Medical Examiner

Is My Work “Medically Necessary”?

How insurance companies try to get around rules for mental health care.

Psychotherapy is medically necessary.
Insurance companies retain the right to determine whether mental health visits are “medically necessary.” 

Photo illustration by Slate. Photo by Thinkstock.

I was completing my predoctoral internship in clinical psychology in 2008 when the Mental Health Parity and Addiction Equity Act went into effect. As a graduate student, I’d spent four years seeing cases practically for free as part of my training, and one unintended consequence was that on the brink of becoming a mental health professional, I’d had no exposure to the vagaries of insurance-supported treatment.

I did read the newspaper though—an actual one, back then—and knew of MHPAEA. It sounded like good news. And it was: It expanded access to psychotherapy by requiring group plans that covered mental health to ensure that financial requirements (e.g., copays and deductibles) and treatment limitations (such as caps on visits) could be no more restrictive for psychological services than they were for physical ones. If your copay was $20 for a physical, it was $20 for a shrink visit. If you could see your primary care physician as often as you liked, so, too, your therapist.

What was cause for celebration, though, soon also became a source of consternation. While mental health visits could no longer be officially limited outright, the insurance companies retained the right to determine whether sessions were “medically necessary.” To make this determination, HMOs that oversaw the plans carried by most patients at the not-for-profit clinic where I completed my postdoc hours required clinical reviews after the first 10 or 20 sessions.

Medically necessary: The term seemed grave. I’d get on the phone for a “utilization review” with someone called a case manager, and I’d make an argument for ongoing therapy. Mind you, I was treating foster kids who’d watched their parents cuffed during drug busts and adults whose emotional struggles with chronic illness left them practically housebound. Still, the case managers were dubious and bullying, trained primarily, it seemed, in suggesting that my patients and I were trying to get away with something. These people actually made me feel guilty. Was what I was doing necessary? To admit I was unclear about what that meant would surely cost someone her coverage. I never pushed for a cogent definition of “medical necessity.”

As it turns out—in regard to mental health, at least—there isn’t one.

I’ve been in private practice since 2010. Most of the people I see submit their bills to their insurance companies for reimbursement. It’s a testament to the integrity in the industry that these reimbursements often come through without a hitch. (Though only in this era of predictable corporate malfeasance could a company simply making good on its contractual obligations be praised for its integrity.) Somehow, four entire years went by during which I never once had to submit to a utilization review. But in the past year, possibly because of increased cost concerns in the wake of the Affordable Care Act, I’ve received a handful of phone calls, each caller requesting that I schedule a talk with a case manager.

After making sure that my patients were OK with this violation of their privacy, I obliged, but the first scheduled call I slept through (a Freudian slip!), and the reviewer never called back. For the second, I set a calendar reminder, and the reviewer and I had a polite conversation about my patient’s tribulations. Eventually she got down to it: How much longer did I think I’d be seeing him? My goal for this patient—for everyone I see—is a rich life in which he can enjoy satisfying relationships, work fruitfully in some capacity, and experience fully the range of emotions a true human existence requires. The goal of the insurance company is to contain costs. I decided to stop pretending to be on their side and lay my cards on the table. “John and I could work together productively for another five years,” I said.

“That’s all well and good,” replied the reviewer. “If he wants to stay in treatment to deal with developmental issues, he is certainly welcome to do that, but we are not going to pay for it.” So, some years past due, I finally asked: What exactly was it that they were willing to reimburse? She said she’d send me a secure link to her company’s website so that I could read about “medical necessity.” (Such information is not made available to the general public, or she might’ve just told me to Google it.) We agreed I could see the patient for another year before the next review.

The link took me to the following definition, which as it turns out is a fairly boilerplate one in health care:

Medically necessary services are those … that a practitioner, exercising prudent clinical judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing or treating an illness, injury, disease or its symptoms, and that are a) in accordance with generally accepted standards of medical practice; b) clinically appropriate, in terms of type, frequency, extent, site and duration, and considered effective for the patient’s illness, injury or disease; c) not primarily for the convenience of the patient, physician or other healthcare provider; and d) not more costly than an alternative service … at least as likely to produce equivalent therapeutic … results.                       

It’s difficult to translate psychotherapy into medicalspeak, but if I set aside my bias against calling my patients diseased, I believe that my work always falls comfortably within the range of medical necessity. Given the ambiguity of the language, though, and the fact that problems in living cannot yet be biopsied, it is all but impossible to debate anyone who simply declares that it does not. It reminds me of a fight my 5-year-old likes to have on the playground. “I win!” she’ll announce to a friend after participating in a contest that never had any obvious criteria for victory. “No, I do!” the other kid will shout passionately. Without the intervention of a parent, they will go on like this for some time, growing more heated with each round.

In the case of insurance companies, psychotherapists, and denial of coverage, the parent most often asked to step in is the state. In 2001, New York, where I work, found six large managed-care organizations not in compliance with state law after they’d made a practice of giving no reason for denial of claims other than “not medically necessary.” In issuing the decision, the attorney general noted that patients with psychological conditions appeared to be more vulnerable to abusive medical necessity practices than patients with physical ones, not least because medical necessity is harder to define and measure in mental health. But even holding insurers to a higher standard—i.e., forcing them to state specifically what makes a treatment unwarranted—does little to solve the problem. Citing an arbitrary fact or two about a patient’s functioning and insisting it negates necessity is hardly substantively better than just saying “not medically necessary.”

The third insurance company phone call I got last year concerned a patient who had increased his session frequency to twice a week. Having recently suffered a grave loss, he was having persistent, intrusive thoughts about killing himself. He was very afraid he might actually do it. The psychologist conducting the case review wanted to know how long this man and I would need to see each other each Monday and Wednesday. “We don’t really pay for that,” she said. “Twice a week is only for a crisis.” I did not bother to ask her to define “crisis.” It seemed clear that “crisis,” like “medical necessity,” is whatever the insurance company says it is in order to justify not paying. If it goes that far, I look forward to appealing its decision with the state.  

One could certainly make a case for health insurance not covering psychotherapy at all. Why should an insurer be obligated to pay for a treatment that relieves emotional suffering? Is that not a luxury, like massage, that could come out of pocket? A case in the opposite direction is just as easy to make, as many reimbursable medical procedures are about relieving intolerable pain. (Never mind that research shows that psychotherapy reduces general medical costs and indirect expenses like lost wages and disability payments in the long run.)

All of this is beside the point, though, if what is at issue are promises made in writing to the individual customers or large group employers who choose insurance plans in good faith. I am ready to go to bat for my patients’ rights to receive the benefits that they pay for when they buy insurance, but I am incensed that I may have to. Twenty percent of health care spending in this country currently goes to administrative costs like these, and the amount spent on mental health care administrative costs is disproportionately high. Insurance companies should stop wasting resources on all but meaningless utilization reviews and put it toward the services their members buy from them. No one goes to therapy to kill time. The industry should stop trying to cut costs by acting as if this is ever even remotely the case.