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Home / Articles / News / Features /  Psyched Out

Psyched Out

Patients are being pushed aside because of profits and policies

May 25, 2011, 1:00 am

Christus St. Vincent Regional Medical Center CEO Alex Valdez hasn’t released the results of a recent “utilization study” examining how to make the hospital’s inpatient psychiatric unit lose less money for Christus.
Credits: File Photo

CSV’s shift away from inpatient psychiatric care is part of a national sea change that has been underway since the 1950’s, when antipsychotic drugs were developed. 


After the introduction of Thorazine, an antipsychotic similar to Haldol, former President John F Kennedy authorized $3 billion in federal spending to create outpatient mental health clinics that would largely replace institutions. An estimated 400,000 mental patients were deinstitutionalized between 1960 and 1980. The basic philosophy of deinstitutionalization still has broad support today.


“People can actually be supported in their community and live a productive life like everybody else,” Boschelli says. “So the stigma of mental illness and substance abuse is decreased proportionally.”


Boschelli says that, at any one time, about 10 of the 50 PACT Team clients is “on the verge of a psychiatric hospitalization,” but the majority of the time, they can be stabilized without admission to the ED. 


Santa Fe Municipal Court Judge Ann Yalman, who deals with many mentally ill individuals through the city’s Homeless Court program, says the PACT Team is effective but limited in scope because it only works with its established clients. Even for PACT Team clients, the program doesn’t obviate the need for emergency psychiatric care for people in acute, potentially dangerous mental states. 


The PACT Team’s charge to assist individuals who would otherwise rack up the most hospital bills points to a major motivating factor behind the deinstitutionalization trend: money.


Behavioral health problems tend to be obstacles to steady employment, meaning many behavioral health patients are either completely uninsured, covered by Medicare or covered by Medicaid. 


Medicare is a federally funded and administered health insurance for those over 65 or unable to work because disabilities. Medicare sets reimbursement limits for various services, aiming to cover about 80 percent of the cost, and sets a lifetime limit on inpatient psychiatric unit use of 190 days. 


Medicaid is a federally funded but state-administered insurance for impoverished people who meet certain other criteria. Since about half of the PACT Team patients are Medicaid recipients, it’s logical to assume that a sizeable proportion of those who seek emergency psychiatric services in Santa Fe are on Medicaid. 


Before 2004, the state Human Services Department administered Medicaid payments to a slew of different behavioral health care providers, a system deemed confusing and difficult for patients to navigate. In 2004, the state Legislature created an interagency body that oversees a private company responsible for managing all Medicaid payments to behavioral health providers.


A company called ValueOptions New Mexico held this contract until July 2009. At that time, OptumHealth New Mexico, a subsidiary of the nation’s largest insurer, United HealthCare, took over the contract. OptumHealth now determines how much to reimburse CSV for treatment of patients at the IPU, just as private insurers decide how much to pay CSV back when their customers receive services there.


Under its contract with the state, OptumHealth can keep as profit unspent money that it receives from the state each month which is designated for members’ services.


A 2011 report to stakeholders issued by OptumHealth provides insight into the company’s philosophy on inpatient care. The publication trumpets reduced IPU use in several other states where OptumHealth holds managed care contracts. In Washington, IPU use went, in less than a year, from 19.6 annual inpatient days per 1,000 patients to 12.1 annual inpatient days per 1,000, according to the report. In New York, the average length of stay at inpatient facilities went, in a two-year span, from 55 to 11 days under OptumHealth’s watch.


But consolidating behavioral health services under one for-profit company tends to create “monetary incentives to withhold services and divert [funds] to administration and profit,” according to a 2004 study of New Mexico’s behavioral health care system published in the journal Psychiatric Services. In 2005 and 2006, the Legislative Finance Committee wrote, in audit reports to the state Behavioral Health Collaborative, that it was concerned about the practice of paying a managed health care company a set monthly rate in advance rather than reimbursing it for services after the fact—the same payment arrangement used with OptumHealth today. The LFC wrote that the practice “reduced [the state’s] leverage to require the contractor to perform adequately.” 


According to HSD spokeswoman Betina McCracken, Medicaid reimburses CSV approximately $485 per IPU patient per day, significantly less than the amount one privately insured patient was charged for a treatment she received there after a panic attack. That patient’s attorney, Walt Schliemann, tells SFR that the woman’s insurance was billed $3,394 for a hospital visit in which she was (perhaps incorrectly) diagnosed as bipolar after a 20-minute consultation and injected with Haldol. 


Montoya, the woman who helped her schizophrenic friend gain admission to the hospital, says it appeared CSV was reluctant to admit him because he wasn’t a private pay patient. 


“When I pushed, I found out it was all about money…[the social worker] said he didn’t meet the criteria, and I’m like, ‘The criteria for what?’ And it was the criteria with regard to insurance, and that potentially his family would have to pay [the rest of the cost],” Montoya says. 


Dasari says CSV “provide[s] services for anybody in need of services.” Under federal regulations, IPUs receiving Medicare money are not permitted to use different admission criteria for patients using different payment methods.

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