business-related and not meant to interfere with treatment. "Our needs are basically business needs," he said. "We are not engaged in making clinical decisions. We're engaged in running an insurance company with a variety of products."

Harris also said that in the vast majority of instances, the mental health records, absent the psychotherapy notes, would be adequate for company purposes. While acknowledging that BCBSNC would sometimes ask for complete records, he declined to comment on the circumstances that would generate the request or what the company would do if the patient or physician declined to comply. He also would not comment on whether the possibility of disclosure could have a therapeutic impact.

"I'm not a psychiatrist, and I really can't comment," Harris, an internist, said. "What we have done is made substantial changes and substantial improvements, and communicated them to the NCPA, and they have been very well received. We fully anticipate that these changes will not only be well received by the association but by the lion's share of practicing psychiatrists in North Carolina."

Former APA president Harold Eist, M.D., the current American representative to the World Psychiatric Association, disagreed that the fight to preserve patient confidentiality will necessarily end with agreements such as those hashed out with BCBSNC. A long-time critic of managed care's policies, the Bethesda, Md.-based private practice psychiatrist and medical director of Montgomery County Child and Family Health Services bristles at what has transpired.

"In my view, the Blues have been vicious in attempting to win what seems to be a power struggle or control battle, one which is fairly typical of the managed care industry," Eist told PT. "The Etters have been heroic in defending their patients' privacy rights."

Eist denied that there is ever any reason for a company to peer into patients' confidential records, charging that insurers want access to therapy notes for "nefarious purposes to get people to stop treatment or to stop using their insurance."

The battle over privacy will heat up nationally, Smith said, acknowledging, "It's a money issue versus standing up for your patients and for the practice of psychiatry."

"I don't think this will stop in North Carolina; it can't stop in North Carolina," Smith said. "The APA itself has to do a better job of focusing this issue for all psychiatrists."