Guardians of Necessity: How Insurance Companies Enhance Psychiatric Care

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COMMENTARY

The insurance industry is subject to consistent criticism and blame for deficiencies in our health care system, and insurance companies are often despised by stakeholders in the continuum of care. Patients dislike insurance companies for refusing to pay for their care. Providers dislike insurance companies for denying reimbursement for their treatment. Hospital administrators dislike insurance companies as an unnecessary cost that lowers profit margins. Politicians frequently tout insurance reforms to satisfy the stakeholders listed previously. Yet it is important to recognize the value that insurance companies add in providing coverage for psychiatric care.

Some Americans unrealistically expect insurance to cover all desired treatments without question and without oversight, an expectation that includes choosing any provider and having whatever tests or treatment prescribed by that provider covered in full regardless of the cost or documented effectiveness. They want all of this, all while keeping insurance costs affordable for everyone in a society where obesity and inactivity is prevalent, and tobacco, alcohol, and other substances are often abused.

The murder of United Healthcare CEO, Brian Thompson, is an example of the public’s frustrations. As a testament to the motive, the words “delay,” “deny,” and “depose,”¹ were engraved into the deadly cartridges. Yet rather than condemning the murder of this man, some of the public and media justified the murder as a testament to the vilification of insurance companies and the individuals who work for them. Articles mentioned the “public outrage at the health care system in the wake of the killing,”² rather than outrage at the killer. Headlines included “Brian Thompson's death has elicited little sympathy. I don't need to spell out why”³ and “Why so many people celebrated the death of Brian Thompson.”⁴

US health care is far from perfect. There are certainly opportunities for our health care insurers to improve their customer service and enhance their coverage. That said, the inappropriate response to Thompson's death provides an opportunity to reflect on some of the attributes of our health care insurance companies.

Psychiatric Treatment Is Not Always the Solution

A 2023 study by Harvey et al looking at the universal use of dialectical behavioral therapy in teenagers at Australian high schools found that students exposed to the intervention “reported significantly increased total difficulties.”⁵ A 2023 meta-analysis by Li et al found that exercise, in particular team sports, was an effective treatment for youth with depression.⁶ These studies are examples that patients may be harmed by treatment or may be appropriately served by nonmedicalized interventions; a healthy insurance system can be an entity to advocate for appropriate interventions in the right scenarios.

Psychiatric Diagnoses and Assessment Can Be Subjective

There are areas of subjectivity in psychiatry that require oversight, which insurance companies can provide. As demonstrated in the DSM-5 field trials, the intraclass kappa (the likelihood of 2 raters having the same diagnosis) was 28% for depression, 56% for bipolar disorder, and 46% for schizophrenia.⁷ As described by Allen Frances, MD, “the results it produced were an embarrassment… barely better than two monkeys throwing darts at a diagnostic board.”⁸ Under that consideration and problems with overdiagnosing, a healthy insurance system can serve as a restraint in overzealous diagnosing.⁹

Providers May Misuse the System

Insurance reviewers may evaluate the individual's reported symptoms, exam findings, and test results to determine whether they are consistent with the reported diagnoses and the recommended treatment. During their assessment, a reviewer may request copies of test results needed to confirm a diagnosis or level of impairment. For example, if an individual is claiming disability because of a nonunion fracture, copies of the x-ray reports may be requested to document the nonhealing bone fracture. It has been our experience that in psychiatry, mental status exams often change radically after an insurance denial or in response to specific questions from the insurance carrier. Additionally, while it is extremely unlikely for a thought process to shift from "linear and logical" to "incoherent and disorganized" after a claim is denied or challenged, this is not uncommon in our reviews.

Harmful Overprescribing and Polypharmacy

Overprescribing can take many forms. Overdose deaths of celebrities are the most mediatized examples, and while most are thought to be due to opioids, many involve benzodiazepines: Aaron Carter with alprazolam in combination with huffing¹⁰; Tom Petty with fentanyl, oxycodone, emazepam, alprazolam, citalopram, acetyl fentanyl, and despropionyl fentanyl¹¹; Prince with fentanyl¹²; etc. More recently, the case of Matthew Perry’s death involving the use of ketamine led to significant media attention.¹³

Adding to the problem of overprescribing are the online prescription companies that have little oversight or interaction with their patients. For instance, online psychiatry company Cerebral heavily relied on the accessible prescribing of ADHD medications, and as a result entered into a nonprosecution agreement of $3.6 million dollars for encouraging the unauthorized distribution of controlled substances.^14,15 It is these authors’ opinion that insurance companies have the ability to provide an important oversight to limit the reckless prescribing of medications that can be dangerous when used in a way that is not intended.

Unnecessary Involuntary Treatment

Involuntary treatment is an essential tool of the psychiatric clinician. While assessing the value of involuntary treatment in a randomized controlled manner is practically impossible due to legal regulations and responsibilities, courts have acknowledged that states have a legitimate interest in providing care to individuals “who are unable, because of emotional disorders, to care for themselves.”¹⁶ As granted by the Supreme Court in the case of O'Connor v Donaldson (1975), the state can confine dangerous individuals who are incapable of surviving safely.¹⁷ Courts have compared involuntary treatment with incarceration, describing its effect as “no different than the burdens associated with criminal prosecutions.”¹⁸ Yet inherent to any power dynamic, abuse will happen. Eight decades ago, Albert Maisel famously described the horrific treatment of psychiatric patients in state mental hospitals in an article that jump-started deinstitutionalization.¹⁹ Although conditions have undoubtedly improved, significant concern remains. A recent article by the New York Times exposed a private company, Acadia, reportedly exploited involuntary treatment for financial gain.²⁰ In scenarios like these, patients can be saved by the oversight of insurance companies that check the necessity of care.

Cases of Inadequate Care

Issues surrounding quality of care are complicated and often fraught with differing opinions. However, there are many interventions that are inadequate or at least deserve significant explanation. For example, the prescription of controlled substances to an individual with substance use disorder generally requires an explanation, and it may be appropriate for an insurance company to question a clinician. Insurance companies should be commended when, after appropriate questioning, it is recognized that an insured individual is not receiving appropriate care. In our practice, insurance reviewers frequently engage with providers, raising critical points about patient care. They often ask whether the prescribing clinician has (1) considered potential contraindications due to interactions with the cytochrome P450 enzyme system, (2) explored all FDA-approved options for treating specific conditions, like suggesting quetiapine for patients with bipolar depression, (3) considered whether other types of treatments like intensive outpatient programs are viable alternatives.

Not All Treatments Should Be Reimbursable

An insured individual with a musculoskeletal condition that would improve with physical therapy should have their therapy covered by their insurance carrier. It is, however, reasonable for an insurance carrier to deny reimbursement for physical therapy that has not been shown to improve the underlying condition or if a patient does not have a disorder that warrants therapy. Patients may present to a behavioral health provider to “explore themselves,” or vent, or to validate their beliefs. In such situations, it is reasonable for an insurance carrier to question the underlying diagnosis and the value of any interventions before approving reimbursement for therapy, much like frivolous plastic surgery. The belief that all care should be reimbursed without meeting a certain necessity threshold is unreasonable and cost prohibitive in any system of care, as there are limited resources. (Although there is something to be said about preventive or mental health wellness care.)

Concluding Thoughts

Although insurance companies are often vilified within the American health care narrative, their role in psychiatry can offer a counterbalance to potential overuse and misuse of psychiatric interventions. They serve as a necessary check against the potential for overprescription, inadequate care, and the misuse of involuntary treatments. By demanding evidence of medical necessity, insurance providers ensure that psychiatric care remains both effective and justified, protecting patients from unnecessary treatments and the system from exploitation. This oversight, though sometimes contentious, contributes to a more ethical and efficient use of psychiatric resources.

Moreover, the presence of insurance companies in the psychiatric care continuum encourages a broader conversation about what constitutes necessary treatment. It prompts clinicians, patients, and policymakers to critically evaluate the appropriateness of medical vs nonmedical interventions, promoting a holistic approach to mental health. Although no system is without its flaws, the critical role of insurance in psychiatry underscores the need for a balanced perspective where oversight is not just about cost containment but also about ensuring the quality and necessity of care. This nuanced role of insurance might not make them beloved, but it certainly makes their function in the health care system indispensable.

Dr Badre is a clinical and forensic psychiatrist in San Diego. He teaches medical education, psychopharmacology, ethics in psychiatry, and correctional care. Dr Badre can be reached at his website, BadreMD.com. Dr Alvino is a board-certified internist. He was employed by a fortune 500 insurance company for the past 28 years and served as their chief medical officer. Dr Alvino previously practiced internal medicine and geriatric medicine for 13 years in Bloomfield, CT, and was an assistant professor of medicine at the University of Connecticut. His opinions in this article are his own.

References

1. What we know about New York City shooting of UnitedHealthcare boss Brian Thompson. Sky News. December 10, 2024. Accessed February 13, 2025. https://news.sky.com/story/what-we-know-about-new-york-city-shooting-of-unitedhealthcare-boss-brian-thompson-13267264

2. Kopack S. UnitedHealth is contributing to the Dow's historic losing streak. NBC News. December 17, 2024. Accessed February 13, 2025. https://www.nbcnews.com/business/markets/unitedhealth-contributing-dows-historic-losing-streak-rcna184568

3. Mahdawi A. Brian Thompson’s death has elicited little sympathy. I don’t need to spell out why. The Guardian. December 7, 2024. Accessed February 13, 2025. https://www.theguardian.com/commentisfree/2024/dec/07/brian-thompson-unitedhealthcare

4. Duke A. Why so many people celebrated the death of Brian Thompson. The Washington Post. December 20, 2024. Accessed February 15, 2025. https://www.washingtonpost.com/opinions/2024/12/20/brian-thompson-ceo-killing/

5. Harvey LJ, White FA, Hunt C, Abbott M. Investigating the efficacy of a dialectical behaviour therapy-based universal intervention on adolescent social and emotional well-being outcomes. Behav Res Ther. 2023:169:104408.

6. Li W, Liu Y, Deng J, Wang T. Influence of aerobic exercise on depression in young people: a meta-analysis. BMC Psychiatry. 2024;24(1):571.

7. Regier DA, Narrow WE, Clarke DE, et al. DSM-5 field trials in the United States and Canada, part II: test-retest reliability of selected categorical diagnoses. Am J Psychiatry. 2013;170(1):59-70.

8. Frances A. Saving Normal: An Insider's Revolt Against Out-of-Control Psychiatric Diagnosis, DSM-5, Big Pharma, and the Medicalization of Ordinary Life. Mariner Books; 2013.

9. Badre N. A prescription for de-diagnosing. Clin Psych News. June 13, 2022. Accessed February 15, 2025. https://www.mdedge9-ma1.mdedge.com/psychiatry/article/255401/depression/page/0/1

10. Aaron Carter drowned after taking Xanax, huffing... autopsy reveals. TMZ. April 18, 2023. Accessed February 15, 2025. https://www.tmz.com/2023/04/18/aaron-carter-cause-of-death-drowning-xanax-alprazolam-huffing/

11. Gonzales R. LA Coroner: Tom Petty's death was due to an accidental overdose. NPR. January 19, 2018. Accessed February 15, 2025. https://www.npr.org/sections/thetwo-way/2018/01/19/579300512/l-a-coroner-tom-petty-s-death-was-due-to-an-accidental-overdose

12. Sidner S. Report: pills in Prince’s home mislabeled, contained fentanyl. CNN. August 22, 2016. Accessed February 15, 2025. https://www.cnn.com/2016/08/22/health/prince-pills-fentanyl/index.html

13. O’Brien SA, Ramachandran S. Behind Matthew Perry’s deadly trade with L.A.’s ‘ketamine queen.’ The Wall Street Journal. September 1, 2024. Accessed February 13, 2025. https://www.wsj.com/us-news/ketamine-queen-jasveen-sangha-matthew-perry-death-0613a35e

14. US Department of Justice, US Attorney's Office, Eastern District of New York. Telehealth Company Cerebral Agrees to Pay Over $36 Million in Connection with Business Practices. Accessed February 14, 2025. https://www.justice.gov/usao-edny/pr/telehealth-company-cerebral-agrees-pay-over-36-million-connection-business-practices

15. Winkler R, Safdar K, Fuller A. Startup cerebral soared on easy Adderall prescriptions. That was its undoing. The Wall Street Journal. June 8, 2022. Accessed February 13, 2025. https://www.wsj.com/articles/cerebral-adderall-adhd-prescribe-11654705250

16. Addington v. Texas, 441 U.S. 418 (1979).

17. O'Connor v Donaldson, 422 U.S. 563 (1975).

18. Conservatorship of Smith, 187 Cal.App.3d 903, 909 (1986).

19. Maisel A. Bedlam 1946. Life Magazine. 1946.

20. Silver-Greenberg J, Thomas K. How a leading chain of psychiatric hospitals traps patients. The New York Times. September 1, 2024. Accessed February 13, 2025. https://www.nytimes.com/2024/09/01/business/acadia-psychiatric-patients-trapped.html