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Having spent nearly 25 years in a business completely unrelated to healthcare before studying under some brilliant minds at Kellogg Northwestern and Harvard Business School as I was earning my MBA, I feel I bring a fresh, albeit sometimes naïve, perspective to the business of healthcare.  Wherever possible, I try to use this to our patient’s advantage. Our patients need and deserve as much advocacy as possible, to include from those who come from other industries and see best practices not being performed in healthcare. A few of the things in our area of behavioral healthcare that are exceptionally bothersome to me include:

Lack of transparency on prices and quality

Lack of meaningful and universally accepted outcome measurements that patients and payers need in order to know who does what and how well they do it

Lack of meaningful accountability on all ends

The fee for service model

The damage caused to patients by care that can sometimes be so incredibly fragmented, unintegrated, and poorly aligned.  

Recently I had to deal with something that simply did not sit well, and what unfolded so negatively impacts our patients that it is worthy of discussion. Several weeks ago, we received a call from a person who wanted to learn more about SunCloud Health (SCH).  It turns out the individual had seen Dr. Kim, Founder and Medical Director at SCH, when they were at Timberline Knolls (TK), then under Dr. Kim’s leadership, a few years ago. She had developed a great relationship with Dr. Kim while in treatment at Timberline Knolls and wanted to learn more about what Dr. Kim is now doing at SCH. At the end of the initial evaluation, it was determined that this person was an ideal fit for the services provided at SCH, not to mention the fact that the person had a previous therapeutic relationship with Dr. Kim which, at the time, resulted in a dramatic improvement in the individual’s life.  Research in the mental health and addiction field supports the notion that an individual’s relationship with their therapist is a key and integral factor in treatment.  

The woman mentioned above was ready to start treatment at SCH the next day. The only problem with beginning treatment was that we were not in-network with her insurance company…YET.  In fact, as of the time of this situation, we had been in the process of negotiations for months with this insurance company and had been told that we were close to finalizing a deal to go in-network with them. Thus, they know who we are and that we have all of the quality credentialing they need to feel confident in the care we provide. In addition, they know of Dr. Kim through her experience as CEO and Medical Director at TK.  That said, at this time we were not officially in-network and this patient needed to use their insurance to pay for services. As a result, we did the only thing we could do under these circumstances and applied for a single case agreement that would provide an exception to allow us to treat this particular patient at rates at or near those that would apply if we were in-network.

With this patient, we felt our case for the exception was pretty rock solid. As a part of our proposal, we also made an offer to the insurance company that, to the rest of the world, would seem “impossible to pass up”.  Our case to the insurance company included the fact that the patient had had a good therapeutic experience with Dr. Kim in the past which resulted in positive outcomes, she was committed to working with Dr. Kim and the treatment team at SCH, and we at SCH felt that we could provide her with what she needs at this point in her life. Medical necessity was clear according to American Society of Addiction Medicine (ASAM) criteria AND we offered to provide service at WHATEVER PRICE the insurance company was willing to pay us.  We made it clear we would literally do it for any amount of money.  One would think all of this would have been enough.

Despite all of this, the decision was unfortunately as feared – DENIED.  It was denied on the basis that, according to this insurance company, there are other treatment centers in our surrounding area who are in-network with this insurance company and can provide similar services. Therefore, the member should go to one of these other “comparable” facilities.  They did not care that we were willing to provide treatment at whatever price they wanted, and they apparently did not care that the member had a good relationship with Dr. Kim and felt if anyone could help her, she and the team at SCH could. Thus, if this woman wanted to receive treatment at SCH, she would need to pay for it herself with her “out-of-network” benefits, which means no discount from the insurance company and self-pay. Although we proceeded with this woman, we were left dumbfounded as to why this case was denied.

First, it is not true that there are other outpatient treatment centers in our area providing similar or comparable care.  What we do here with co-occurring disorders and how we do it is relatively unique.  Most in our area treat one symptom or the other and they do so by tracking people based on their “primary” symptom. Rarely do they treat more than one symptom in one facility and, even more rarely, do they spend as much time getting to the underlying cause of the self-destructive behavior as they do on the symptoms.  And even if I am dead wrong about this and there are dozens who do exactly what we do within 2 miles of our location with equal or better outcomes, how would anyone know? We don’t measure or compare standardized outcomes in this field! This drives us crazy here at SCH. We are advocating every day for the inherent value of outcomes and the shift from fee for service to value based reimbursement, but for today, it’s not happening.  Thus, none of us really know what is true and what is not true with regard to who does what and how well they do it.  To deny based on what is really nothing more than a guestimate is just plain ignorant and wrong.

Second, treating a person with depression or an eating disorder or some form of deep trauma is not the same as replacing a knee or fixing a broken wrist.  Yes, we all need to feel comfortable with the doctor from whom we seek treatment for any ailment, but WAY more so in this field than in any other. There has to be a high level of trust and an unwavering sense of safety in the Doctor/Patient relationship when treating these illnesses. The data shows this is a critical piece of treatment which leads to improved outcomes and it should be weighed heavily when considering whether or not to support a patient in getting help from someone with whom they feel safe and have a good and healthy relationship.  This was the case here and yet it did not make enough of a difference.  In our opinion, this alone should have been basis to approve the single case agreement.

Third, we literally offered to treat this person for essentially any amount the payer wanted to pay us.  At first, this really got me that this went in one ear and out the other.  After all, we are on the verge of entering in to an in-network agreement with this insurance company and never before have I had such a good product or service and offered it at “any price”.  After all, we meet all of this insurance company’s quality criteria for such agreements.  They know us, they know our Medical Director and CEO, and they know that she has an exceptional reputation in this field. If they didn’t know all of this, I would expect a denial.  It wasn’t as if we were approaching this insurance company and asking for $1,000.00 per day for treatment when their contracted rates with their in-network providers is $250.00 per day! If this were the case, I would expect a denial.  In any other business, the buyer would have accepted our offer 10 times out of 10, yet not here. 

I was so bothered by this denial that I reached out to one of my former business professors who is now teaching business strategy in healthcare at Harvard Business School. Admittedly, she was able to help me at least think through it a bit. Her response, from an economic perspective, was that economists believe “selective contracting” is necessary for lower negotiated rates and therefore this was likely the basis of the denial.  Part of the in-network process includes negotiating highly discounted rates for insurance companies and their members from a select group of providers in exchange for volume. She also noted that if the insurance company agreed to pay for this woman to be treated at a facility not currently in-network it could potentially upset some other provider in the network. Needless to say, neither reason seems anywhere close to enough basis to deny care in this case.  Illinois does have an “any willing provider” statute, but it does not apply to this case unfortunately.

In thinking through the concept of selective contracting, I, of course, understand the concept of having networks with a select group of suppliers who provide similar products and driving cost down from them in exchange for volume.  In my experience, I have found this negotiating technique to be most useful when demand is greater than supply, and in general, the technique can be useful with many businesses and maybe even some areas in healthcare- BUT NOT OUR’S!  A patient’s interests should come before the interests of the network, especially if it is a case such as this one.

Further, we currently do not have the means by which to evaluate or compare “precise products” in this field.  Thus, how can an insurance company select whom they will contract with and whom they will not contract with (and at what price) if they don’t even know who really does what and more importantly what they do and do not do well?  Second, even if we ignore this and were to concede the value of selective contracting in our field, is this really a legitimate and moral basis for denying a patient the care that they want and need? I would argue someone’s life is far more valuable than upsetting the apple cart with the “network”, especially if it can be done at a lower cost and at least as well as others.  Third, in the outpatient treatment of co-occurring disorders, demand is far greater than actual supply. Good providers are needed and patients are suffering as a result of care that often does not meet their needs! Many say they can treat what we treat at SCH, but the reality is few actually can.  In fact, this is one of the reasons Dr. Kim started SCH.  In her role at the residential level at TK, where they do treat co-occurring disorders, she and her medical team would often struggle to find patients an outpatient treatment center that was capable of continuing with the relatively sophisticated level of treatment that their patients would receive while in residential.  The reason for the struggle is that not many exist.  This would often lead to relapses and re-admissions and is one of the reasons why Dr. Kim is so interested in providing this quality of care at the outpatient level – she knows there is a high level of need!  When demand for a product or service exceeds supply, selective contracting can be useful as a means to offset some of the supplier’s “power”.  However, when a supplier is willing to provide a product or service at “any price”, negotiating is simply not necessary.

Our patients face so many obstacles and barriers in getting the right treatment at the right time for their specific needs.  From stigma to not knowing where to go and why, patients often rely on their insurance companies to help them make the right decisions. In this case, the right decision was to grant this single case agreement exception that we filed on behalf of the patient. There was no economic, moral, or medical reason to deny it and lots of rational and compelling reasons to grant it.  Our hope is that nobody has to experience what this patient went through with this case.  Our patients deserve more and better care from all of us.  Allowing a provider like us to treat this particular case was the right decision for this patient.  All of us benefit when patients heal.  Our interests should be aligned.  One day they will be.  I believe that.