Considerations for Ethical Practice in Managed Care

Professional Psychology: Research and Practice 1999, Vol. 30, No. 6, 563-575

Copyright 1999 by the American Psychological Association, Inc. 0735-7028/99/S3.00

Considerations for Ethical Practice in Managed Care Catherine Acuff

Bruce E. Bennett

Center for Mental Health Services and the United States Substance Abuse and Mental Health Services Administration

American Psychological Association Insurance Trust

Patricia M. Bricklin

Mathilda B. Canter Phoenix, Arizona

Widener University

Samuel J. Knapp

Stanley Moldawsky Chatham, New Jersey

Pennsylvania Psychological Association

Randy Phelps American Psychological Association How does one maintain an ethical practice while facing the requirements and limits of a health care system that is dominated by managed care? Psychologists are increasingly raising such questions about ethical issues when working in or contracting with managed care organizations. The authors review the process involved in ethical decision making and problem solving and focus on 4 areas in which ethical dilemmas most commonly arise in a managed care context: informed consent, confidentiality, abandonment, and utilization management-utilization review. The need for sustained and organized advocacy efforts to ensure patient access to quality health care is discussed, as is the impact of managed care's competitive marketplace on professional relationships. Hypothetical examples of typical dilemmas psychologists face in the current practice environment are provided to illustrate systematic ethical decision making.

Marketplace changes, including the advent of and high level of market penetration by managed care, have caused an upheaval in the practice community. What dilemmas do practitioners face

when working in, or contracting with, organized systems of care? What should practitioners be doing to maintain both ethical standards and high-quality services in this era of managed care? What

CATHERINE ACUFF received her PhD from Duke University. After nearly 2 decades in private practice in Windsor, CT, she took a position in the U.S. Substance Abuse and Mental Health Services Administration, where she now serves as the program director of the HIV/AIDS Treatment Adherence, Health Outcomes and Cost Study for the Center for Mental Health Services. She currently serves on the American Psychological Association (APA) Board of Directors. BRUCE E. BENNETT received his PhD from the Illinois Institute of Technology and is the executive director of the APA Insurance Trust and a former member of the APA Board of Directors. He was instrumental in the drafting and passage of the "Ethical Principles for Psychologists and Code of Conduct." PATRICIA M. BRICKLIN received her PhD from Temple University and is professor of psychology at the Widener University Institute for Graduate Clinical Psychology. She is an officer of Bricklin Associates, a psychological practice, conducts classes and workshops on professional issues and ethics, and was chair of the Pennsylvania State Board of Psychology for many years. MATHILDA B. CANTER received her PhD from Arizona State University and she maintains an independent practice in Phoenix, AZ. A former member of the APA Board of Directors and a past chair of the Arizona Psychology Board and of the APA Ethics Committee, she was instrumental in the drafting and passage of the APA Ethics Code. SAMUEL J. KNAPP received his EdD from Lehigh University and is the

professional affairs officer of the Pennsylvania Psychological Association. He writes frequently in the area of professional ethics. STANLEY MOLDAWSKY received his PhD from the University of Iowa. He maintains an independent practice in Chatham, NJ. He is a past president of Division 42 (Independent Practice, 1997) and cochair of Interdivisional Task Force on Managed Care of APA Divisions 29, 39, and 42. RANDY PHELPS received his PhD from the University of Utah. He is the administrative director for professional practice at the APA Practice Directorate. THE OPINIONS EXPRESSED IN THIS ARTICLE are the authors' own and do not represent an official statement by the APA Ethics Committee or the APA Office of Ethics. Statements made neither add to nor reduce requirements of the APA Ethics Code, nor can they be definitively relied on as interpretations of the meaning of the Ethics Code standards or their application to particular situations. The opinions expressed by Catherine Acuff are solely hers. No official support or endorsement by the Substance Abuse and Mental Health Services Administration is intended or should be inferred. WE GRATEFULLY ACKNOWLEDGE the assistance of the following persons in the preparation of this material: Shirley A. Higuchi, Elizabeth A. Cullen, Cherie Jones, Billie Hinnefeld, and Anthony E. Chuukwu. CORRESPONDENCE CONCERNING THIS ARTICLE should be addressed to Catherine Acuff, 1429 Templeton Place, Rockville, Maryland 20852. Electronic mail may be sent to [email protected].

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concerns are there regarding the ethics of such systems themselves? In this article we explore these issues. The business emphasis in the current health care marketplace on "units of work" (therapy hours) and "commodity prices" (fees) by the "provider" (psychologist) represents a language and set of values that are alien to many practitioners. Many psychologists experience considerable discomfort over their professional roles and organizational expectations when business standards and incentives conflict with professional values and ethics. Reactions among psychologists to these marketplace changes have been mixed, but are frequently intense. Some psychologists have welcomed the emphasis on financial accountability and the opportunities for personal advancement. Many psychologists have continued to try to work ethically and competently within organized systems of care, including managed care organizations (MCOs). However, some have rejected managed care entirely and eschewed all things related to it. Still others have seized entrepreneurial opportunities and have become managers for, leaders in, or owners of MCOs. In addition, many psychologists have expressed deep concern about the future of professional psychology. Regardless of the individual's current level of involvement or concern, psychologists feel distress whenever patient care is compromised and should be concerned about the impact of business practices on the quality and accessibility of psychological services. This concern predates managed care but is more manifest for many psychologists working with or for MCOs. Because many of the ethical dilemmas psychologists face as a result of managed care are systemic in nature, there is a limit on the ability of any single psychologist to affect the current health care marketplace. Therefore, advocacy efforts, both by individual psychologists and the profession as a whole, are needed. This article arose from our collective experience on a task force on "Ethical Practice in Organized Systems of Care," which was convened by the American Psychological Association (APA) Committee for the Advancement of Professional Practice (CAPP). CAPP is acutely aware of the dramatic changes in the way health care is delivered today and the increasing complexity faced by practitioners regarding ethical and legal practice in this context. The task force reviewed issues of ethical service delivery in organized care settings and submitted an internal report to CAPP in June, 1998. Our focus was on the process involved in ethical decision making and problem solving in the current era of managed care. Our review of the issues suggested that overall, the APA Ethics Code (APA, 1992) and other APA documents generally provide adequate guidance for individual psychologists when managed care presents ethical challenges. Indeed, most, if not all, of the issues created by managed care policies (such as limited treatment reimbursement and threats to confidentiality) have been faced before by psychologists in other settings and contexts. However, managed care seems to have greatly increased the frequency with which psychologists encounter these issues, as well as their intensity. In the current article, we review general considerations in ethical decision making and problem solving. In addition, we discuss the need for sustained and organized advocacy efforts to ensure patient access to quality health care, the impact of managed care systems on professional relationships, both among psychologists and between psychologists and other professionals, and the need for a systematic approach to ethical decision making. We also examine

four areas, or domains, in which ethical dilemmas most commonly arise for psychologists working in or with organized systems of care: informed consent, confidentiality, abandonment, and utilization management-utilization review. Hypothetical examples are provided to illustrate many of the issues and dilemmas encountered in the managed care environment.

General Considerations Many practitioners are experiencing dilemmas or are raising questions about their ethical obligations because some MCOs deny authorization for needed treatment, fail to respect patient privacy, restrict communications between psychologists and their patients, or are perceived as attempting to intimidate psychologists through the use of "no cause termination" clauses. Although these practices are not engaged in by every MCO, they are clearly problematic when they occur. In addition, psychologists who are increasingly entering into capitated contrasts or working on a case-rate basis face the problem of delivering quality health care services within a very limited budget. And, one impact of marketplace changes in general, and of managed care in particular, has been to curtail drastically the availability of psychological assessment and longterm therapy, two of psychology's most significant modalities.1 Finally, the competitiveness embodied in the managed care marketplace has changed the tenor of professional relationships within the health care industry. Psychologists face competing demands as they try to meet their ethical obligations while providing services in a changing environment. The following vignette illustrates a dilemma regarding the competing demands of capitation and one way in which a hypothetical group of psychologists may deal with these demands.

Vignette 1 Situation The Acme Psychological Center, a private corporation owned by 10 psychologists, has just been awarded a large capitated contract, which starts in 1 month. When the new plan takes effect, 30% of the Center's patient caseload will be either entirely selfpay or under fee-for-service insurance, 30% will be under other managed care plans, and 40% will be under the new capitated plan.

Issue The owners, being ethical psychologists, are concerned that they do not put profits above patient welfare in the capitated contract. They have assigned one of the practice partners, Dr. Anne Ethical, to propose internal procedures to ensure that patient welfare will not be compromised. 1 Many studies, including the Consumer Reports research ("Mental Health: Does Therapy Help?" 1995; Seligman, 1995) have documented the benefits of long-term therapy. This is but one of many areas where managed care practices have limited patient access to quality psychological services. Another is psychological assessment. The Psychological Assessment Work Group of APA's Board of Professional Affairs has provided an extensive discussion of the problems related to assessment in contemporary delivery systems (APA Board of Professional Affairs, 1998a, 1998b).

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Discussion and Response Dr. Ethical wants to ensure that the recommendations will reduce the temptation to compromise patient care. In the proposal she sent to the other group members, Dr. Ethical recommended that (a) all patients will be given access to an internal utilization review process if they are dissatisfied with the treatment plan or services offered to them. The utilization review process includes input from a respected outside psychologist who has no financial ties to the group practice; (b) the informed consent brochure given to incoming patients informs them of the potential for conflict of interest and of the internal utilization review process; (c) the practice will develop an internal monitoring system that looks at the length of patient care in the nonmanaged care and managed care (capitated) reimbursement systems. The owners will monitor their behavior to ensure that the capitated patients are not subjected to a systematic downgrading of their treatment; (d) outcome measures and satisfaction forms will be used for both the capitated and noncapitated patient populations; and (e) the owners will agree that the sharing of profits depends, in part, on the results of the outcomes and patient satisfaction data.

A Critical Distinction The terms ethics and ethical can have various connotations depending on the context in which they are used. For example, the term ethical may refer to overarching moral principles, such as autonomy, beneficence (doing good for others), nonmaleficence (doing no harm), fidelity, and justice. In a more narrow sense, the term ethical may refer to the "APA Ethical Principles of Psychologists and Code of Conduct" (APA, 1992) or to codes of ethics adopted by state boards of psychology. These codes of conduct mandate or prohibit specific actions and they may have the force of law. MCOs' actions often seem to offend the "ethics" of many practitioners and the public in the first sense of the term; that is, they are seen as morally outrageous. In this article we evaluate psychologists' ethical questions in the second sense of the word; that is, in the context of managed care in accordance with the APA Ethics Code. No code of ethics, however well written, can anticipate all of the various situations in which psychologists may confront ethical dilemmas, and no code of ethics may be able to specify concrete actions for the psychologist to follow in all situations. Consequently, some of the possible ethical conflicts faced by psychologists have no clear solution and require psychologists to engage in an ethical decision process involving the balancing of competing ethical standards. The challenges presented by MCOs make it more important than ever for psychologists to familiarize themselves with the APA Ethics Code and relevant state laws. Several studies reveal that a majority of practitioners believe managed care has created ethical dilemmas for most psychologists (Murphy, DeBernardo, & Shoemaker, 1998; Phelps, Eisman, & Kohout, 1998; Rothbaum, Bernstein, Haller, Phelps, & Kohout, 1998). Despite these beliefs, our task force found, on the basis of our own survey of state licensing boards and state association ethics committees, that there have been few adjudicated cases dealing specifically with alleged violations arising from psychological practice related to managed care. This suggests that psychologists who participate in managed care arrangements may use

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the term ethics to refer to their personal moral outrage toward the rules and limitations imposed by the managed care system, rather than to actual violations of the APA Ethics Code. In other words, an MCO's requirements may create limitations for the client and difficult situations for the psychologist, but these problems may not always rise to the level of an actual violation of the APA Ethics Code. Nonetheless, although an actual violation of the code may not be involved, current health care practices that limit access to quality health care are of concern to psychologists. In addition to individual efforts by psychologists to grapple with practice dilemmas in this era of managed care, the profession as a whole is engaged in a variety of efforts to support ethical practice. Active involvement by all psychologists in the APA, its divisions, and the state psychological associations will further these efforts. The following example addresses some of the issues and frustrations psychologists may experience in attempting to provide treatment in the context of managed care requirements and procedures.

Vignette 2 Situation Dr. F. Russ Stration is working with a patient who consulted him following an initial panic attack. At the first session, as part of his normal consent procedure, Dr. Stration reviewed with the patient her MCO benefit. He informed her that this particular MCO requires treatment reports every third session, which might include disclosure of his session notes and treatment summaries. He developed a treatment plan that he reviewed with the patient before submitting it to the MCO. Several days before the second session, Dr. Stration called the MCO about the status of his request for approval of the treatment plan. The MCO case manager explained that the normal response time for nonemergent care approval was 2 weeks but that he would try to have an answer for Dr. Stration as soon as possible. By the time of the second session, Dr. Stration still had not heard from the MCO and found himself unable to tell the patient whether their third session would be the last under her benefit or whether additional sessions would be allowed. As of the third session, the patient appeared to be benefiting from the treatment interventions; she reported no further panic attacks and said she felt an increased sense of well-being. Dr. Stration told her he would call her when he heard from the MCO, scheduled a tentative fourth session contingent on plan approval, and discussed with her the availability of a local support group should further treatment be denied.

Issue Dr. Stration was angry over this situation and feared that the uncertainty of further treatment would be detrimental to therapy. Although he felt that he had done all he could for this patient, he believed that the MCO case manager was acting unethically and he was outraged.

Discussion Dr. Stration's feelings of distress over this situation may be familiar to many psychologists. Despite these feelings, Dr. Stration

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has dealt effectively with the ethical issues that could have arisen. By conducting an extensive discussion with the patient at the outset of therapy, Dr. Stration has met his obligation in structuring the relationship (Standard 4.01), providing informed consent to treatment (Standard 4.02), explaining the limits of confidentiality (Standard 5.01), and disclosing information appropriately (Standard 5.05). He has also planned for facilitating care in the event that psychological services are interrupted (Standard 4.08), and offered an appropriate alternative (Standard 4.09) should treatment terminate because of the MCO's refusal to authorize continued

Response Dr. Stration should review his contract with the MCO regarding response time for treatment requests. If the MCO has violated the contract, he could protest the lack of timely response, as well as support the patient in protesting to her employer's benefits manager. Otherwise, his response to the MCO's procedures may best be categorized as moral outrage, and one course of action may be to engage in advocacy efforts to make known his feelings to legislators and others who can affect managed care policies and procedures.

Systemic Advocacy Psychology is both a science and a profession, with a long heritage of working to improve public welfare by providing quality health care services. The ethical aspirations of professional psychologists include an obligation to work in sustained and meaningful activities that ensure public access to quality health care services. Psychologists seek to develop organizational policies and laws that increase access to needed services. This means working to address organizational policies or laws that restrict such access, interfere with or limit informed consent, result in patient abandonment or other inappropriate treatment of patients, or compromise patient confidentiality. Such activities constitute an awareness that some dilemmas cannot be solved by actions at the level at which they occur. For example, an individual psychologist who has experienced a retaliatory termination from a panel may be unable to successfully challenge or change this action on the part of the MCO. However, such retaliatory terminations may be legally actionable. A few successful legal and legislative challenges along those lines may provide more opportunity for psychologists to successfully advocate for them at the MCO level. For example, the APA Practice Directorate is currently supporting several lawsuits that have the potential to change the way some MCOs operate. Changes occurring as a result of successful resolution of these suits will assist the individual psychologist in advocating for his or her patients. Thus, the psychologist is urged to use a problem-solving approach, either singly or in concert with organized psychology. Although the obligation to engage in advocacy does not represent an enforceable standard, it does represent a goal to which all psychologists should aspire. Professional advocacy is not restricted to the psychologist's individual concerns but also may extend to systemic policies that negatively impact quality care. Furthermore, advocacy efforts should focus on the needs of the public. Advocacy can be accomplished individually or collectively through

organizations such as APA and its divisions, the Association for the Advancement of Psychology, state or provincial psychological associations, and through multidisciplinary and consumer groups. Psychologists can also participate in disseminating information to the public (such as through APA's Public Education Campaign) about the benefits of psychological services. Psychologists can actively support governmental advocacy efforts to ensure basic patient protections in all managed care policies. This can be done through direct lobbying at the state or national level, and by supporting the state and national political action committees that advocate on behalf of psychologists. Psychologists can also consider running for office themselves. They can support consumer advocacy efforts that are consistent with the ethics and aspirations of the profession. Additionally, psychologists can advocate directly with the purchasers of insurance or MCOs to improve access to quality care and can develop alternative models of service delivery. Finally, and to the extent allowed by their individual MCO contract, psychologist providers can disseminate information regarding the MCOs' policies, particularly those that compromise patient care. Vignettes 3 and 4 provide examples of such advocacy activities at various levels.

Vignette 3 Situation Dr. R. E. Search evaluates a 10-year old hyperactive boy with behavioral problems in school. He also interviews the parents. Dr. Search then recommends therapy for the child, a referral for evaluation of specific medication as an adjunct to treatment, and adjunctive therapy for the parents. The parents agree to the plan. During utilization review, the MCO's reviewer states that medication should be prescribed for the boy and that psychotherapy will not be authorized.

Issue Dr. Search is faced with a denial of the treatment plan that, in his professional judgment, is in the best interest of the patient.

Discussion Dr. Search has an ethical obligation to his patient within the context of the professional relationship that has been established. The highest aspirational goals of the profession call him to act according to the patient's welfare (Principle E). To the extent that he believes the MCO's recommended treatment will harm the patient, Standard 1.14 is applicable.

Response Dr. Search's response may include any of the following: (a) submitting a written appeal to the MCO, (b) presenting literature to the reviewer indicating that medication without psychotherapy is not as effective as combined therapy, (c) explaining to the parents that he does not agree with the reviewer's recommendation and that the parents may wish to appeal the decision as well, and (d) engaging in advocacy efforts such as writing a letter to the editor of a newspaper, calling the MCO to task for just trying to save costs and not attending to the quality care needed for the patient.

ETHICS IN MANAGED CARE If the MCO's utilization reviewer is a psychologist, he or she should review the relevant data and information regarding appropriate treatment for the described disorder. The issue is whether the recommendation to prescribe medication only would be considered to be below the prevailing "standard of care." If so, then the reviewer is behaving unethically by recommending a treatment plan that is below the standard and not supported by the professional literature or community.

Vignette 4 Situation Dr. Thoughtful is the only Spanish-speaking member of a managed care provider panel. She has been working for several months with Mr. Newcomer to deal with depression related to a recent move from El Salvador. Additional issues include his new job, extended family conflict associated with the move, and stresses of acculturation. Mr. Newcomer's sister, who works for the same company and is covered under the same managed care plan, contacts Dr. Thoughtful seeking therapy as well. Like her brother, she needs a Spanish-speaking therapist who is familiar with cultural and acculturation issues in El Salvadoran families.

Issue On the basis of her work with Mr. Newcomer, Dr. Thoughtful is aware that conflicts between his and his sister's immediate families contribute to Mr. Newcomer's depression. Dr. Thoughtful concludes that it would be clinically contraindicated at this time to accept the sister as a client. However, she is also aware that the managed care plan has no other bilingual providers on their panel, although there are other culturally competent providers in the area. Nor do they provide for competent translation services. Additionally, the telephone call from the sister has convinced her that the situation is acute and calls for immediate assistance.

Discussion Dr. Thoughtful is very attuned to issues of cultural competence in providing psychological services to ethnically diverse populations. She understands the potential new client's need for psychotherapy services to be provided in her own language and recognizes as well that ethnicity and culture are significant parameters in understanding psychological processes (Principle D of the APA's "Guidelines for Providers of Psychological Services to Ethnic, Linguistic, and Culturally Diverse Populations," 1990). She is also concerned that the acuteness of the situation will not permit sufficient time to complete Mr. Newcomer's treatment before accepting the sister as a client. However, she is not prepared to risk premature termination and abandonment of her current client (Standard 4.09). On the other hand, Dr. Thoughtful is concerned about the welfare of her client's sibling, and given the seriousness of the situation, she wants to assist the sister in obtaining treatment as soon as possible (Principle E).

Response Dr. Thoughtful could appeal to the clinical director of the MCO on behalf of the potential client to authorize a referral to a cultur-

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ally competent, bilingual colleague who is not on the existing provider panel. This will often resolve the issue; but, if not, she could press the MCO to provide a competent mental health translator for therapy work with a non-Spanish-speaking member of the panel, although one who is fluent in dealing with mental health and acculturation issues in El Salvadoran families. Translators add a different dimension to therapy and should only be utilized if the first option does not work out.

Business Relationships One of the more problematic impacts of marketplace changes has been in the area of psychologists' professional relationships. Although there is no longer a specific standard in the APA Ethics Code such as the one in the 1963 code entitled "Interprofessional Relations," the sentiment it expressed is still valued by psychologists. It read, "a psychologist acts with integrity in regard to colleagues in psychology and in other professions" (APA, 1963). Because of the increased emphasis on the business of health care delivery, the proliferation of corporate groups that compete for beneficiaries and for health care contracts, and the effects of closed or closing panels on psychologists who have historically practiced in the same communities, there is concern that, as psychologists, we may lose our heritage of collegiality. For some, managed care has brought about a competitive mindset that was not previously present, and psychologists may find themselves divided from those with whom they have had long, productive relationships. For example, proprietary information about one's practice group or current activities in contract negotiations will separate us out of business necessity. These situations are foreign to many psychologists even though they are a reality of the marketplace. We must learn that business competitors do not necessarily need to have noncollegial relationships. We urge psychologists to seek out venues where common bonds can continue to be forged. Active membership in state and regional psychological associations, involvement in advocacy coalitions, and participation in professional activities with other psychologists are recommended.

An Ethical Decision-Making Process The drastic change in the context of psychological practice over the past decade has made it necessary for psychologists to renew their familiarity with the APA Ethics Code and to use a deliberative process in applying it to current dilemmas. However, ethical dilemmas all too often lack clear-cut right or wrong answers. In fact, different solutions, all of them appropriate to the individual circumstances, may well be arrived at by different people at different times. Moreover, there are times when, after a search for answers in the Ethics Code, professional guidelines, and related documents, and through consultation with colleagues, no clear resolution to a dilemma is apparent. This is one reason for developing decisionmaking processes for ethical problem solving. The literature on ethics in psychology contains many examples of such processes. Haas and Malouf (1995) and Kitchener (1984) are among those who have written in some detail on the importance of such decision making in the resolution of ethical dilemmas or even when

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deciding whether a dilemma is an ethical one. They have provided valuable models for psychologists facing such dilemmas. It is beyond the scope of this article to review in detail the models presented elsewhere. However, such a decision-making process often includes an examination of the psychologist's personal ethics relative to the issue and an examination of the psychologist's initial intuitive responses. The resulting subjective affective awareness is usually followed by a series of questions, the answers to which permit the rational examination of relevant ethical issues, the stakeholders, applicable ethical and legal codes, and the generation of possible courses of action. Because decision making is so important, below are a series of questions that a psychologist facing a managed care dilemma of ethical dimensions might ask himself or herself and their answers, which may help the psychologist to decide on a possible course of action. 1. What are my personal ethics on similar issues? 2. What is my gut-level opinion on a possible course of action? Awareness of personal ethics and understanding of gut-level or intuitive responses to any given situation are necessary before the psychologist can proceed to examine rationally the next seven questions. 3. Is this truly an ethical dilemma, or is it a business, technical, or other problem? 4. Is this a dilemma that I cannot resolve? Does it require systems change and/or organizational advocacy, or legal or legislative action? The answer to these questions may direct the psychologist to the importance of consultation and group advocacy in resolving many dilemmas of managed care. This question is particularly important in managed care settings. If the psychologist's answer to this question is yes, then the recognition that this is not a dilemma the psychologist alone can solve is helpful and frees the psychologist to consult or participate in advocacy or other actions more likely to lead to resolution of the dilemmas. 5. If it is an ethical dilemma, who are the persons who have a legitimate stake in the resolution of the dilemma? 6. What are the relevant ethical standards or principles? 7. Is a psychological or legal consultation needed? 8. Are there compelling reasons to deviate from the ethical standard? 9. What are the overarching ethical principles involved (e.g., patient autonomy, doing good for others, doing no harm, justice or fidelity)? See Haas and Malouf (1995) and Kitchener (1984) for more elaborate discussions of similar decision-making processes. It is at this point that prioritization of those major principles is critical: the patient's rights to make autonomous decisions versus a psychologist's belief about what is good for the patient versus issues of trust, confidentiality, and truthfulness versus the overriding "above all, do no harm." Depending on the answers to these questions, the final steps involve generating possible courses of action, evaluating, and choosing among them. At this point the psychologist asks two questions: Is this plan of action ethical and Is it implementable? Above all, psychologists must recognize which dilemmas are beyond the power of an individual acting alone. The reader may wish to apply the above series of decisionmaking questions to each of the vignettes in order to illustrate for himself or herself how well a systematic decision-making process

may work and to determine its helpfulness in arriving at courses of action.

Domains We have identified four domains in which ethical dilemmas most commonly arise for psychologists working in or with organized systems of care: (1) informed consent, (2) confidentiality, (3) abandonment, and (4) utilization management.

Informed Consent Managed care organizations contract or subcontract with employer groups to provide or manage health care benefit programs and with health care providers to deliver services to the subscriber group. For mental health care, these contracts generally contain provisions that limit the type of therapy and related psychological services available to patients. They may also restrict access to certain providers or provider groups. Patients generally do not appreciate the extent of these limitations until the need for services arises. It is only at that critical moment that potentially crucial inadequacies in the mental health care plan become apparent. In addition, the cost containment incentives embodied in managed care arrangements may require precertification of specific treatments, as well as initial and ongoing authorizations for therapy. The manner in which these utilization procedures are implemented by some MCOs may be overly intrusive and thereby disrupt the therapeutic process. The MCO may limit the primary therapist's ability to refer to specialists, require release of confidential patient information in excess of that needed to process claims, authorize reimbursement for fewer sessions than the number stated in the health care plan, or impose other conditions that a patient would not generally anticipate. The patient's confidence and trust in the psychologist constitute an essential component of successful psychotherapy. In this context, it is not surprising that confusion on the part of the patient may easily lead to dissatisfaction and anger. Misunderstandings and miscommunications between the psychologist and the patient may interfere with the course of therapy and may lead the patient to develop ill feeling toward the psychologist. Regardless of the type of health care service provided—or the setting in which the service is delivered—informed consent is an essential aspect of modern-day practice. Informed consent is such a fundamental part of health care that it is now required by APA Ethics Code (Standard 4.02). Because some MCOs do not provide full, complete, and accurate information to their subscribers, many patients are not fully aware of the complexities of managed care arrangements and how these arrangements affect their benefits and rights. Psychologists must be especially attentive to informed consent issues when working with these patients. However, individual psychologists cannot be held accountable for the array of managed care arrangements in the current marketplace. Psychologists may need to turn to APA or their state organizations for advocacy to ensure that benefits provided by an MCO are those that are publicly declared in the patient's contracts. On the basis of the experiences of the authors and the feedback given from other psychologists, three areas of particular importance (fees and other types of financial arrangements, role clarifi-

ETHICS IN MANAGED CARE cation, and confidentiality) will be discussed in the context of infonned consent. Informed consent, fees, and financial arrangements. To avoid confusion or misunderstanding, it is important that the psychologist reach an agreement with the patient specifying the compensation and the billing arrangements to be used (Standard 1.25[a]). The agreement should address the psychologist's billing practices for ancillary services, such as testing, report writing, professional consultation, voluntary or required court appearances, and other related procedures that may be provided by the psychologist. The psychologist is also required by the Ethics Code to discuss any limitation on services that may be anticipated due to limitations in financing (Standard 1.25[e]). Such limitations may result from contractual obligations in the patient's managed care program. It is helpful for psychologists to understand and be able to convey to their patients such information as: (1) the MCO's provisions related to the number of authorized sessions, (2) the method and timing of utilization review, (3) the nature of the information required by the MCO to authorize services, (4) the amount of reimbursement provided, (5) the patient's share of any expenses (deductible or copayment), (6) the services that are covered or excluded, (7) the responsibility for payment if the MCO determines that a particular service is not covered under the patient's plan, and (8) any other foreseeable financial matters. Informed consent and role clarification. Frequently, psychologists find themselves in conflicting roles when providing professional services, especially in a managed care setting. For example, psychologists who provide services under a capitated arrangement may feel increased pressure to limit treatment in order to sustain profits. When such conflicts occur or are foreseeable, the psychologist should attempt to clarify the situation with the parties involved and delineate the role(s) that the psychologist can and cannot perform. These role clarification issues take on greater significance when providing couples, marital, or family therapy because of the increased complexity when multiple parties are involved (Standards 1.21, 4.03, and 7.03). Informed consent and confidentiality. Confidentiality is an essential ingredient in the therapeutic relationship. It is important that the patient be fully informed about professional and legal obligations that may require the psychologist to release sensitive patient information to the MCO as a part of utilization review or for determination of necessity of treatment (Standard 5.05). If it is foreseeable that the information obtained in the course of delivering services may be used for these or other purposes, the patient should be made aware of this fact. The discussion of confidentiality should occur at the initial stages of treatment and thereafter as new issues arise in therapy. Special confidentiality provisions are involved when the psychologist is providing couples, marital, family, or group therapy (Standard 5.01).

Informed Consent Recommendations The following are specific recommendations regarding informed consent. Standards of the APA Ethics Code are referenced where appropriate. 1. Psychologists should be aware that informed consent is an ethical requirement (Standard 4.02). 2. Psychologists should provide informed consent, which, at a minimum, includes (a) information regarding fees and other po-

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tential costs of services (Standard 1.25); (b) responsibility for payment (Standard 1.25); (c) type of service and anticipated number of sessions (Standards 1.07 and 4.01); (d) any contractual limitations on the services provided (Standard 1.25[e]); (e) record keeping, including electronic storage and transfer, release of information, and confidentiality (Standards 1.24 and 5.01); and (f) the roles that the psychologist can and cannot play (Standards 1.17, 1.21, and 4.03). 3. When working with a patient who is part of a managed care arrangement, the psychologist should review with the patient any information that will be provided to the MCO for purposes of utilization review or quality assurance (Standard 5.05). 4. Because informed consent is an ongoing process, issues should be addressed at the onset of services and thereafter, as appropriate. For example, the patient should be informed if his or her MCO requires reauthorization information. 5. Psychologists may want to consider using a written document for establishing informed consent. An example is the "Psychotherapist-Patient Informed Consent Contract" (Harris & Bennett, 1998). Psychologists are advised to consult with an attorney prior to using such a document to ensure that it is in compliance with local and state statutes.

Confidentiality Confidentiality and trust are critical to most effective health care treatments and particularly to mental health care. Confidentiality is the ethical and legal duty imposed on therapists to protect sensitive information obtained in the delivery of professional services from disclosure to third parties. Without assurance of confidentiality many individuals will not seek treatment, and those in treatment may withhold crucial information. The atmosphere of safety provided by confidentiality is critical to effective treatment. Exceptions to confidentiality have always existed. For decades, even under indemnity arrangements, insurance companies have required the psychologist to provide the patient's diagnosis and, at times, the treatment plan prior to paying for the service. The legal system similarly places limits on confidentiality to serve the interests of justice and the public welfare. For example, mandatory child-abuse-reporting statutes are found in all states. Nevertheless, the strong demand for patient information inherent in managed care systems far exceeds these previous provisions and threatens the confidentiality of the psychologist-patient relationship, potentially reducing the quality of patient care. MCOs, for example, may require patients to reveal sensitive and affect-laden information to case managers or intake workers before authorizing initial or additional treatment, or when transferring a patient from one provider to another. It is not unheard of for an MCO to require a practitioner to submit all treatment records before payment is made. More often, MCOs use standard forms that may solicit more information than is typically required for the development of an effective treatment plan. Some MCO policies require certain information from all patients on the premise that they need access to this information to monitor patient care. This requirement may lead psychologists reluctantly to place more information in the records than may be necessary. It is assumed that the patient has consented to release this type of information because insureds will typically have signed release forms when first enrolled in the managed care plan (except in the

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case where the MCO requires the provider to obtain the release). However, the insured rarely understands the extent to which the release permits private information to be shared, so it is incumbent on the psychologist to inform the patient in this regard. Unless the release is revoked by the patient, it will probably be effective, so the psychologist may release the information if required by law. Psychologists should be aware of the applicable confidentiality laws specific to their state. MCOs sometimes demand inspection of a psychologists' records of nonbeneficiaries before they will credential the psychologist as a member of the MCO panel. Although psychologists risk exclusion from panels for failure to comply with this standard, there are no exceptions to confidentiality that allow client information to be revealed without written consent under these circumstances. In this situation, redacted records should be acceptable to the MCO. If not, the psychologist may want to pursue other alternatives with the MCO, such as challenging the request on ethical grounds, offering to provide a fictitious sample record, or offering to share an MCO's patient record after becoming a member of the MCO panel and receiving the referral, following patient consent. Some MCO contracts state that the MCO owns the patient's records. The psychologist is advised to review all managed care contracts related to record ownership. Again, the psychologist should be aware of applicable state confidentiality laws. With ongoing buyouts and mergers in the health care industry, no one has assurances regarding the ultimate disposition of confidential patient information. Information that a psychologist might have once been able to hold in confidence may now be open to review or entry into databases. The mental health information may be comingled with other health care information. The disclosure of mental health information may be more problematic than the disclosure of general health information because of the risk of greater stigmatization.

Confidentiality Recommendations The following are specific recommendations regarding confidentiality. Standards of the APA Ethics Code are referenced where appropriate. 1. Psychologists should inform patients as soon as feasible at the outset of treatment about the relevant limits of confidentiality under their managed care policy. Patients should be made aware that psychologists have no control over confidential information after it leaves their offices (Standards 4.01, 4.02, and 5.01). 2. It may not be clinically indicated or feasible in all situations for psychologists to share with patients all information that will be released to the MCO. However, the usual rule of thumb is that patients should know generally what is being released. There should be appropriate consent prior to the release of this information (Standards 4.02 and 5.05). 3. Because of the potential for abuses of confidential information by MCOs, psychologists need to consider what they place in clinical records. Psychologists can obtain guidance on record keeping from the APA's "Record Keeping Guidelines" (APA, 1993), regulations from their state boards of psychology, or various ethics texts and articles (Standards 5.03 and 5.07). 4. Psychologists who perform utilization reviews are held to the same ethical standards as psychologists who provide direct treat-

ment. They may not share patient information without written consent and are entitled only to as much information as is necessary to fulfill their professional duties (Standards, 1.03, 5.03, and 5.06). 5. Psychologists should be aware of and make accommodations for the threats to confidentiality inherent in newer modes of information transmission and storage such as fax and electronic mail communication, computerized databases, and so forth (Standards 5.04 and 5.07). 6. Psychologists should read managed care contracts carefully to determine their obligations related to confidential information including who, under the terms of the contract, owns the records and has control over their release. Psychologists also should be aware of the limits on confidentiality governed by applicable state laws (Standards 5.09 and 5.10). 7. Without written permission from the patient, psychologists may not allow MCOs to inspect patient records (Standard 5.05). Psychologists should be aware that the patient may have signed a waiver to permit records inspection by the MCO.

Vignette 5 Situation Dr. Show's application to become a member of an MCO panel is contingent on a site visit to her office. As part of the visit, the MCO staff member plans to review several current patient records. After Dr. Show points out that she has no patients insured by that particular MCO, the company requests that she share files from any of her current patients. When Dr. Show points out that to do so would be a violation of patient confidentiality, the MCO requests access to former patient files from an MCO that has been bought out by the current company. Dr. Show refuses to comply on the grounds that these patients did not authorize the release of their files to the current company, and she is subsequently denied membership to the MCO panel. Issue The primary issue is one of protecting confidential patient information. There are secondary issues about access due to the increasing mergers and acquisitions of some MCOs by other MCOs. Finally, a situation such as this has an impact on the psychologist's ability to practice.

Discussion Releasing nonmember patient records to the MCO without informed and written consent likely would be a violation of the ethical obligation to preserve the confidentiality of her patient's records, as well as a likely violation of applicable law. In a similar way, releasing former MCO patient records would also likely be an ethical violation, unless it is apparent that these patients had given informed and written consent to this procedure in the event of a sale of one MCO to another. This instance highlights the need for psychologists to be actively involved in advocacy efforts aimed at influencing managed care policies that cannot be fulfilled by the psychologist without violating the APA Ethics Code.

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Response Dr. Show has behaved appropriately by not allowing disclosure of records without the informed consent of her patients. She could consider appealing through the MCO's clinical director the decision to deny her membership and may be able to negotiate a review of redacted records. She may also wish to contact her state licensing board for assistance in documenting to the MCO that she is being asked to violate state law.

Abandonment Abandonment, the abrupt or unwanted discontinuation of treatment during a time of need, is a potential ethical and legal cause of action and may lead to harm of the patient. Although current marketplace trends limiting treatment may affect continuity of care, thereby increasing the potential for abandonment, it should be noted that the issue of abandonment also predates managed care. Abandonment can include the precipitous termination of a patient in crisis because of nonpayment for services. Abandonment may also arise if psychologists do not have sufficient coverage during weekends, out-of-office hours, vacations, or educational leaves. The APA Ethics Code provides guidance on these issues (Standards 4.08 and 4.09). Although the cost containment practices of MCOs are not inherently unethical, they have led to increased concerns about patient abandonment. Psychologists working in organized systems of care are often concerned that the institution or the MCO's session limit will necessitate termination with patients who need more treatment. Psychologists are also concerned that such terminations may be violations of legal and ethical standards that prohibit patient abandonment. Moreover, many MCOs have closed panels, and psychologists face dilemmas when their patients change health care coverage to a company in which the psychologist is not an impaneled provider. And, as companies consolidate or as new MCOs enter the market, psychologists must be concerned about disruption of treatment with existing patients. Unfortunately, the industralization of health care has created financial incentives to limit treatment even when, in the psychologist's opinion, treatment is clinically indicated and the patient desires more treatment. These arrangements may limit the ability of psychologists and patients to work collaboratively to complete treatment successfully within a realistic time frame. Overly restrictive limits on sessions or benefits may result in the interruption of needed services to a particular patient. These incentives to limit care may occur when (a) MCOs contract directly with psychologists as providers, (b) MCOs limit the ability of psychologists to contract independently with patients covered under the MCO contract, or (c) psychologists work under a capitated contract with an MCO.

MCOs Contract Directly With Psychologists Even when psychologists have directly contracted as providers for MCOs, they should only accept patients whom they believe they can benefit. That decision may depend on the match between the needs of the patient and the expertise of the psychologist (Standards 1.04 and 1.05), as well as the ability of the patient (or the patient's insurer) to meet the financial requirements of the

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treatment. One factor to consider is whether the benefit will allow the psychologist sufficient time to diagnose and treat the problem or otherwise benefit the patient. Such decisions may be difficult because the primary issue for which the person sought treatment may not turn out to be the primary focus of therapy. External stressors may lead to a precipitous decline in the functioning of the patient, or the true nature of the problem may not be discernible until therapy has been underway for some time. Nevertheless, to the extent feasible, the psychologist and patient need to discuss the anticipated needs of the patient and the ability of the MCO or the patient to pay for needed services. Even after a patient is accepted into therapy, an MCO may discontinue reimbursement for a variety of reasons. At these times, if in the psychologist's opinion the patient still needs treatment, the psychologist may be obligated to appeal, or to encourage a patient to appeal, those decisions (see section on Utilization ManagementUtilization Review). When patients without financial resources require additional treatment, psychologists may refer them to public agencies or self-help groups, develop a deferred or reduced payment plan, schedule sessions less frequently or of shorter duration if clinically appropriate, or use other strategies to ensure access to care. Bartering may also be a consideration, but psychologists should be familiar with Standard 1.18 of the APA Ethics Code. The exact nature of the psychologist's recommendations involves both clinical and financial considerations. Regarding coverage situations, an MCO contract may not permit the psychologist a full range of colleagues to use for coverage while the psychologist is absent. For example, coverage arrangements may be restricted to the MCO's provider panel. In that instance, arranging coverage can be particularly challenging when a psychologist's caseload consists of patients from several MCOs. Psychologists need to consider this possible issue when deciding to sign a managed care contract.

Prohibition on Private Fee Arrangements Most MCOs permit psychologists who are network providers to enter into private fee arrangements with patients for noncovered services. However, some do not. Psychologists should look for these clauses in MCO contracts and should consider them when making long-term plans for the care of patients.

Psychologists Directly Hold Capitated Contracts Some MCOs hire psychologists and other mental health professionals on a fee-for-service basis. Other MCOs may "carve out" behavioral health care services through capitated arrangements with subcontractors, including group practices in which psychologists have a personal financial risk that may depend, in part, on the type and length of treatment provided patients. The very nature of these arrangements places the psychologist in a potential conflict of interest with his or her patients because the psychologist's business interests may be advanced to the detriment of the patient through the withholding of care. Psychologists should inform patients when they are involved in any financial arrangements that might serve as an incentive to potentially limit care (see earlier section on Informed Consent).

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Abandonment Recommendations The following are specific recommendations regarding abandonment. Standards of the APA Ethics Code are referenced where appropriate. 1. Patients should not be abandoned during periods of crisis (Standards 4.08 and 4.09). 2. Psychologists are aware that emergency, weekend, or afterhours coverage may be required for some patients (Standards 1.07, 4.01, 4.02, 4.08, and 4.09), and they should make necessary arrangements for this coverage. Particularly for managed care patients, it may be necessary to consider other impaneled providers when making coverage arrangements. 3. When patients without financial resources need more treatment, psychologists should attempt to help them find alternative ways to receive the needed treatment (Standards 1.18, 1.20, and 4.09). 4. Psychologists should read MCO contracts carefully to understand any limits on coverage. They should also be aware of the appeal mechanism(s) in the contract and pay attention to any other clauses that could limit patient care (Standards 1.02, 4.01, 4.02, and 8.030). 5. Psychologists should inform patients if the contract includes financial incentives to limit care. Although capitation arrangements are not inherently unethical, psychologists with financial incentives to deny care are advised to develop quality control mechanisms that minimize the likelihood that patient welfare would be compromised (Standards 1.13, 1.14, and 1.15). (See Vignette 1 for examples.)

Vignette 6 Situation Dr. Greatheart and her patient are close to reaching their therapy goals when the patient is diagnosed as having breast cancer and becomes emotionally distraught. The therapist requests authorization for additional sessions, but the MCO denies the request because the patient's benefits have been exhausted. The patient suggests that Dr. Greatheart continue to see her by naming her husband as the patient, because he had not used his benefits at all.

Issue Dr. Greatheart knows that continued psychological treatment could make a significant difference for the patient during this difficult time and is aware that the APA Ethics Code makes it clear that psychologists may not abandon patients in crisis (Standard 4.09). The issue for Dr. Greatheart is how to meet her ethical and professional responsibilities to her patient given the MCO's denial.

Discussion Initially, Dr. Greatheart is frustrated with the MCO, but she realizes that the denial of additional sessions is based on her patient reaching the contractual benefit limit. This is a different situation than one where an MCO denies sessions for other reasons (e.g., additional treatment does not meet their definition of medical necessity) and is an issue that psychologists have faced many times

in the past (e.g., with uninsured patients or when patients with indemnity insurance reached the benefit limit). Therefore, the situation is not limited to managed care arrangements. Even though the benefit is exhausted, it is possible that an appeal may be successful, and Dr. Greatheart may wish to consider this option. MCO's often have a multistage appeals process, ranging from the utilization reviewer to a clinical peer or equivalent and finally to the clinical director. If the MCO contract permits, Dr. Greatheart could also consider seeing the patient on a private basis at her usual and customary fee, a reduced fee, or on a pro bono basis. She may also consider making a referral to an appropriate community resource for therapy. Additionally, she may refer the patient to the local American Cancer Society chapter for assistance and available peer support groups. In the absence of community resources, she may involve herself in advocacy efforts within her state or local psychological association or other community groups (e.g., United Way, city council, and other arenas) for funding for the development of appropriate community resources.

Response In this situation, Dr. Greatheart should make arrangements to see that the patient's needs for continuity of care are considered to the extent feasible. Psychologists should not falsify information in the interests of providing patient care. This patient's suggestion that the psychologist continue to see her, but name her husband as the patient, is not acceptable. For Dr. Greatheart to collude in this fashion could be considered fraud.

Utilization Management-Utilization Review Utilization management (UM), in the broadest sense and under different names, is not new to psychology. Psychologists have been making UM decisions ethically and professionally for decades. UM involves making decisions regarding types of treatment, setting, and treatment duration in the delivery of professional services, and has occurred in both the public and the private sectors. UM also involves other such clinical functions as supervision, consultation, case staffing, peer review, and case studies. Utilization review (UR), one form of UM, is in and of itself neither ethical nor unethical. In the past, the primary focus of utilization management was to serve the best interests of the patient or client. For years, public mental health agencies have engaged in heroic efforts to provide quality services to patients with limited budgets and serious financial restrictions. Today, there is a legitimate need to control health care costs, and some MCOs are interested in the quality of care provided while being responsive to this need. However, the high profits awarded CEOs of some MCOs and the emphasis on earnings within the for-profit MCOs suggest that the normal outrage of many psychologists who decry UR does have some rational basis. Also, some psychologists working as utilization reviewers within managed care systems may face a built-in conflict-of-interest as pressures for cost containment and profit motives compete with, and may well override, quality of care priorities in their decision making. The applicability of the APA Ethics Code to UM-UR functions depends on the financial incentives involved and the issues to be considered in the decision-making process. When psychologist-

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reviewers exercise professional judgment in performing UR services they may be performing a health care procedure as opposed to a benefits management procedure.2 Thus, the type of service performed (e.g., health care vs. benefits decisions) will determine the ethical obligations of the psychologist. When professional judgment is required, and the psychologist is free to exercise discretion determining the number of sessions allowed—as opposed to purely routine administrative functions such as determining the number of sessions remaining in the plan benefit—ethical obligations to the patient ensue. Psychologist-reviewers and providers are in the most precarious situation when the UR procedures provide financial incentives to deny treatment (e.g., in capitated arrangements or when the reviewer is employed by an MCO where the primary goal of the UR may be cost saving, rather than quality service provision). If the employer's benefit package limits the benefit to a specific number of sessions, the psychologist-provider should offer the best service possible, given the limits of the benefit. On the other hand, if the design of the benefit is unlimited, or the limit of benefits has not yet been reached when UR is instituted, the psychologist-reviewer is exercising professional judgment in authorizing or denying treatment. Whereas containing costs may be one of the MCO's objectives, it is only one of many criteria that should guide the reviewer's decision to deny or continue care. Patient needs should remain paramount, though they should be met in a cost-effective manner. Recommendations for Psychologists Performing Utilization Management and Review As noted earlier, UR may involve a primarily administrative function, such as determining if a particular service is covered by the MCO contract. However, UR often requires psychologists to exercise professional judgment to determine if the treatment is "medically necessary," or to determine the type of service or number of sessions needed to help the patient. Such clinical decision making in UR is a professional service and is subject to ethical standards and requirements for ethical practice. Relevant sections of the Ethics Code include all under Standard 1.0, particularly 1.14, Avoiding Harm. 1. Psychologists are advised to be cautious about entering into employment with MCOs that appear to base UR decisions primarily or solely on cost containment or profit motives, rather than on quality of care. 2. Prior to accepting employment with an MCO, psychologists are advised to read carefully both their contracts and the MCO's UR-UM policies. They are also cautioned to review renewal contracts and policy changes (Standards 1.02 and 8.03). 3. When psychologists who are functioning as utilization reviewers respond to requests for additional care of patients, they should be flexible in applying criteria for continuing care. Their decisions should be based on patient needs within the framework of the benefits stipulated in the contract (Standards 1.14, 1.15, and 1.25[b]). 4. When performing UR that requires professional judgment and allows discretion, psychologists may be providing professional services. They should perform these services within the boundaries of their competence. Because the reviewer is called on to make clinical judgments without having direct contact with the patient,

it is particularly important to attend to the basis on which "medical necessity" is determined in reaching these decisions (Standards 1.04, 1.05, 1.06, and 2.02). The following three vignettes illustrate dilemmas faced by psychologists working as utilization reviewers for MCOs and some possible responses to those dilemmas.

Vignette 7 Situation Dr. Bill Payer has been offered a job in an MCO's utilization review department. Issue Is it unethical for Dr. Payer to work for a managed care company? Discussion Although many psychologists decry the changes in practice brought about by managed care, there is nothing in the APA Ethics Code that prohibits Dr. Payer from employment within this industry. As with any potential position, Dr. Payer will need to evaluate the job responsibilities involved and his competence to fulfill these responsibilities, with particular attention to his obligations to the APA Ethics Code and state laws and regulations. Response Dr. Payer may wish to review Principles A-F of the APA Ethics Code as he considers this position, as well as specific standards that will be applicable to his work (Standard 8.01). In addition, Dr. Payer should carefully review the employment contract and the company's UM policies. Standard 1.03 requires Dr. Payer to provide services only in the "context of a defined professional ... role," and he is advised to clarify this role at the outset. He should evaluate the job demands in terms of the professional judgments he will be required to make and refer to Standards 1.06, 1.15, and 1.16 in this regard. Dr. Payer may wish to consult with others as he considers the position (Standard 8.02). Standard 8.03 may be useful in guiding his preemployment discussions with the company.

Vignette 8 Situation After taking a job with the MCO, Dr. M. Ployee learns that the president of the company, Ms. Ivanna Profit, has recently imple2

Recently, in the first case of its kind, an Arizona state appellate court found that UR decisions are clinical, not business or insurance, decisions. They required the provider to determine whether the procedure is appropriate for the symptoms and diagnosis of the condition; whether it is to be provided for the diagnosis, care, or treatment; and whether it is in accordance with standards of good practice. (Murphy v. Blue Cross Blue Shield of Arizona, 247 Ariz. Adv. Rep. 35 [1997]). Psychologists are advised to pay attention to this emerging area of law, as well as related legislative activities.

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mented an employment contract for utilization reviewers that provides incentives to pay specific attention to issues of cost containment. The incentives include gifts, vacations, and other financial rewards. Important features of the contract are year-end bonuses for reviewers and the implementation of an employersponsored incentive plan based on the company's overall profitability and performance. Issue Dr. Ployee is now confronted with a potentially significant conflict of interest: His overall income will increase as a direct function of the total amount of care he denies to insureds. Further, because the overall bonuses or incentives are distributed among the reviewers in the department, each reviewer is subject to strong peer pressure to deny care.

Discussion Dr. Ployee must be extremely vigilant in the performance of his job duties. Attention should be given to Standard 1.15 of the APA Ethics Code (1992), which states in part that psychologists, "are alert to and guard against personal, financial, social, organizational, or political factors that might lead to misuse of their influence." In addition Dr. Ployee needs to pay particular attention to Standard 1.16(a), which prohibits psychologists from participating "in activities in which it appears likely that their skills or data will be misused by others, unless corrective mechanisms are available."

Response Fortunately, Standard 8.03 provides guidance for Dr. Ployee. On the basis of standard, Dr. Ployee should bring to Ms. Profit's attention the apparent or real conflicts between the company's incentive program, his job responsibilities and the Ethics Code. Dr. Ployee should "clarify the nature of the conflict, make known [his] commitment to the Ethics Code and, to the extent feasible, seek to resolve the conflict in a way that permits the fullest adherence to the Ethics Code."

Vignette 9 Situation Mr. Lonely, a 65-year-old divorced white male, with a diagnosis of substance abuse and major depression, has chronic suicidal ideation, but no clear current suicide plan of action. Dr. Helper, the psychologist-reviewer for the MCO that provides Mr. Lonely's health benefit, is being asked by the treating psychologist to authorize additional treatment for the patient. The MCO's policy is to authorize additional sessions above the standard limit only when there are life-endangering conditions. These conditions include being "actively suicidal," which is defined by the MCO as having a clear and imminent plan of action. Issue The conflict faced by Dr. Helper is that the patient may be at serious risk for self-harm. She has reviewed the treating psychologist's report and treatment plan, and she believes that the decision

tree used by the company fails to identify all of the factors that should be considered for potential self-harm.

Discussion Dr. Helper must consider whether she is making a competent assessment of the lethality of this patient if she uses the MCO decision tree and whether the MCO's organizational demands conflict with her obligations to the welfare of the patient.

Response Dr. Helper should consult with the treating psychologist to determine if she has enough information to judge the likelihood of suicide and the benefits of authorizing additional services. Depending on the situation, she may request more information. If the patient's presenting problems fall outside of Dr. Helper's area of expertise, she may request consultation with knowledgeable peers. The Ethics Code requires psychologists to identify when organizational demands force them to compromise their obligations under the Code and to seek to change those policies when appropriate (Standard 8.03). This may require the psychologist to request a formal review of the MCO's definition of actively suicidal, as well as the procedures used to review these difficult cases.

Recommendations for Psychologists Delivering Professional Services Subject to Utilization Review Many psychologists are not employed by MCOs but have contracted to provide professional services to patients with health care benefits administered by MCOs. The following specific recommendations are provided for these psychologists. Standards of the APA Ethics Code are referenced where appropriate. 1. When an MCO denies needed care, psychologists should assist the patient in trying to obtain the needed services. This may require working with the patient to appeal the decision or writing to the clinical director to notify the MCO of the potential adverse consequences to the patient. It may also involve exploring other options available outside of the MCO (Standards 1.14, 1.15, 4.02, 4.08, 4.09, and 5.0). 2. When psychologists believe that an MCO's authorization for treatment is less than appropriate care, they should consider other available options and possible consequences for the patient's welfare and should act in the best interests of the patient within their ethical obligations. It is important to inform and discuss with the patient the implications of any decisions being made. The decision may be to appeal the MCO's decision or to accept the UR determination and proceed with the authorized treatment. Of course, it is essential that the treating psychologist has an adequate clinical basis for the appeal. Whatever the psychologist and patient decide to do, it should be based on helping and not harming the patient (Standards 1.14, 4.02, and 4.08).

Summary As psychological practice has undergone changes brought about by managed care's increasingly high level of market penetration, practitioners have raised many questions about the ethics of working in or with managed care organizations. Although many of these questions are framed in the context of concerns about the ethics of

ETHICS IN MANAGED CARE such systems themselves, others address particular dilemmas that arise during the day-to-day conduct of practice. Many of these dilemmas involve the clash of two different points of view. When considering an issue exclusively from a cost-driven perspective, business ethics (which do exist) prevail. When considering the same issue from a care-driven perspective, psychological ethics prevail. The juxtaposition of these opposing alternatives creates "catch-22" situations and is the key to many of the dilemmas psychologists face in the current marketplace. Decisions to terminate treatment or whether a given intervention is "medically necessary" may be cost driven, care driven, or some balance of the two. In making a determination about the ethics of any specific situation, psychologists must also be clear about the meaning of the terms ethics and ethical, which can have various connotations depending on the context in which they are used. In the broadest sense, the term ethical may refer to overarching moral principles, such as autonomy, beneficence (doing good for others), nonmaleficence (doing no harm), fidelity, and justice. In this article we have used the term ethical in a more narrow sense, referring to the APA's "Ethical Principles of Psychologists and Code of Conduct" (APA, 1992), or to codes of ethics adopted by state boards of psychology. Although MCOs' actions often offend the ethics of many practitioners in the first sense of the term (e.g., they are seen as morally outrageous), these actions may not always rise to the level of an actual violation of the APA Ethics Code. In trying to sort out whether there is an actual or potential violation of the APA Ethics Code, the individual psychologist will have to seek his or her answer through careful application of a systematic problemsolving and decision-making process, including consultation with peers who are knowledgeable about the Code. The psychologist should acknowledge that there is no mandated "right" course of action in many circumstances and that there may be more than one possible appropriate solution. In fact, different solutions, all of them appropriate to the individual circumstances, may well be arrived at by different people at different times. Finally, psychologists facing managed care dilemmas must recognize which of them are beyond the power of an individual acting alone. This is one reason that the recurrent recommendation that consultation with knowledgeable colleagues should be sought, and for our belief that all psychologists should be involved in systemic advocacy.

References American Psychological Association. (1963). Ethical standards of psychologists. American Psychologist, 18, 56-60.

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American Psychological Association. (1992). Ethical principles of psychologists and code of conduct. American Psychologist, 47, 1597-1611. American Psychological Association. (1993). Record keeping guidelines. American Psychologist, 48, 984-986. American Psychological Association, Board of Ethnic Minority Affairs, Task Force on the Delivery of Services to Ethnic Minority Population. (1990). Guidelines for providers of psychological services to ethnic, linguistic, and culturally diverse populations. Washington, DC: Author. American Psychological Association, Board of Professional Affairs. (1998a). Benefits and costs of psychological assessment in health care delivery: Report of the Board of Professional Affairs Psychological Assessment Work Group, Pan I. Washington, DC: Author. American Psychological Association, Board of Professional Affairs. (1998b). Problems and limitations in the use of psychological assessment in contemporary health care delivery: Report of the Board of Professional Affairs Psychological Assessment Work Group, Part II. Washington, DC: Author. Haas, L. J., & Malouf, J. L. (1995). Keeping up the good work: A practitioner's guide to mental health ethics (2nd ed.). Sarasota, FL: Professional Resource Exchange. Harris, E., & Bennett, B. E. (1998). Sample psychotherapist-patient contract. In G. P. Koocher, J. C. Norcross, & S. S. Hill (Eds.), Psychologist's desk reference (pp. 191-196). London: Oxford University Press. Kitchener, K. S. (1984). Intuition, critical evaluation and ethical principles: The foundation for ethical decision-making in counseling psychology. The Counseling Psychologist, 12, 43-55. Mental health: Does therapy help? (1995, November). Consumer Reports, 60, 734-739. Murphy, M. J., DeBemardo, C. R., & Shoemaker, W. E. (1998). Impact of managed care on independent practice and professional ethics: A survey of independent practitioners. Professional Psychology: Research and Practice, 29, 43-51. Murphy v. Blue Cross Blue Shield of Arizona, 247 Ariz. Adv. Rep. 35 (1997). Phelps, R., Eisman, E. J., & Kohout, J. (1998). Psychological practice and managed care: Results of the CAPP practitioner survey. Professional Psychology: Research and Practice, 29, 31-36. Rothbaum, P. A., Bernstein, D. M., Haller, O., Phelps, R., & Kohout, J. (1998). New Jersey psychologists report on managed mental health care. Professional Psychology: Research and Practice, 29, 37-42. Seligman, M. E. P. (1995). The effectiveness of psychotherapy: The Consumer Reports study. American Psychologist, 50, 965-974. Received February 5, 1999 Revision received July 22, 1999 Accepted August 3, 1999