Managed care raises fundamental questions about the moral presuppositions of mental health insurance coverage. Which kinds of mental suffering create a legitimate claim for assistance from others through health insurance? When should individuals be responsible for correcting their own deficits of happiness or well-being, or for the disadvantages they suffer? And even if society concludes that an individual is entitled to assistance from others, when does this obligation fall to friends, families, or other social agencies, rather than to the health insurance system? This paper attempts to address these questions.
The concept of "medical necessity" is currently the major tool for allocating public and private insurance monies. Medicare and Medicaid both determine coverage by reference to "medical necessity," and with regard to managed care, the Institute of Medicine concluded that "utilization review decision(s) invariably turn on whether a treatment or service is `medically necessary.'" To promote equitable access to mental health care, we must first understand how "medical necessity" actually functions in practice as a principle of allocation and gatekeeping.
Many insurance administrators believe that judgments about medical necessity in mental health are less precise than similar judgments in other areas of medicine. As a result they fear that if mental health services were given parity with other medical services - a primary objective for the American Psychiatric Association - insurance funds will be siphoned into a "bottomless pit."
In previous work on home care and in vitro fertilization we have shown that determinations of medical necessity often rest on a range of moral considerations as well as clinical facts. This paper reports the results of a study of difficult insurance coverage decisions brought to us by mental health clinicians and reviewers in a managed care setting. We explored these cases with the involved personnel by applying elements of the Socratic approach - eliciting the clinician's (or reviewer's) considered views, varying crucial components of the case, and examining the effects on their reasoning about medical necessity.
This process revealed a recurrent conflict between what we call "hard-line" and "expansive" views of medical necessity. Although this conflict often surfaces as disagreement about medical facts and diagnosis, we believe that it frequently reflects unrecognized moral disagreement about the targets of clinical intervention and the ultimate goals of psychiatric treatment. In six case studies we examine the reasoning behind the determinations of medical necessity. In the discussion we present three models for defining medical necessity that can be discerned in the clinical reasoning, and propose what we regard as a defensible rationale for how the concept of medical necessity can be used in the administration of health insurance benefits.
Since 1 January 1991 the Harvard Community Health Plan (HCHP), a staff and group model HMO serving 550,000 members in New England, has offered unlimited outpatient coverage ("extended benefit") to patients with severe psychiatric and substance abuse disorders for medically necessary treatment, defined as case management, medication management, crisis intervention, and continuing care group. "Regular benefit" comprises other forms of treatment for these patients and all treatment except medication management for those with less severe conditions, with an increased copayment after eight sessions and a full fee after twenty. The following (disguised) cases are drawn from that insurance context.
Case 1: The Shy Bipolar. SB is the older of two children in a middle-class family. He is said to have been a happy, outgoing child until the second grade, when his father developed a depressive condition and his mother …