Good morning. My name is Joan Borsten and I serve as Executive Director of Summit Estate Recovery Center in Silicon Valley. I am also the co-founder and former CEO of Malibu Beach Recovery Center, as well as the co-founder and former VP of the Addiction Treatment Advocacy Coalition.
I am here to testify about a decade-long problem in California and the nation -- insurance companies that incentivize doctors who do not currently practice addiction medicine, to deny addiction treatment.
California’s addiction treatment providers all breathed a sigh of relief when, 5 days after SB 855 became law, the DMHC and CDI notified insurance companies and providers that the only criteria they could use going forward, to determine length of stay and level of care, were those of ASAM (the American Society of Addiction Medicine).
But, despite these reforms, most insurance companies continue to hire the very same doctors they have hired for years, who use the same inappropriate reasons to deny coverage. Across California, insurance companies prematurely send substance use disorder patients home, disregarding the ASAM criteria, putting countless patients at risk of relapse, homelessness, and, in some tragic cases, even death.
In November of 2021, Summit Estate Recovery Center, for which I serve as Executive Director, joined forces with several billing companies to track these denials across 38 facilities over two years – our results found that none of the approximately 80 external and internal doctors hired by insurance companies, primarily Anthem, to perform peer-to-peer reviews for addiction patients were ASAM accredited, nor do they consistently base their decisions on ASAM criteria.
Shockingly, the doctors most frequently assigned to review addiction cases in California have denial rates of 100%, 90%, 80%, 70%, and more
In 2022, our local State Senator Dave Cortese, authored SB 999 to save lives and outlaw the practice of insurance companies using unqualified doctors to deny treatment determined necessary by ASAM. SB 999 also called for improved working conditions for peer-to-peer reviews, ending last minute scheduling of peer-to-peer reviews and eliminating the cut-and-paste denials devoid of patient-specific information. This bill was ultimately vetoed by the Governor. In his veto message, the Governor stated that the bill was premature given the recent passage of SB 855 and regulations at the Department of Insurance and the Department of Managed Health Care still needing to be finalized.
While waiting for these two agencies to act, at the suggestion of the Kennedy Forum, Summit began submitting Independent Medical Reviews (IMRs) to the Department of Insurance and the Department of Managed Health Care to challenge illegal denials. Remarkably, we won every case we fought, with Bloomberg News reporting that 66% of all IMRs related to addiction and mental health, filed after SB 855 became law, overturned these denials.
I'd like to share with you two patient stories from Summit who were denied the care they deserved according to ASAM criteria but had their denials overturned. You can find these stories in your handouts, as well.
Patient #1 was an alcoholic with undiagnosed anxiety and depression. She had never achieved more than a week of sobriety. After 17 days, she was denied more inpatient care by a Prest psychiatrist with a 100% denial rate. The denial was upheld by an Anthem geriatric psychiatrist with an 88% denial rate, who said, "I see she needs treatment, but this is not that kind of discussion. This is to determine payment."
Patient #2 had been drinking heavily for over a decade to cope with anxiety and depression. After 10 days of inpatient treatment, ASAM criteria confirmed that he needed more time in a 24/7 facility. However, a Prest psychiatrist with a 43% denial rate refused the additional days, and the denial was upheld by an Anthem psychiatrist with a 100% denial rate.
In California, the future of mental health and addiction treatment centers is hanging in the balance, but we have the power to protect them.
We predict that if the final SB 855 regulations do not require use of qualified doctors currently practicing addiction medicine who use ASAM criteria to determine length of stay and level of care, California’s landmark parity bill will have no teeth and substance use and mental health patients will again have no voice.
CALIFORNIA SCOREBOARD FINDINGS 11/1/2021-02/28/22*
The participating facilities reported that 310 out of the 433 peer-to-peer reviews were denied (71.6%).
Thirteen reviewers out of 76 were assigned 45.27% of all cases.
Prest & Associates reviewed 106 cases of the 433 and denied 87 (88.8%).
Three Prest reviewers were assigned 24.48% of all reviews and were responsible for 94.20% of all denials.
The statistical correlation between the two variables: Number of reviews and number of denials was found to be very strong.
*Based on records obtained from 38 California-based state-licensed treatment facilities
Patient #1 was an alcoholic with undiagnosed anxiety and depression. A parent died of a drug overdose. The most sobriety she had ever achieved was less than a week. After 17 days she was denied more inpatient by a Prest psychiatrist with a 100% denial rate. The denial was upheld by an Anthem geriatric psychiatrist with 88% denial rate who said on a recorded line: “I see she needs treatment, but this is not that kind of discussion. This is to determine payment.”
Patient #2 had been drinking heavily for more than 10 years to cope with his anxiety and depression. His drinking only helped short term and negatively impacted his relationships, marriage, motivation, and physical health. Client's liver enzymes were "off the chart" when admitting. After 10 days of inpatient treatment ASAM criteria confirmed he needed additional time in a 24/7 facility because he still lacked the tools to cope with the negative thoughts that triggered his drinking: brain fog, anxiety, depression, and grief (a cousin, also an alcoholic, had committed suicide which he was struggling to process). Client was heavily reliant on anxiety medication and had not yet learned sufficient healthy coping tools to independently manage his emotions. A Prest psychiatrist with a 43% denial rate denied him the additional days, The denial was upheld by an Anthem psychiatrist with a 100% denial rate.
Patient #3 was separated from her husband and living alone. She had been drinking tequila and other hard liquors daily for two years, suffered from Celiac Disease, major depressive disorder, generalized anxiety disorder and PTSD. After 14 days, needed additional inpatient days were denied by a Prest family doctor with a 100% denial rate. The denial was upheld by an Anthem child psychiatrist with a 74% denial rate. She said: “It is well documented and widely published that addiction is a chronic brain disease. Isolation is extremely dangerous for addicts in early recovery. It is inconceivable that Anthem doctors decided about my health and well-being without considering the totality of my condition and determined attending remote outpatient groups three days a week, three hours a day would keep me sober.” She paid for the additional days which Anthem randomly reimbursed -- as if she only had a substance use disorder on Mondays, Wednesdays, Fridays and Sundays, but not Tuesdays, Thursdays and Saturdays.
Patient #4 is a 52-year old married empty nester, a bookkeeper/accountant for a family business with a long history of opioids (Norco) prescribed by a pain-management MD due to 20 years of chronic pain, as well as a history of self-medicating with alcohol for depression and anxiety. Her drug and alcohol put a strain on her relationship with her children, brothers, and husband. After 16 days of inpatient, she remained a very high relapse risk, still unable to cope and emotionally self-regulate. She was denied additional days by a Prest family doctor with a 100% denial rate after having stated on a recorded line: “That’s good that she is in treatment.” The denial was upheld by an Anthem geriatric psychiatrist with 88% denial rate. She says: “I can honestly say I was not ready to leave. At that point in my recovery, I was cloudy --not able to put thoughts together, read, comprehend, or deal with emotions. If I had gone home then, I would have relapsed immediately. I remember sitting with a recovery friend crying, and later calling my husband from the center still crying.”
Patient #5 is a 40-year-old married business analytics manager with two small children. He had been a problem drinker for 10 years. A previous attempt at sobriety had failed. He came to treatment after being kicked out of his home by his wife. After 15 days he was told to go home and attend outpatient by an “external” Prest psychiatrist with a 100% denial rate, upheld by an Anthem geriatric psychiatrist with an 88% denial rate who admitted on a recorded line he knows ASAM criteria but did not use them. The patient said: “If I had left residential treatment early, I probably would have relapsed, lost my job and my family. I know from experience that while I am drinking, my mind stops responding to reason--even if it means getting arrested, stealing something, driving recklessly, injuring myself or others, and making stupid decisions.”
Patient #6, a 38 years old senior manager had a long history of daily drinking. When it got to 750 ml of whiskey a day, which he drank at work and at home, he had a seizure. He tried to quit on my own and managed to stay sober for a month but triggered by stress at work started drinking again. He had lost 20 pounds drinking more than he was eating. He also suffered from anxiety, panic disorder and depression. His family intervened. He felt he needed to get back to himself and have normal relations with his wife and start a family. He needed to be present for her and not hungover at work anymore. After 20 days of inpatient treatment Summit’s board certified ASAM doctors asked for his inpatient stay to be extended, based on ASAM criteria. That request was denied by a Prest child and adolescent psychiatrist with a 75% denial rate, and confirmed by three Evernorth (Cigna) psychiatrists with denial rates from 60-100%.
Patient # 7’s fiancé of five years took back her engagement ring and moved out because she could not stop drinking. She experienced thoughts of wanting to die. She had been drinking for 11-years straight, with 28 days of sobriety once, the result of a health challenge at the gym. She had been taking anti-depressants since February 2019 with minimal improvement noted. She detoxed privately and then entered residential treatment. An Aetna child psychiatrist refused to authorize any days at all, then relented and gave her 5 days for “crisis stabilization.” Period. The patient wrote: “What made the doctor think I could go home to an empty bedroom and an empty bed that until just recently I had been shared with the love of my life? I would have drunk myself into a stupor. I needed the structure that only 24/7 residential treatment could give me to manage my mood symptoms and emotional states without self-medicating with alcohol.”
The widow of patient #9 said that after 29 years at the same company, her husband was laid off during the pandemic. He continued to get into his car every morning and drive off as if going to work, but instead parked somewhere and drank. When he returned in the evenings, life was hell for his family. He finally agreed to go to treatment. After 19 days he was denied additional inpatient treatment by a Prest psychiatrist with a 57% denial rate whose decision was upheld by an Anthem psychiatrist with a 100% denial rate. His widow told me: “Alcoholism is an insidious, cumulative, deadly disease and in June of this year it likely played a huge part in what led to my husband’s death. He suffered cardiac arrest in our home. I keep wondering how it could have been for him if he had truly gotten the full time he needed at Summit, not a shorter stay. He was at the point where he could finally engage in therapy and other sessions needed for him to learn how to stay sober. He had started to open-up and have a sliver of hope. The denial greatly impeded his ability to focus and feel secure about the situation. It was discouraging, and distracting. What he needed were the tools to stay sober. To learn how to deal with what life throws our way that for him were triggers to self-medicate.”
POTTER v. BLUE SHIELD OF CALIFORNIA LIFE AND HEALTH INSURANCE COMPANY
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Case No. SACV 14-0837-DOC (KESx).
JOHN POTTER, Plaintiff, v. BLUE SHIELD OF CALIFORNIA LIFE AND HEALTH INSURANCE COMPANY, Defendant.
United States District Court, C.D. California, Southern Division.
PACIFIC SHORES HOSPITAL v. UNITED BEHAVIORAL HEALTH
United States Court of Appeals,Ninth Circuit.
PACIFIC SHORES HOSPITAL, Assignee, Plaintiff–Appellant, v. UNITED BEHAVIORAL HEALTH; Wells Fargo & Company Health Plan, Defendants–Appellees.
No. 12–55210.
Decided: August 20, 2014
…UBH formally notified PSH of its decision not to pay for acute inpatient treatment beyond February 14 in a letter dated February 18. On February 23, Nurse Wolpert requested on Jones's behalf an “urgent appeal” of Dr. Zucker's denial of benefits coverage for inpatient hospital treatment after February 14. On either February 23 or 24, the appeal was referred by UBH to Dr. Barbara Center of Prest & Associates. Dr. Center spoke by telephone to Dr. Fredrick on February 24 and on the same day sent written findings to UBH. Dr. Center wrote:
On February 24, the same day UBH received Dr. Center's report, Dr. William Barnard, UBH Assistant Medical Director, denied PSH's appeal. In a letter addressed to Jones, he wrote:
As requested, I have completed a first level urgent appeal review on 2/24/2010 on a request we received on 2/23/2010.
This review involved a telephone conversation with your provider. After fully investigating the substance of the appeal, including all aspects of clinical care involved in this treatment episode, I have determined that benefit coverage is not available for the following reason(s):
(Emphasis added.) Dr. Barnard then quoted nearly verbatim the three numbered paragraphs contained in Dr. Center's report.
…UBH fell far short of fulfilling its fiduciary duty to Jones. Dr. Zucker, UBH's primary decisionmaker, made a number of critical factual errors. Dr. Center, as an ostensibly independent evaluator, made additional critical factual errors. Dr. Barnard, UBH's final decisionmaker, stated that he arrived at his decision to deny benefits “after fully investigating the substance of the appeal.” He then rubber-stamped Dr. Center's conclusions. There was a striking lack of care by Drs. Zucker, Center, and Barnard, resulting in the obvious errors we have described. What is worse, the errors are not randomly distributed. All of the errors support denial of payment; none supports payment. The unhappy fact is that UBH acted as a fiduciary in name only, abusing the discretion with which it had been entrusted.
Conclusion
Reviewing for abuse of discretion, we conclude that UBH improperly denied benefits under the Plan in violation of its fiduciary duty under ERISA.
REVERSED.
W. FLETCHER, Circuit Judge:
Denied
When insurance companies deny the mentally ill the treatment their doctors prescribe, seriously ill people are often discharged, and can be a danger to themselves or others
The following is a script from "Denied" which aired on December 14, 2014, and was rebroadcast on August 2, 2015. Scott Pelley is the correspondent. Michael Rey and Oriana Zill-de Granados, producers.
Two years and a half years ago, we were reeling from the shock of the murders of 20 first graders and six educators at Sandy Hook Elementary School. Since then, we've learned that the killer suffered profound mental illness. His parents sought treatment but, at least once, their health insurance provider denied payment. Because of recurring tragedies and an epidemic of suicides, we've been investigating the battles that parents fight for psychiatric care.
As we first reported in December, we found that the vast majority of claims are routine but the insurance industry aggressively reviews the cost of chronic cases. Long-term care is often denied by insurance company doctors who never see the patient. As a result, some seriously ill patients are discharged from hospitals over the objections of psychiatrists who warn that someone may die.
Katherine West
In the pictures, there's no sign of the torment of Katherine West. But by the age of 14 she was wasting away, purging her food. Nancy West, Katherine's mother, was told by her doctors that the bulimia was rooted in major depression.
Nancy West: In fact, prior to the eating disorder, she was cutting so there were self-harming behaviors from, I would probably say, at least 12 on.
To stop purging she had to be watched around the clock. Her doctors prescribed treatment that could cost more than $50,000 at a hospital, for 12 weeks.
Scott Pelley: The insurance company stopped paying after six weeks?
Nancy West: Six weeks pretty much was it for them. They were done. And if you know about a mental illness, you don't cure a mental illness in six weeks.
The health insurance company was Anthem, second largest in the nation. An Anthem reviewer found Katherine should leave the hospital because she had put on enough weight. Her doctor warned that she was desperate to shed those pounds.
Nancy West
CBS NEWS
Nancy West: They were telling the insurance company, "She needs to stay here. She needs more long-term treatment. She isn't ready for this."
The insurance company overruled the doctor. Katherine West came home as an outpatient.
Nancy West: I was texting her, no response. I got home at 12:30 that day and I found my daughter in bed. She'd been gone for hours. And I just remember running through the house screaming. I couldn't believe it. My beautiful girl was gone. She was gone.
Katherine was dead at the age of 15. As her doctors predicted, she'd been purging again, which led to heart failure.
Scott Pelley: Did it make sense to you that a doctor at the insurance company was making these decisions based on telephone conversations?
Nancy West: No. No, they didn't observe my daughter. You're talking about a psychiatrist, a pediatrician, a therapist who observed my daughter on a daily basis. But some nameless, faceless doctor is making this decision. And I was furious. Because basically to me he was playing God with my daughter's life.
The kind of review that resulted in the discharge of Katherine West works like this; after a patient is admitted, an insurance company representative starts calling the doctor every day, or every few days. If that representative decides that the patient is ready for a lower level of care, then the case is referred to an insurance company physician who reads the file, calls the doctor and renders a judgment. We have found in these chronic, expensive cases that judgment is most often a denial. How often the results are tragic, no one can say. But we have found examples.
"...some nameless, faceless doctor is making this decision. And I was furious. Because basically to me he was playing God with my daughter's life."
In 2012, Jacob Moreno's further hospitalization was denied even after a doctor warned, "the patient states that he wanted to kill other people, many people." The next day, Moreno was naked in the street, swinging at strangers and attacking a police officer. They used a Taser to take him down. The state ordered him back to the mental hospital. Richard Traiman's hospital stay was also cut short. As he was being discharged, he said he would throw himself off a bridge. He didn't. He hung himself the next day.
Harold Koplewicz: They're called managed care, but it's really managed cost.
Dr. Harold Koplewicz knows insurance review calls well, he's a leading psychiatrist and founder of a research organization, the Child Mind Institute.
Harold Koplewicz: When I was running an inpatient unit, I would have to literally speak to a clerk on the phone to say, "I need approval for this patient to stay here another five days." And they would say to me, "Well, is the patient acutely suicidal or acutely homicidal?" "Well, not right now because he's in the hospital. We took the knife away. We took the gun away. We took the poison away." And they would say, "Well, then why does he have to be in the hospital?" You think to yourself, "Am I in--is this Oz?"
Scott Pelley: The insurance company wants to send 'em home?
Harold Koplewicz: Well, it's a lot cheaper in the short run. And if you're managing costs on a quarterly basis, you can understand why from a business point of view for that quarter it makes sense. For the sake of the child, for the sake of our society, for the sake of the child's future it doesn't make any sense
Of all the cases we looked at, one of the most revealing was Ashley's. She suffers from bipolar disorder.
Ashley: In 2012, I had had a suicide attempt. I couldn't find a way out.
Scott Pelley: Was this a cry for help or did you want to die?
Ashley: This one was real. I was alone. I tried my best.
Ashley's mother, Maria, asked us not to mention the family name.
Maria: One of the doctors told me on the phone, "I'm really sorry, but you will probably bury your daughter."
In 2012, Ashley was in the hospital for the fourth time that year. They thought they had taken away everything that could hurt her. But she smashed her cell phone and cut her wrists with the glass.
Scott Pelley: What did that tell you, in terms of the treatment that she needed?
Maria: It told me that she needed long-term treatment to survive.
Maria says that Anthem recommended treatment at Timberline Knolls, a residential facility. A doctor said Ashley needed 90 days. But after sending her to Illinois from California, Anthem denied payment after six days saying that Ashley could be, "safely treated with outpatient services."
Scott Pelley: Did the people at Timberline Knolls believe that?
Maria: No, they didn't--
Scott Pelley: That she was well?
Maria: No. They absolutely didn't believe it. They gave us the option of paying $22,000. For-- to complete the 30 days. And at that, we-- there wasn't a chance that we could do that.
Now, look at how Ashley's care was denied. This log shows Dr. Tim Jack, a psychiatrist working on behalf of Anthem, called Ashley's doctor three times in 32 minutes. One call was disconnected. He left two messages. Dr. Jack waited 22 minutes for a call back, and then denied coverage. From the first call to denial, 54 minutes, speaking to no one.
Why so fast? Well, it may be, in part, because many insurance doctors are paid by the case. Dr. Jack, is a contractor who gets $45 per patient. In court records, Dr. Jack says he does 550 reviews a month. So, working from home, that comes to $25,000 a month. We spoke to 26 psychiatrists from across the country, and every one brought up Dr. Jack's name. Some called him "Dr. Denial." This is a recording of Dr. Jack telling a physician that a patient's level of care should be lowered.
Dr. Tim Jack: Because given what his current progress is and his current symptoms are, he can be managed at a lower level of care as effectively as in an intensive outpatient program.
Doctor: You know doctor, I just want to say that I have spoken to you on so many different occasions, and with so many different clients, and I've never really had a positive outcome as far as authorization from you, so...I just needed to bring that to your attention.
Dr. Tim Jack: This is not a personal matter.
Doctor: I understand sir, but the client appears to meet the criteria, so...
We found Dr. Jack's denial rate averaged 92 percent in one six month period in 2011. But that was typical among 11 reviewers contracted by Anthem. Some of them had denial rates of 95 and 100 percent.
Scott Pelley: What's the impact on a family after a phone call like that?
Kathryn Trepinski: Devastating.
Kathryn Trepinski is a lawyer who represents patients. She does not represent Ashley's family, but she has filed suit against Anthem and other insurers.
Kathryn Trepinski: There's untold suffering and the family is usually left in the very difficult-- position of either paying for the care out of pocket, which is tens of thousands of dollars. Or they say no to their loved one, to their child.
Anthem says that reviews are checked by a supervising doctor but when we obtained Ashley's denial letter we found her review by Tim Jack, MD, was supervised by Timothy Jack, MD.
Scott Pelley: So he signs the documents twice?
Kathryn Trepinski: Yes, except that he doesn't actually sign them himself. It's a robo-signature.
Dr. Jack has acknowledged an Anthem computer put his name to letters he doesn't see and on cases he didn't review.
Kathryn Trepinski: It suggests a layer of review that's not there. Because the signing doctor is described in the letter as having made that coverage determination and he didn't.
We tried to reach Dr. Jack in calls and a letter. We stopped by his home. But he declined to speak. Katherine West's and Ashley's parents gave us permission to ask Anthem about their cases. Anthem declined an interview but its chief medical officer wrote that they, "explored and provided the...families numerous care options that went beyond their covered benefits." He goes on to say "successful outcomes require a partnership between [sic] patients, families, medical professionals and health plans."
For the insurance industry's view, we found Anthem's former California medical director, Dr. Paul Keith. He retired in 2014 after years supervising Anthem reviews, including those of Dr. Jack. He told us that, too often insurance companies are abused by care providers.
Dr. Paul Keith
CBS NEWS
Dr. Paul Keith: Doctors will spin the clinical information. They will make things appear more serious than, perhaps, they are, because they feel strongly the patient needs this level of care for a little longer. So you do have a somewhat adversarial relationship between the reviewer and the attending physician.
Scott Pelley: You're saying the-- the doctor will overstate the case to get the insurance company to approve the client?
Dr. Paul Keith: Unquestionably that happens. Not all the time and I've been doing this for, you know, over 30 years.
Scott Pelley: You describe these conversations as "adversarial," is that best for the patient?
Dr. Paul Keith: Well, it's like our legal system if you, each side, does a good job in presenting their case and asking the right questions, you ultimately arrive at the truth.
Scott Pelley: But these can be life and death decisions and you don't know till it's too late.
"Doctors will spin the clinical information. They will make things appear more serious than, perhaps, they are, because they feel strongly the patient needs this level of care for a little longer..."
Dr. Paul Keith: I cannot, offhand, think of a situation where a decision was made to discharge a patient from a hospital and some terrible consequence occurred soon thereafter. I'm sure it happens, but--
Scott Pelley: We found quite a few.
Dr. Paul Keith: I'd have to look at them to see. There's one that occurs to me that I was involved with where the child left the hospital with his parents, escaped from his parents, drove cross country to another state, and days later, committed suicide. Keeping that individual in the hospital longer is not likely to have made any difference.
Scott Pelley: I would have to imagine that the parents would say, "If you'd kept him in the hospital, he wouldn't have been in another state killing himself."
Dr. Paul Keith: Parents become fearful that if they leave too soon, the same thing's gonna happen that may have happened in previous occasions, but you can't keep an individual in the hospital forever.
Scott Pelley: So to the parent who says the insurance company is just trying to get my child out of the hospital, you say what?
Dr. Paul Keith: It's half true; the insurance company may very well want that child to go to a lesser level of care, but money is not the basis for the decision.
Scott Pelley: A lot of people watching this interview are gonna have trouble with the idea that insurance companies are not trying to save money.
Dr. Paul Keith: Of course, your insurance companies are trying to save money. There's a lot of treatment that is not medically necessary that is provided, and that is a waste of healthcare dollars and the resources are scarce.
Ashley's family hired a lawyer and appealed to the California Insurance Board which overturned Anthem's denials. Now, she is in treatment for bipolar disorder, treatment that may last a lifetime. After Katherine West was buried, her mother filed suit against Anthem.
After the mass murder at Newtown, the state of Connecticut's Sandy Hook Commission studied mental health. In its final report, it says the insurance review process a "formidable barrier... to care" and it recommends a state agency review all denials.
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Scott Pelley
Anchor and Managing Editor, "CBS Evening News;" Correspondent, "60 Minutes"
