Chapter 8: Working with the Managed Care System
Chapter Overview
The authors examine the history of managed care in relation to mental health and explain issues relevant
to providers and clients. This will include an in depth examination of types of managed care plans,
concepts and terms related to managed care, ethical concerns for practitioners and clients, and an
overview of counselor roles when working within a managed care system.
Key Words
Parity – Equality of value or being “on par” with other health services.
Nonmaleficence – A principle of bioethics that asserts an obligation not to inflict harm intentionally.
Capitation – Process of paying medical professionals a predetermined sum for each client in spite of the
cost of providing the services to the client.
Multiple Choice Questions
1. Jane Doe attended 6 individual counseling sessions at your private practice last year. You have not
had contact with Jane in over 6 months when you get a phone call from a nurse stating that Jane is
receiving treatment at a local medical clinic. The nurse asks for verbal information about Jane’s
involvement in counseling and her symptoms depression. You are not allowed to release that
information due to what federal law?
a) The HIIPA Security Act
b) The HIIPA Privacy Act
c) The Mental Health Parity Law
d) The Independent Medical Reviewer Act
2. Which of the following is a primary difference between HMOs and PPOs?
a) HMOs enter into agreements with helping professionals, and PPOs do not.
b) HMOs form “provider networks,” and PPOs do not.
c) c. Members of PPOs do not choose a PCP and are not required to use in-network providers.
d) d. PPOs only reimburse medical services and do not provide mental health coverage.
3. Which of the following are the primary goals of HMOs?
a) Provide quality of care
b) Prevent malpractice suits
c) Limit costs
d) Both a and b
e) All of the above
4. Which of the following laws was enacted by Congress to protect the privacy and security of
healthcare information?
a) The Mental Health Parity Act
b) The Independent Medical Reviewer Act
c) The Health and Social Services Act of 1998
d) The Health Insurance Portability and Accountability Act of 1996
5. In order to become a managed care provider, counselors need a 10 digit identification number, which
is assigned to aid in the electronic transmission of health information. This identification number is
known as:
a) National Provider Identifier (NPI)
b) Verified Provider Number (VPN)
c) Approved Provider Application Number (APAN)
d) Healthcare Provider Network Number (HPNN)
6. You have decided to apply to become a preferred provider. Which of the following information will
you need to provide?
a) Proof of licensure
b) Proof of liability insurance
c) Your Employee Identification Number (EIN)
d) Both A and B
e) All of the above
7. You receive a referral to begin counseling a 22 year-old female with symptoms of anxiety. Her MCO
requires that pre-authorization is obtained. Before sessions can be authorized, the MCO needs a document
providing information about the client’s need for treatment. This document contains a diagnosis and
treatment goals. Such a document is known as
a) Outpatient Treatment Record (OTR)
b) Managed Outpatient Review (MOR)
c) BIRP note
d) Patient Compliance Report (PCR)
8. In managed care language “efficiency” refers to:
a) Providing quality healthcare while streamlining resources and cost
b) Accomplishing symptom resolution for clients in the least amount of sessions possible
c) Keeping clear and concise documentation of sessions
d) Competing all necessary paperwork to grant clients access to care
9. Of concern is that managed care undermines the counselor-client relationship by:
a) Threatening clients’ trust in their counselor
b) Reducing the amount of time counselors spend with their clients
c) Impacting the availability of counselors
d) All of the above
10. By agreeing to be a contracted provider for an MCO, you are agreeing to
a) A reduced fee for the counseling services you provide
b) An adjusted fee for the counseling services you provide
c) A flexible fee for the counseling services you provide
d) None of the above
11. How long do counselors have to file a client’s insurance to be reimbursed for services provided?
a) 30 – 60 days
b) 60 – 90 days
c) 90 – 1 year
d) Time varies for differing companies
12. A utilization review consists of which of the following:
a) Suitability of treatment intervention
b) Treatment effectiveness
c) A statement from the client regarding whether they are satisfied with the treatment they are
receiving
d) A and B
13. One reason an MCO may choose not to authorize sessions is:
a) The client is diagnosed with a serious mental illness
b) The counselor is not a contracted provider
c) All of the counselors within a given agency are not approved providers
d) The client has made too many medical claims and is no longer eligible for mental health
coverage
14. Case notes are clinical data and in some cases it is unsuitable for non-mental health professionals to
review them. Counselors can consider sending alternatives such as
a) Treatment summaries
b) Case notes with sensitive information removed
c) Checklists that do not contain specific information
d) None of the above
15. Once a counselor elects to apply and become a preferred provider for an MCO, they are obligated to
continue to be a provider for how long?
a) One year
b) Five Years
c) No specified time amount
d) Until the MCO requires re-application
Activities
1. Research the parity law in your state and a neighboring state. What protections does each law offer? Is
there an external review process available in your state, such as Independent Medical Review Services, if
claims are denied? How are the laws of the two states similar? How are they different?
2. You will need to submit your Curriculum Vitae (CV) when applying to become a preferred provider.
Begin thinking about how to organize the information. What will you include? How will you format it?
Create a vita that could be used for application for provider status.
3. Because most managed care organizations require specific information to be submitted for approval of
sessions, reimbursement, or adding additional sessions to a treatment regimen, practitioners must be
mindful of keeping accurate records. However, because case records are clinical documents and not
always suitable for non-mental health providers to review clinicians routinely provide a treatment
summary for review. Find two examples of treatment summary formats and use these as a guide to create
a Treatment Summary Form that you could use for your own clients.
Discussion Questions
1. You recently saw a client for an initial session who is experiencing symptoms of depression and
anxiety after going through a divorce. You have diagnosed her with an Adjustment Disorder with Mixed
Anxiety and Depressed Mood. After submitting the Outpatient Treatment Record (OTR) to the managed
care organization, additional sessions are denied due to the diagnosis not being covered under the client’s
mental health plan. The client asks you to give her a diagnosis of Major Depressive Disorder, because she
knows it is covered under her plan. However, she does not fit the criteria. How would you proceed with
this client? Discuss the ethical dilemmas that may arise in this case. If the MCO refuses to authorize
additional sessions, what are two steps you can take to advocate for the client?
2. You were recently referred a new client by an EAP program which will cover the cost of 6 sessions. At
the conclusion of the 6 sessions, the client expresses a desire to continue working with you but states that
she cannot afford to do so. You have learned through your work with this client that her claims of
financial stress are real that her ability to pay out of pocket for counseling is limited. How do you
proceed? Should you provide free services? If not, what are your ethical and legal options for adjusting
your fee or bartering with the client? Cite applicable ethics codes to support your position.
3. You are a new professional filling out initial applications to become a provider for a variety of
managed care organizations. You realize that every application asks you to identify your “specialty”. You
have limited experience but you hold a degree in mental health counseling. How would you go about
identifying the areas you are qualified to provide services in? Support your work with current literature
related to counselor identity.
Multiple Choice Questions – Answer Key