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Opinion & Essays - Aug, 1992 Issue 

Insurance Non-Reimbursement For Clinical Services At Licensed Residential Schools: A Paradox?
By Dr. D. Eugene Thorne, Executive Director
Discovery Academy
(801) 374-2121

It has been a curiosity and frustration to me and many of my colleagues in the field of adolescent treatment to observe the continuing “refusals” by many insurance companies to include within their policy coverage almost identical services provided by or under the direction of licensed mental health workers at residential treatment facilities. This situation is particularly baffling when listening to the litany of complaints from insurance companies about their rising costs! It appears as though they are shooting their own feet.

In my experience, I personally massaged another school’s "program" into qualifying for JCAH accreditation; this was done with the hope that the services provided by that school’s professional staff would qualify its insured-parents’ to receive appropriate reimbursement for mental health services provided their youngsters.

Reimbursement was obtained. But, in order for that school to qualify for JCAH, it had to frequently and “meaninglessly” increase staff and facilities (and, such increases inevitably followed by increases in its fees). That school’s fees are now more than double or triple what they were before JCAH! Now, the insurance carriers are putting great pressures upon that school (and other similar schools) to reduce the time of enrollment (as well as fees), thus compromising the school’s ability to do its job effectively and “right”.

DISCOVERY ACADEMY, like many other schools, is consciously trying to keep its fees as low as feasible. In facilities such as psychiatric hospitals, JCAH standards are probably useful, maybe even needed; but, in residential treatment facilities, such as the ACADEMY, these standards are too often irrelevant and useless, and, they create cost burdens with no appreciable “outcome gain” for similar-service-recipients.

Am I alone in believing that “patients” as well as insurance carriers would often be better served by longer, more intensive, but less expensive therapy services which are provided by licensed residential treatment facilities? Does it seem to others that it is paradoxical for insurance carriers to demand compliance with standards (such as those of JCAH) which appear only to increase costs without any demonstrable increase in outcome effectiveness; and, then, to refuse to reimburse parents who utilize these more cost-effective and outcome-effective, licensed, residential treatment facilities?

(Let’s talk about this matter of insurance companies apparently insisting on higher cost programs. I’m sure Dr. Thorne would appreciate hearing of some of your experiences and/or suggestions of what might be done, as would I. Letters and essays are welcome for future issues.) - Lon

Copyright © 1991, Woodbury Reports, Inc. (This article may be reproduced without prior approval if the copyright notice and proper publication and author attribution accompanies the copy.)

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