Who’s Reaping the Benefits?

July 12, 1999 (This is an unedited, uncorrected transcript.)

CHARLES GIBSON We’re going to start tonight with a story about health care. If you are frustrated with your health coverage or the ability to choose your own doctor, you’re going to want to pay close attention to this story and what’s going on in Washington this week, because Republicans and Democrats are fighting over a patients’ bill of rights, and it will decide just what rights millions of you will have when you deal with your HMO or managed care company.

CONNIE CHUNG The right to adequate mental health coverage, for instance. Advocates for the mentally ill say mental health problems are more common than cancer or heart disease, affecting one in five American families. Yet, insurance providers have slashed coverage drastically over the past 10 years. Correspondent Lynn Sherr, with the story of one family who feels a company put profits first, with tragic results.

TIM PLOCICA He was not the type of person who was literally down in the dumps all the time. Usually, in fact, he had a smile on his face.

LYNN SHERR, ABCNEWS (VO) Joe Plocica, a retired pharmacist in Fort Worth, Texas, seemed like a happy guy. But he’d battled depression for years, and when he lost his part-time job last year, he tried to kill himself. Even in the hospital, Joe continued to talk of taking his life. His son, Tim, and wife, Kathy, told us he was put on a 24-hour suicide watch.

TIM PLOCICA They took the strings out of his shoes.

KATHY PLOCICA And the little cotton summer shorts that had drawstrings. He could not have those.

LYNN SHERR (on camera) If your husband, or father, or anyone in your family were suicidal and needed to be monitored around the clock, you’d probably want to keep him in a hospital under the watchful eye of a professional. That’s what Joe Plocica’s family wanted, too, as urged by his personal psychiatrist. If not, there was a good chance he’d try to kill himself again. But in our growing world of managed health care, what doctors and families want is not always what the patient gets—especially when it’s the mental health of the patient that is ailing. (VO) Joe’s doctor says he’d warned that his patient was still suicidal, not ready to go home but says when he went to the insurer ...

KATHY PLOCICA He was told that he could no longer stay in the hospital.

LYNN SHERR (VO) Or, as the family charges in a lawsuit, the insurance company wouldn’t pay for it. After 13 days, Joe went home.

KATHY PLOCICA This is nonsense. The man isn’t well. How can he go home?

LYNN SHERR (on camera) Could you have paid for it yourself?

KATHY PLOCICA No. No way, $900 a day.

TOM LANDRY (TV COMMERCIAL) NYLCare 65 will give you as many hospital days as your doctor will authorize.

LYNN SHERR (VO) The Plocicas were stunned. TV ads for their insurer, delivered by no less a local hero than former Dallas Cowboys coach Tom Landry, had promised full coverage. In fact, Joe’s policy guaranteed 190 days in the hospital for psychiatric care. But NYLCare 65, Joe’s insurer, like most insurers in the country, contract out mental health benefits to someone else. The Plocicas say that company, Merit Behavioral, didn’t honor the guarantee. And they say the decision to cut off Joe’s benefits, and thus remove his suicide safety net, was made by a company physician who never even met him.

TIM PLOCICA That doctor had not actually examined my father or his medical records. He was not his treating physician and did not have the information necessary to make an informed, educated medical decision.

KATHY PLOCICA Hadn’t laid eyes on him.

LYNN SHERR (VO) Still, the Plocicas say that doctor effectively sent him home, even though he was still talking about suicide on the day he was discharged. That same night, Joe waited for his wife to fall asleep, then slipped into the garage and drank half a gallon of antifreeze. When Kathy discovered him comatose the next morning, Joe was rushed back to the hospital, where doctors tried frantically to bring him back to life.

KATHY PLOCICA They put him on life support. He was immediately put on dialysis. It was terrible. And then to know that NYLCare was paying probably $5,000 or more a day to keep him in that state, and they couldn’t spend $900 a day when he was alive. That’s pretty crummy. That’s pretty crummy.

LYNN SHERR (VO) Joe Plocica never regained consciousness. His wife blames his death on the insurance company.

KATHY PLOCICA All I know is you can’t and shouldn’t send somebody home when they’re suicidal.

LYNN SHERR (VO) Magellan Behavioral Health, the new owner of Merit Behavioral, insists he was never denied coverage. The insurance company doctor in the videotaped deposition acknowledged that he did authorize less time in the hospital than was requested by Mr Plocica’s own doctor. But he says he expected the doctor to call him back to discuss the treatment further. Critics say Magellan and other insurers specializing in mental health are routinely keeping people with psychiatric problems from getting the medical care they need.

LAURIE FLYNN, NATIONAL ALLIANCE FOR THE MENTALLY ILL God help you if you or someone you love has a serious mental illness today. You’re going to face a tough road, and you may be staring at a tragedy.

HOTLINE OPERATOR (inaudible) Can I help you?

LYNN SHERR (VO) Laurie Flynn, executive director of the National Alliance for the Mentally Ill, says her organization gets between 5,000 and 10,000 complaints a year from patients who say they can’t get help from their managed care company.

LAURIE FLYNN We hear about suicides. We hear about tragic violence. Families call us terrified because their relatives are being discharged from a hospital after three or four days with a serious mental illness—schizophrenia, manic-depressive illness. And the doctors will say to the family, “I hate to do this. He’s really not ready to be at home. But I have no choice.”

STAR VEGA, PSYCHOLOGIST They tell us what to do, how to do it, and when to do it. And they don’t take our training, our experience, our face-to-face interaction with the patients into consideration. Hi, I need to obtain ...

LYNN SHERR (VO) Psychologist Star Vega is one of many mental health professionals who complain that managed care companies—not your personal physicians—are the ones making the decisions about how to treat your mental illness. How many therapy sessions you need for depression, what medicines you can take for schizophrenia, whether you really need to see a psychiatrist. And according to this group of former managed care company employees, you’d be surprised at how the decisions are often made.

JASMINE Intake. This is Jasmine. How may I help you?

LYNN SHERR (VO) For instance, who do you think is on the other end of the phone when you call your managed care company to get a doctor? Mark Hudson (ph) answered calls at a managed care company when customers, many desperate, called in to get a doctor’s name.

MARK HUDSON, FORMER MANAGED CARE COMPANY EMPLOYEE We actually had people calling us with kids screaming in the background, "I need to see somebody or I’m going to kill these kids." Or "I think you might want to send an ambulance. My husband beat me up." "My father has sex with me." People would call and say, "My boss said he’s going to fire me if you don’t get me some help for drinking."

LYNN SHERR (on camera) Did you have any kind of training in psychology?

MARK HUDSON No, I don’t.

LYNN SHERR Psychiatry?


LYNN SHERR Anything in mental health?

MARK HUDSON Nothing in mental health.

LYNN SHERR (VO) Hudson’s former employer told us he had received adequate training for his job. But Hudson didn’t think so, and he wonders why people trusted him to find the right doctor.

MARK HUDSON You know, I’d ask them if they wanted a male or female. We’d pick the easiest names to say. We just didn’t know anything about these people.

LYNN SHERR (VO) And doctors themselves have to get approval for almost every treatment they prescribe. Psychologist Norman Hering worked as a case manager for one of the largest behavioral health companies for two and a half years. (on camera) Who made the decision about treatment?


LYNN SHERR So you really were in charge?

NORMAN HERING We used to call ourselves God.


NORMAN HERING We ruled over people’s lives.

LYNN SHERR (VO) Hering, like the other insiders we talked to, says he left the company because he thought customers weren’t getting what they paid for.

NORMAN HERING What they sell is, "This is the kind of mental health service you’re going to get" and what they don’t say is that they’re really not going to get what they’re told they’re going to get.

LYNN SHERR (VO) That charge, a kind of bait-and-switch technique, is the centerpiece of a lawsuit brought by Star Vega and other psychologists against Aetna US Healthcare and its subcontractors. The suit charges that in some of its plans, Aetna promised up to 20 to 50 outpatient sessions but didn’t deliver them. That’s because, as this letter shows, Adventist Health, one of the subcontractors, allowed those sessions for crisis intervention only. Adventist also said that most crises can be resolved in about four sessions.

STAR VEGA There’s no such thing. And you can’t say every crisis or any crisis can be resolved in four sessions.

LYNN SHERR (VO) Aetna US Healthcare, in a statement, denied the charges. But according to our group, cutting back on benefits for no medical reason is not unusual. (on camera) Do you believe that people, patients, are being denied access to mental health care right now?

MEN IN GROUP Absolutely.

LYNN SHERR Because of these companies?

MEN IN GROUP Absolutely.

LYNN SHERR Do people routinely get all the benefits they have paid for?

MEN IN GROUP Nope. No. Not at all.

LYNN SHERR (VO) Psychiatrist Greg Barrow (ph) was a medical director of a large managed care company for five years. But he says he left when he became disillusioned about increasing pressure from the corporate level.

GREG BARROW, PSYCHIATRIST Well, sometimes the corporate structure would call down and say, "We have too many people in the hospital this month. I want a detailed description on every single person in the hospital, why they’re there."

LYNN SHERR (on camera) And what did that mean to you?

GREG BARROW Well, that means that they’re starting to twist your arm to try to get people out.

LYNN SHERR Were there patients in those circumstances who were denied the treatment that they really needed because of this?

GREG BARROW Sometimes, yes.

LYNN SHERR (VO) Doctors tell us that when they complain that patients aren’t getting what they paid for or what they need, the doctors themselves are blacklisted. That’s what psychologists Marc and Judith Mann (ph) say happened to them. They ran a day clinic in Vermont where they treated seriously ill mental patients. One, a 19-year-old who had been abused as a child, was diagnosed with major depression.

JUDITH MANN, PSYCHOLOGIST She would lose time. She would black out, and she talked about suicide numerous times a day.

LYNN SHERR (VO) Judith Mann wanted the girl in her clinic for 36 days. The insurance company, Merit Behavioral, said no.

JUDITH MANN They said that she was manipulating us, and they would give her 10 days.

LYNN SHERR (VO) Two weeks later, after Judith Mann says she warned that her patient was getting worse and needed 24-hour care, the patient was rushed to the emergency room when her father found her unconscious from an overdose. (on camera) If her father hadn’t found her, what would have happened?

JUDITH MANN She would have died.

LYNN SHERR (VO) A few months later, another teenage girl from Vermont also attempted suicide after Merit again refused the Manns’ request to put her under 24-hour care.

MARC MANN, PSYCHOLOGIST We felt like these kids’ lives were at stake. It was a matter of life and death on one side, and a matter of spending some money and not money that we would get.

LYNN SHERR (VO) Within 24 hours of complaining to the Vermont Department of Insurance, the Manns received a letter from Merit informing them they had been dropped from Merit’s network and would get no more referrals. (on camera) In other words, no contract, no patients.

MARC MANN That’s true.

LYNN SHERR (VO) Since Merit was the largest mental health insurer in Vermont, the Manns say they had no choice but to close up shop. (on camera) Merit, which is also now owned by Magellan, wouldn’t talk to us about the Manns’ case. And, in fact, not a single representative of the industry we contacted would go on camera to discuss these issues. (VO) Magellan, the largest of these insurers with 58 million subscribers, did send us a written statement, saying managed care organizations have "dramatically improved" peoples’ access to care and that they are a "safeguard" against spiraling health care costs. But critics told us that while costs have come down, the companies are making huge profits off the mentally ill.

JIM WRICH (PH), AUDITOR They have a built-in incentive to deny care. The less care they provide, the greater their profits.

LYNN SHERR (VO) Independent auditor Jim Wrich says, on average, nearly half of every dollar you pay to a managed mental health care company goes not to make you better, but to run the company. Norm Hering says they have targeted an easy prey.

NORMAN HERING The people who need mental health care are the most vulnerable segment of our society, and they’re the ones that are having an empire built on their backs.

CHARLES GIBSON It could be a while before Congress finally acts on health care matters. In the meantime, the managed care insiders, like the ones in our story, who authorize treatment have this advice—keep calling. It’s the squeaky wheel theory. They say the people who called and those who sent complaints in writing got the most attention. And make sure you read and understand your policy to make sure you’re getting the benefits that you deserve.