Crisis in managed care

A Foundation for Ethics in Mental Health Managed Care

The video above is a an expert panel I moderated on issues of ethics and effectiveness in addiction treatment at an international conference in London 2017.



The code of ethics in psychotherapy has been challenged. The U.S. and British governments are beginning to crack down heavily on unethical treatment practices. If you think it’s generally permissible to give or receive fees for patient referrals, you would be in violation by legal & regulatory affairs. As a mental health care professional, following such a tenet blindly will quickly put yourself on the wrong side of the law. As a patient, you may want to read along and learn your rights to protect yourself from fraud and scams that work against you.

Health Care Ethics
As healthcare professionals, ethics is paramount to everything we do in practice. It is no longer enough to subscribe to simply treating the patient as you would wish to be treated yourself. Ethics involves the application of a moral code to the medical practitioner. Let’s review the essential code for practitioners here:

The Hippocratic Oath states: “A solemn promise:
◦ Of solidarity with physicians…
◦ Of beneficence (to do good or avoid evil) and non-maleficence ‘primum non nocere’, or ‘do no harm’ towards patients…
◦ To maintain confidentiality and never to gossip.”

Health and care ethics have advanced rapidly and mental health practitioners are rapidly facing controversial scrutiny. The ethical concerns I am most interested in addressing here involve offering payment, incentives or discounts for referrals from colleagues or clients. Medical referral is the act of one professional or care-giver sending a patient to another, who may be a specialist and further managing the patient.

Patients depend on the medical information available to their health care providers. Therefore, the need for a referral, its appropriateness, timing and to whom the referral is made to mostly depends on the attending physician. This should be done after due consultation with the patient’s family and appropriate consent obtained. It is believed that a health practitioner should make a referral when he/she believes it will benefit the patient. Referring of patients causes a conflict of interest with physicians when inherent financial gains come from referring patients to facilities that they own or have investment in and when there is an exchange of fee for service. “Kickbacks” and self-referral arrangements can lead to over-inflated costs, exploitation of medical diagnoses, patient controlling and immoral competition.

With the rise of third party evaluators and referral agencies, these policies are being challenged and leading to dire consequences for practitioners, facilitators and the patients they serve. Governments often focus on potential kickbacks and self-referral arrangements in health care fraud investigations. One U.S. federal publication recently stated, “in some industries, it is acceptable to reward those who refer business to you. However, in the federal healthcare programs, paying for referrals is a crime.”

This truth is why I personally refuse to give or receive fees between referring practitioners or facilities. There are many governing policies addressing the issue of self-referral. It is inappropriate to accept fees or other compensation for referring a patient, as well as compensating another provider for a patient referral. In fact, many policies define in licensing or psychology practice laws that psychologists shall not bill for services not rendered (with the exception being missed appointments where the patient did not cancel in advance) and that doing so would constitute unprofessional conduct that may result in disciplinary action against the psychologist.

Such referral challenges as self-referral, and fee-splitting whereby a fee is paid to one health or care professional by another for a referral is unethical, and have been known to occur. Every clinician must subscribe to current legislation and ensure they are practising within the legal guidelines.

If you are a licensed mental health practitioner, I highly recommend that you continue to stay informed about your ethical codes. In the UK, you will find a broad range of principles outlined in Good Medical Practice – the handbook of the General Medical Council (GMC). U.S. “Anti-referral Laws” have subsequently been set up to prevent such actions and protect patients against abuse by health workers.

• The ACA Code of Ethics states in code A.10.b Unacceptable Business Practices- Counselors do not participate in fee splitting, nor do they give or receive commissions, rebates, or any other form of remuneration when referring clients for professional services.
• The NASW Code of Ethics states in code 2.06 (c) Referral for Services- Social workers are prohibited from giving or receiving payment for a referral when not professional service is provided by the referring social worker.
• The AAMFT Code of Ethics states in code 8.1 Financial Integrity- Marriage and Family therapists do not offer or accept kickbacks, rebates, bonuses or other remuneration for referrals. Fee-for service arrangements are not prohibited.
• The APA Ethical Principles of Psychologists and Code of Conduct (Ethics Code) also addresses this issue in Section 6.07

Nearly half of U.S. states have enacted statutory or regulatory policies barring psychologists from receiving any kind of “remuneration for referral of a client for professional services.” States with such a policy include Alabama, California, Colorado, Florida, Hawaii, Illinois, Indiana, Louisiana, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New Mexico, New York, Ohio, Pennsylvania, Texas, Virginia and Wisconsin.

Mental Health Care Fraud
In the U.S. sober home owners, doctors, and key staff have been indicted in a multi-million dollar health care fraud case and money laundering scheme, involving sober homes and addiction treatment centers, involving the filing of fraudulent insurance claim forms and defrauded health care benefit programs. Members of the conspiracy provided kickbacks and bribes to obtain residents for the sober homes. Although the sober homes were purportedly drug-free residences, some of the defendants permitted the residents to continue using drugs as long as they attended treatment and submitted to drug testing for income to the facility. The U.S. federal agents charged 3 South Florida defendants who abused patients’ insurance plans and according to federal authorities, led them into prostitution. Those sober homes lured residents with free rent and gifts and then referred them to drug-treatment centers. The defendants face a 10 year prison sentence for conspiracy to commit healthcare fraud. While South Florida’s opioid overdose crisis estimates over 800 addicts expected to die by end of 2017.

U.S. State legislator now proposes a bill to curb fraud in drug-recovery, with more government policies following suit.

Proactive Measures
In light of the government focus on these provisions, there are a few steps a provider can take to help minimize his/her exposure.
• Have a written policy in your practice regarding gifts. This should include prohibiting the giving and receiving of gifts to any patient or referral sources.
• Avoid all hidden or unsuspected danger or difficulty associated with your health care practise code of ethics.

Remember, ethics is about thinking. Do not be afraid to discuss ethical issues or to seek advice. Record all ethical considerations as you do clinical matters. Keep the welfare of your patient at the forefront; the safety of your patients is your first priority. Treat mental health policies with respect. If need be, be prepared to justify your position. If you are concerned about a colleague or associate’s conduct, you should submit an honest appraisal of your concerns to the appropriate person from your contracting or employing authority.

This information provided does not constitute legal advice. Prior to making decisions regarding your practice or received care, consult appropriate council. As always, reach out to me directly with your questions, and if you or a loved one are struggling with personal mental health issues, I may offer some help.

In good mental health and ethics,
~Noel McDermott

The practices of the company are governed by the principle of ‘do no harm’. Either by commission or omission. As professionals we have an obligation to challenge ourselves, and those we provide services to, to be the best possible. As a company we set clear goals around all services to ensure we can be measured by you. We set clear goals for you for the same reason. We don’t collude or enable. Our focus is on health and health promotion, not on creating a revolving door of fake fixes to illness leading to relapse and readmission, or the like. We are informed by the codes of ethics of relevant statutory and non statutory governing bodies, for example: the HCPC a statutory body regulating psychological therapies, health professionals and social care professionals. All those we source or who we directly provide services through the company will be appropriately qualified, regulated and insured.

Leave a Reply