Dan Shrager doesn't look like a hero. He bears no resemblance to Arnold Schwarzenegger. A Pittsburgh psychiatrist practicing psychodynamic psychotherapy and an academic associate member of APsaA, he takes pride in his work and is liked and respected by patients and colleagues.
Shrager could be appropriately compared to David of Biblical fame. Acting with singular courage, he brought the Goliath Magellan to its knees. In 2000 A.D., Shrager was called by the insurer Magellan (a psychiatric “carve-out” for Blue Cross) and asked for five complete patient records. Magellan sought the records in order to review Shrager, whom the insurer classified as a “high volume provider.” He responded that he could not comply due to concerns about his patients' confidentiality, none of his patients having given permission for this. Anticipating a dialogue with company officials regarding Magellan's policy on privacy safeguards, he instead was met with removal from its panel of providers. Magellan sent his patients letters informing them that Shrager's services would no longer be covered.
Alarmed, Shrager engaged an attorney and obtained an injunction preventing his removal from the panel, pending administrative review. The review confirmed his termination from the panel. Shrager went to court in October 2002, fighting to protect his patients' privacy. The Pennsylvania Psychiatric Society supported him, covering two-thirds of his legal costs.
Three points were at issue:
Whether Magellan had the right to access patient records without patient consent for the purpose of physician “re-credentialing.”
If consent is required, whether it should be obtained by the company or by the treating psychiatrist.
Whether redacted (de-identified) records require patient consent. Magellan defended its position based on its contract with the psychiatrist, which included an agreement to supply records for the purpose of re-credentialing. Magellan also maintained that the consent signed by the patient upon enrollment in the plan is valid blanket consent.
Robert Pyles, M.D., is chair of the Committee on Government Relations and Insurance, and a former president of APsaA. He would be very pleased to discuss any of these cases further, preferably by phone at 781-235-6211 or by email at . This is his regular column for TAP on politics and public policy.
As the psychiatric expert for Shrager, I focused my testimony on the ills of carveouts and managed care. Jim Pyles also provided expert testimony, using his detailed knowledge of HIPAA. Fortunately, the amendments to the HIPAA rules were not in effect at the time of the trial. The Magellan attorneys were well aware that the HIPAA amendments gave carte blanche for the mining of information by insurance companies, without patient permission, for business operations.
In March 2003, Judge Joseph James issued his decision. Shrager's refusal to turn over the records “was justified and his termination was not warranted. … It is apparent that public policy and the standard of care require that a wall be erected around the confidentiality of the patient's psychiatric history.” However, he did rule that the company was justified in asking for redacted records and that the psychiatrist should obtain that permission. (This point has been appealed by Shrager.)
This remarkable victory and significant legal precedent did not impress the managed care industry. Armed with the new HIPAA amendments, managed care companies understand that patients have no privacy rights, and the companies have become more brutal in their demands for records. Shrager met recently with Blue Cross, the parent company that has taken over for the bankrupt Magellan. Blue Cross indicated that the legal decision was inconsequential to it and applied only to a problem between Magellan and Shrager. Blue Cross made clear that it intended to continue to demand patient records without consent and would require Shrager to comply with this policy were he to continue to serve on its panel. Shrager's reply? “Not while I'm alive.”
And so the battle continues. But this time it's different. Dan Shrager has made a lot of friends, allies, and believers. This time he is not alone.
[Editor's note: For those still unfamiliar with some of the economic and legal terms involved, in this story, a “carve-out” occurs when an HMO subcontracts or “carves out” mental health services to a subsidiary company. Carve-outs have been declared inherently discriminatory by both the American Medical Association and the American Pyschiatric Association. “Redacted” is a technical legal term meaning that identifying data has been removed from the records.]