The Impact of Managed Care on Mental Health Counselors: A Survey of Perceptions, Practices, and Compliance with Ethical Standards

By Danzinger, Paula R.; Welfel, Elizabeth Reynolds | Journal of Mental Health Counseling, April 2001 | Go to article overview

The Impact of Managed Care on Mental Health Counselors: A Survey of Perceptions, Practices, and Compliance with Ethical Standards


Danzinger, Paula R., Welfel, Elizabeth Reynolds, Journal of Mental Health Counseling


A sample of 108 mental health counselors in four states was surveyed about their experiences and perceptions of the impact of managed care on their work with clients and the effects of managed care on their compliance with professional ethics. The majority reported that managed care has negatively affected their work with clients and that the protection of the confidentiality of client disclosures has been the most troublesome ethical issue. The study revealed gaps in accuracy of diagnosis, appropriateness of treatment, management of termination, and informed consent procedures with managed care clients. It also showed limited use of ethics codes and other resources developed to help professionals resolve ethical questions responsibly.

The advent of managed mental health care into community mental health has caused "an upheaval in the practice community" (Acuff et al., 1999, p. 563) and has engendered intense emotion among counselors and other mental health professionals. Research has shown that the majority of mental health professionals find the requirements of managed care organizations (MCOs) a substantially negative influence on their practice (Murphy, DeBernardo, & Shoemaker, 1998; Phelps, Eisman, & Kohout, 1998; Russell et al., 2000; Sank, 1997) and a challenge to compliance with professional ethical standards (Bilynsky & Vernaglia, 1998; Phelps et al., 1998; Murphy et al., 1998; Rothbaum, Bernstein, Haller, Phelps, & Kohout, 1998; Watt & Kallmann, 1998; Wineburgh, 1998). While some practitioners are bypassing managed care and bypassing managed care methods of providing clients with effective and cost efficient mental health services (Bittner, Bialek, Nathiel, Ringwald, & Tupper, 1999), most are trying to identify ways to practice responsibly within a managed care system. Because of its dominance in the marketplace, eschewing managed care is not an option for most mental health counselors in the foreseeable future (Acuff et al., 1999; Corcoran & Vandiver, 1996; Richardson & Austad, 1991). According to Kiesler (2000), 88% of U.S. citizens with private insurance are enrolled in behavioral health plans nationwide and in California that number rises to nearly 100%. Moreover, governmental programs such as Medicare and Medicaid are also moving toward managed care systems.

A growing body of literature has identified the numerous ethical challenges that managed care presents to mental health professionals (Acuff et al, 1999, Cooper & Gottlieb, 2000; Glosoff, 1998). These challenges fall into two broad categories: (a) difficulties in supporting the client's right to quality care as a priority over the professional's relationship with the reimburser and (b) problems in protecting the privacy of client disclosures. Managed care presents mental health professionals with conflicts-of-interest and a feeling of divided loyalties (Strom-Gottfried, 1998; Watt & Kallmann, 1998) as they try to promote the welfare of clients. Because treatment plans must conform to MCO protocols (Miller, 1996) and be approved by MCO representatives in order to get payment for reimbursement, counselors are not free to plan and implement treatments independently. When their professional judgments differ from MCO protocols, counselors feel pressured to decide whether to use treatment plans they view as inferior (thereby risking harm to the client) or risk the denial of reimbursement (and lose a source of income).

Other aspects of quality care can also be at risk. When client diagnoses do not fall within reimbursement guidelines, mental health professionals feel pressure to choose between honest and accurate diagnosis without third party reimbursement payment and deceptive diagnosis in order to gain reimbursement. Specifically, practitioners may be tempted to "upcode" (Cooper & Gottlieb, 2000, p. 199), giving an acute problem a more severe diagnosis than presenting symptoms warrant for an acute problem, or to "downcode" (p. …

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