Insurers’ Group Second-Guesses Doctors to Cut Medical Costs : Medicine: Patients suffer, physicians and psychiatrists say, in debate with ‘utilization reviewers’ over who is sick enough for care.

A Marine staff sergeant on duty in the Middle East received a troubling call from relatives back home. His 21-year-old wife had gotten hooked on drugs and booze while he fought in Desert Storm.

The sergeant rushed back to Upstate New York, sure that insurance would pay for her recovery. But that was before he heard of something called utilization review.

He learned, as have thousands of other Americans, that seemingly generous insurance benefits cannot be collected unless approved by examiners they never knew existed.

These people, called utilization reviewers, are free to ignore the judgment of doctors and the wishes of patients. Their mission is simple: Pay for the least acceptable amount of care--and save money.

When this approach works properly, everyone benefits. Even the strongest critics concede that the majority of utilization review firms try hard to provide adequate, reasonably priced care.

The reviewers say they are reining in a profession that grossly overspent and overtreated.

“You have to understand how much waste is in the system,” said Travers Wills, president of MCC, one of the nation’s largest utilization review companies. “Just the presence of a managed-care company will cut costs in half.”

But many believe some review companies go too far in their zeal to save. They complain that bad apples use phone networks of nurses and social workers to deny expensive but required care to people with serious mental problems and addictions.

While there have been no systematic studies of how often people are denied needed care, prominent psychiatrists, addiction experts and patient advocates contend that the cases are distressingly common. Some have had disastrous results--even suicide.

“Lots of people are being harmed,” said Dr. Lawrence Hartmann, president of the American Psychiatric Assn. “Many people are not getting treatment they absolutely, clearly need . . . because of these reviewers and their red tape. The consequence is a sicker and more dangerous society.”

Those who agree point to such cases as Esther Evancho, the sergeant’s wife in Upstate New York.

According to a hospital report, she was taking drugs, writing bad checks, blacking out while driving drunk. She even abandoned the couple’s 15-month-old baby for a week. She was depressed, anorexic and had high blood pressure.

First her husband drove her to an outpatient drug treatment center. Too sick for this program, the people there told him. Take her to the hospital, they said. He did, and she was admitted.

The next day, a utilization review company under contract with the federal Civilian Health and Medical Program of the Uniformed Services, or CHAMPUS, refused to pay. Its decision: She was not sick enough to be in a hospital. Outpatient care would suffice.

But outpatient care hadn’t worked in the past.

“I’d go to outpatient and an hour or two later I was using again,” Evancho said.

Often at such junctures, patients simply are sent home. But at the alcohol treatment center at St. Jerome Hospital in Batavia, N.Y., program director Israel J. D. Nelson felt he could not ethically do that.

The hospital kept Evancho three weeks and broke her addictions--without charge.

“There were clear medical reasons to suggest she needed inpatient care,” Nelson said.

Evancho said she has been free of drugs and alcohol for nine months. “I don’t think I would have made it without the hospital care,” she said.

CHAMPUS officials declined to comment on Evancho’s case, citing patient confidentiality. But Michael Carroll, a CHAMPUS mental health program specialist, said no one is denied benefits for financial reasons alone. Instead, the program will pay for “the lowest appropriate level of care.”

He also denied that utilization reviewers tell doctors how to do their jobs.

“We say, ‘Doctor, it is your responsibility to treat the patient. If you disagree with our decision on money, then you do what is best for the patient,’ ” he said.

Hospital administrators say they would go out of business if doctors admitted mentally ill and addicted patients without assurances that the bills would be paid.

According to the psychiatric association, about 80% of Americans with health insurance have their cases scrutinized by some type of utilization review.

Dr. Roger S. Taylor, president of the industry’s Utilization Review Accreditation Commission, said that is a big increase from the early 1980s, when mental illness represented less than 5% of total health care costs.

But in recent years, mental health costs have grown faster than other care. CHAMPUS charges for mental illness hospitalization, for example, nearly doubled from 1986 to 1989.

“With benefit costs increasing at 18% a year, something has to be done,” Taylor said. “There is some pain associated with it, but it’s effective.”

Psychiatrists and hospital administrators are among the most outspoken complainers about utilization review. Those who defend the industry contend that there is a good reason: They are the ones hurt financially by reviewers’ cutbacks.

Until recently, doctors could treat patients at least until benefits ran out. People were routinely hospitalized for 28 days--the most some insurance policies allowed--when perhaps a week or less might have been enough.

“Why is it that on the 29th day of hospitalization, the patient miraculously responded? That doesn’t make sense,” said Charles W. Stellar, executive director of the American Managed Care and Review Assn.

But medical professionals are not the only critics of utilization review.

“It’s ridiculous when a clerk who has never seen a child says the child does not need inpatient treatment, contrary to what a professional has said,” said Robert Yacobi, a juvenile court judge in Newport News, Va., who retired in January. “I have seen people refused inpatient treatment who were diagnosed as suicidal and a danger to themselves.”

A recent New York state survey conducted by the Legal Action Center, a public interest law firm, concluded that “current utilization review practices are having a devastating impact on the ability of people with alcohol and drug problems to get the treatment they desperately need.”

In dozens of interviews with the Associated Press, psychiatrists, drug counselors and other professionals repeatedly complained that these controls are hurting the sick. They charge that when the system works poorly, utilization reviewers:

- Do almost anything to keep people out of hospitals, by far the most expensive place for treatment. Many allow hospitalization only for those clearly at risk of killing themselves or others. Even then, rigid criteria can keep dangerous people on the streets or send them home too soon.

Dr. Glen Gabbard, medical director of the Menninger Memorial Hospital in Topeka, Kan., remembers a depressed woman discharged because a utilization reviewer insisted that she was not suicidal.

“She would say things like, ‘I don’t want to live anymore. I have no reason to live.’ She wouldn’t say, ‘I plan to shoot myself in the next five minutes,’ and that’s the criteria the reviewers use,” Gabbard said. The day after she was discharged, she took a drug overdose.

Like most others who complained about utilization review, Gabbard declined to identify the patient to protect her privacy.

- Insist that doctors sedate psychotic people, including children, so they can be discharged.

Dr. Robert Amstadter, a Pomona, Calif., psychiatrist, said one of his patients suffered a flashback of a sexual assault by her stepfather that reduced her to a whimpering child. She had to be hospitalized.

After eight days, the reviewer told Amstadter to “give her medication, even if I have to sedate her, to get her out of the hospital.” They cut off benefits after the 12th day. The hospital kept her another two weeks at a 50% discount.

“This guy made a medical decision without ever examining the patient,” Amstadter said.

- Sometimes make the sick even sicker. The constant worry that a reviewer is about to bounce a patient out of the hospital can actually slow recovery. Some refuse to give up thoughts of killing themselves, because they know it will mean they have to leave. Others worry that their families will be stuck with big bills.

Dr. Steven S. Sharfstein, medical director of Sheppard and Enoch Pratt Hospital in Baltimore, said one suicidal patient grew so distraught upon hearing that her benefits were being ended that she threw herself down the hospital steps and was seriously injured.

- Hunt loopholes to deny coverage. Dr. Carmen Palazzo, a New Orleans psychiatrist, admitted a severely depressed woman to a hospital after the woman’s husband came home and found her with a gun in her mouth. Six weeks later, a reviewer said insurance would not pay. The reason: The woman was overweight, and “that means she has an eating disorder, and we don’t cover eating disorders.”

- Make appeals a nightmare. Some doctors say they spend 20 hours on the phone to get a decision overturned--if they succeed. For patients, the task can be next to impossible.