Managed Mental Health Care: Intentional Misdiagnosis of Mental Disorders

By Braun, Sharon A.; Cox, Jane A. | Journal of Counseling and Development : JCD, Fall 2005 | Go to article overview

Managed Mental Health Care: Intentional Misdiagnosis of Mental Disorders


Braun, Sharon A., Cox, Jane A., Journal of Counseling and Development : JCD


Managed mental health care has significantly affected the counseling profession. Managed care guidelines determine whether and how counselors deliver services and whether services are reimbursable. Counselors are particularly challenged when insurance reimbursement is denied because managed care organizations (MCOs; Danzinger & Welfel, 2001; Glosoff, 1998) are not honoring codes in the American Psychiatric Association's (APA's; 2000) Diagnostic and Statistical Manual of Mental Disorders. (Note: For the purposes of this article, unless otherwise specified, the notation DSM refers to the manual in a general sense.) Clients may not be able to afford out-of-pocket pay for treatment. Hence, counselors and clients may agree to submit inaccurate mental health diagnoses that are reimbursable so that clients can receive counseling. Wylie (1995) called this practice "diagnosing for dollars" (p. 22). Rappo (2002) emphasized that it is health cost that is being managed versus health care.

In this article, we provide an overview of the effectiveness of managed health care systems and their impact on mental health counselors. We review ethical and legal dilemmas involving informed consent, confidentiality, client autonomy, competence, treatment plans, and termination that had not existed prior to the introduction of managed health care systems. We outline the relationship between the DSM and insurance reimbursement for delivery of services and examine how MCO regulations regarding certain diagnostic codes prompt intentional misdiagnosis of mental disorders for insurance reimbursement. We provide reasons why insurance reimbursement is denied based on certain DSM diagnostic codes. We examine violations of the American Counseling Association's (ACA; 1995) Code of Ethics and Standards of Practice and the American Mental Health Counselors Association (AMHCA; 2000) "Code of Ethics of the American Mental Health Counselors Association" in relation to intentional misdiagnosis of mental disorders for receipt of insurance reimbursement, as well as legal consequences surrounding this issue. We consider implications for counselors and offer suggestions for professional conduct regarding intentional misdiagnosis.

During the 1980s, MCOs emerged as an approach to curb spiraling health care costs. Burgeoning expenditures involving health care maintenance captured the nation's attention to the extent that significant measures had to be taken to control health care spending. Despite efforts made during the 1980s to contain health care spending, the U.S. Department of Justice Health Care Fraud Report Fiscal Years 1995 & 1996 (1997) indicated that health costs still exceed 1 trillion dollars each year.

In general, managed health care involves consumers, medical and mental health professionals, hospitals and nursing homes, and mental health agencies that fall under mandates of MCOs such as health maintenance organizations, managed mental health care organizations, preferred provider organizations, independent practice associations, and Medicare and Medicaid. The primary function of MCOs is to form relationships among payers, providers, and consumers so that services and their outcomes are influenced and monitored (Cuffel, Snowden, Masland, & Piccagli, 1996). MCOs also define and determine access and delivery of health care services, as well as regulate distribution of insurance reimbursement.

* Effectiveness and Impact of Managed Care

Varying viewpoints exist regarding the effectiveness of managed health care during the 1980s and 1990s. Some authors believed that managed care was a realistic method of controlling cost while maintaining quality health care (Cummings, Budman, & Thomas, 1998). Others thought that cost containment initiatives would reduce consumer insurance premiums while lowering costs for the insurance industry (Johnsen, 1994). Even though progress was made regarding cost containment, quality of care was not emphasized to the extent necessary (McCarthy, Gelber, & Dugger, 1993). …

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