IN THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA

DANIEL S. SHRAGER, M.D.
Plaintiff,

v.

MAGELLAN BEHAVIORAL HEALTH, HIGHMARK BLUE CROSS AND BLUE SHIELD and GREENSPRING HEALTH SERVICES, Defendants.

OPINION
Honorable Joseph M. James

March 10, 2003

Plaintiff, Daniel S. Shrager, M.D., provides psychiatric care and treatment to persons insured by Highmark Blue Cross and Blue Shield. Magellan Behavioral Health and Green Spring Health Services, Inc., are sister corporations that provide utilization review services in connection with the behavioral health component of managed health plans. Dr. Shrager entered into a provider agreement with Green Spring, which required Dr. Shrager to comply with all of Green Spring’s policy and procedures or face termination from the program. The Green Spring policy and procedure at issue is Green Spring’s requirement that it shall have access to patient records as part of quality improvement, subject to appropriate measures to protect patient confidentiality. Dr. Shrager was also supplied with a Provider Handbook that stated that it was Dr. Shrager’s responsibility to obtain the applicable consent from the member regarding release of information.

By letter dated April 24, 2000, Magellan advised Dr. Shrager that their representative would review five treatment records, including three open and two closed cases. Dr. Shrager then communicated his concerns about patient confidentiality to Magellan. Magellan responded to Dr. Shrager with threats of termination from the program. Magellan then terminated Dr. Shrager and began to inform his patients that Highmark would no longer pay for his psychiatric services. Dr. Shrager petitioned the court for an emergency preliminary injunction and by Order of Court dated September 19, 2000, it was determined that he was entitled to an administrative review process. After exhaustion of the administrative process, he was advised of his termination by letter dated April 24, 2001. This court then stayed the termination pending this trial.

By letter dated December 15, 2000, Magellan advised Dr. Shrager that they would accept redacted records that eliminated the name, identification number, address, employer, school, home and work telephone numbers, guardianship information, marital legal status, emergency contacts, signatures, process notes and psychological constructs, including dreams, wishes, fantasies, transferences and counter-transferences.

The parties’ contract contains the following language: Subject to all applicable statutes and regulations governing confidentiality of medical records…Provider agrees to comply with all state and federal confidentiality requirements…Green Spring’s utilization management procedures shall not diminish Providers obligation to render health services consistent with the applicable standard of care.

The primary issue in this case is whether Dr. Shrager was properly terminated for refusing to comply with the April 24, 2000 Magellan request to review five treatment records. Dr. Shrager contends that this refusal to comply with this request can lead to his termination only if the request was in accordance with all laws, regulations and the standard of care. Dr. Shrager testified that he advises patients in the first session that nothing leaves this office and the only exception would be if someone’s life were in danger. Robert L. Pyles, M.D. testifies that the psychiatrist has to be as careful with the records as possible because without confidentiality and “the safety of the frame, the safety of the envelope…no therapy can take place.”

The confidentiality of information involving the psychotherapist-patient relationship receives special protection. In Re “B”, 394 A.2d 419, 425 (Pa. 1978), held that a juvenile court proceeding could not compel the disclosure of a mother’s psychiatric history to determine the disposition of her juvenile son’s case. The plurality of the court stated that in Pennsylvania, an individual’s interest in preventing the disclosure of information revealed in the context of a psychotherapist-patient relationship has deeper roots than the Pennsylvania doctor-patient privilege statute, and that the patient’s right to prevent disclosure of such information is constitutionally based.

The court noted that:

The nature of the psychotherapeutic process is such that disclosure to the therapist of the patient’s most intimate emotions, fears, and fantasies is required…People usually enter psychotherapy because they have deep-seated conflicts and impairments of functioning which limit their ability to work effectively and to enjoy fully satisfying relationships with other people…To alleviate these blocks and conflicts, the therapist asks the patient to abandon ‘rational thought’ and to express thoughts and fears that may never have been revealed to anyone else. Indeed, these innermost thoughts are often so painful, embarrassing or shameful that the patient may never before have allowed himself to acknowledge them. Id at 425-426.

A psychiatrist is subject to a tort action for the unauthorized disclosure of confidential information regarding the patient. Ulizzi v. Trellis, 20 Pa. D&C 4th 300 (C.P. Allegh. 1993). The primary exception to this rule is to protect the health or safety of their persons. Id. At 307-308. The court noted that:

Effective psychotherapy requires confidentiality. Confidentiality is a broad term involving control over client information in both judicial and non-judicial settings. The shield of confidentiality allows patients to speak freely to their psychotherapists. Confidentiality is, therefore, and essential feature of effective psychotherapy. Persons with emotional problems are more likely to seek psychotherapy because they know of the confidential nature of the relationship. During psychotherapy, patients must bare their souls and tell the darkest secrets of their lives. These secrets, if revealed, could ruin the patients’ marriages, cost them employment, or damage their reputations within the community. The confidential communications of psychotherapy patients receive both legal and non-legal protections.

Id. at 306.

The Mental Health Procedures Act of July 9, 1976, P.L. 817, No. 142, gives patients statutory protection from disclosures of their mental health records. 50 P.S. §7111 provides:

All documents concerning persons in treatment shall be kept confidential and, without the person’s written consent, may not be released or their contents disclosed to anyone…

1. All documents concerning persons in treatment shall be kept confidential and, without the person’s written consent, may not be released or their contents disclosed to anyone except:

1. those engaged in providing treatment for the person;

2. the county administrator, pursuant to Section 110;

3. a court in the course of legal proceedings authorized by this act; and

4. pursuant to Federal rules, statutes and regulations governing disclosure of patient information where treatment is undertaken in a Federal agency. In no event, however, shall privileged communications, whether written or oral, be disclosed to anyone without such written consent.

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. In accordance with this public policy, even the request for payment to a payor or co-payor would be an unwarranted disclosure of the fact that the patient has sought psychiatric treatment. However, health coverage from third-party sources brings wider access to mental health services, and it is instructive to turn to the Pennsylvania Code which addresses the confidentiality issues in the context of reimbursement from third-party sources.

55 Pa. Code §5100.34, Consensual release to their parties, provides in relevant part:

1. Access to records, as defined in §5100.33(b) (relating to patient’s access to records and control over release of records) will be granted to persons other than the patient upon written consent of the client/patient. With the consent, copies of excerpts or a summary of a record may be provided to specific persons at the discretion of the director. If copies of excerpts or summaries are provided, a charge may be made against the patient or person receiving the record for the cost of making the copies. The facility may require payment for the copies in advance.

2. When a patient designates a third party as either a payor or co-payor for mental health services, this designation carries with it his consent to release information to representatives of that payor which is necessary to establish reimbursement eligibility, unless otherwise consented to by the patient. Information released to the third-party payors shall be limited to that necessary to establish the claims for which reimbursement is sought.

3. Each facility shall prepare a form for use in the voluntary release of records which shall meet the following requirements:

1. A time limit on its validity which shows starting and ending dates.

2. Identification of the agency or person to whom the records are to be released.

3. A statement of the specific purposes for which the released records are to be used.

4. A statement identifying the specific relevant and timely information to be released.

5. A place for the signature of the client/patient or parent or guardian and the date, following a statement that the person understands the nature of this release.

6. A place for the signature of a staff person obtaining the consent of the client/patient or parent or guardian and the date.

7. A place to record a verbal consent to release of information given be a person physically unable to provide a signature and a place for the signatures of two responsible persons who witnessed that the person understood the nature of the release and freely gave his verbal consent.

8. Indication that the consent is revocable at the written request of the person giving consent, or oral request as in paragraph (7).

4. A mental health facility receiving a request for information from a governmental agency may accept that agency’s release of information form if signed by the patient/client or the person legally responsible for the control of information unless the patient has specifically expressed opposition to that agency receiving information. (Emphasis added).

55 Pa. Code §5100.32, nonconsensual release of information, provides in relevant part:

1. Records concerning persons receiving or having received treatment shall be kept confidential and shall not be released nor their content disclosed without the consent of a person given under §5100.34 (relating to consensual release to their parties), except that relevant portions or summaries may be released or copied as follows:

1. To third party payors, both those operated and financed in whole or in part by any governmental agency and their agents or intermediaries, or those who are identified as payor or co-payor for services and who require information to verify that services were actually provided. Information to be released without consent or court order under this subsection is limited to the staff names, the dates, types and costs of therapies or services, and a short description of the general purpose of each treatment session or service.

2. To those participating in PSRO or Utilization Reviews.

2. Information made available under this Section shall be limited to that information relevant and necessary to the purpose for which the information is sought. The information may not, without the patient’s consent, be released to additional persons or entities, or used for additional purposes. Requests for information and the action taken should be recorded in the patient’s records. (Emphasis added).

The above cited Sections of the Pennsylvania Code are based upon Section 112 of the Mental Health Procedures Act (50 P.S. Section 7112), Section 201 of the Mental Health and Mental Retardation Act of 1966 50 P.S. Section 4201, and Section 1021 of the Public Welfare Code (62 P.S. Section 1021). The Mental Health Procedures Act and the Mental Health and Mental Retardation Act of 1966, set forth the Commonwealth’s policy and procedures regarding the provision of mental health services. 55 Pa. Code Section 5100.3(a). While these provisions are not specifically applicable to private patients, they provide a reasonable and consistent approach for resolving the issues presented in this case.

The court finds that public policy and the standard of care permits third-party payors and those participating in PSRO or Utilization Reviews limited access to a review of psychiatric patients’ records. However, the review of five complete patient-review records requested by Magellan on April 24, 2000, was materially in excess of the limited review contemplated by the drafters of the above Pennsylvania Code Sections. Dr. Shrager’s refusal to comply with this request was justified, and his termination was not warranted.

By letter dated December 15, 2000, Magellan advised Dr. Shrager that they would accept redacted records that eliminated the name, identification number, address, employer, school, home and work telephone numbers, guardianship information, marital legal status, emergency contacts, signatures, process notes and psychological constructs, including dreams, wishes, fantasies, transferences and counter-transferences. The court finds that public policy and the standard of care are consistent with this limited review. The record indicates that this was acceptable to Dr. Shrager but that he would only comply if Magellan would provide him with a specific authorization signed by the patient that substantially complies with the provisions of 55 Pa. Code §5100.34(f).

The remaining issue addressed in this case is which party must secure the specific authorization for the release of records. As noted above, 55 Pa. Code §5100.34(b): states that when a patient designates a third party as either a payor or co-payor for mental health services, this designation carries with it his consent to release information to representatives of that payor which is necessary to establish reimbursement eligibility. It is when the patient elects to have a third party pay for his or her psychiatric treatment that a disclosure of the fact that the patient has sought psychiatric treatment leaves the psychiatric office through submission of a health care providers request for payment for services rendered. This disclosure is often made without the patient’s expressed knowledge or consent. At this time the patient is best able to make an informed choice as to whether he or she is willing to authorize this limited intrusion, self pay for the mental health services or forego the mental health services.

It is the health-care provider who will make the initial disclosure of psychiatric treatment. Section §5100.34(f) states that each facility shall prepare a form for use in the voluntary release of records. When a patient designates a third party, as either a payor or co-payor for mental health services that requires sampling for quality-control purposes, the health-care provider must have the patient sign an authorization which complies with 55 Pa. Case §5100.34(f) and includes the necessary statement which identifies the limited information that will be released. The necessary statement identifying the specific relevant and timely information to be released shall disclose that billing information and will be forwarded to the payor or co-payor together with a sampling of records, for quality-control purposes. The name, identification number, address, employer, school, home and work telephone numbers, guardianship information, marital legal status, emergency contacts, signatures, process notes and psycho ogical constructs, including dreams, wishes, fantasies, transferences and counter-transferences and any and all other information that could possibly identify the patient will all be eliminated.

The court finds that public policy and the standard of care require that the health care provider that accepts patients who utilize third-party payors and those participating in PSRO or Utilization Reviews secure and authorization consistent with §5100.34(f). However, that same public policy and standard of care require that the information released be limited to the information sought by Magellan in their December 15, 2000 letter to Dr. Shrager.

ORDER OF COURT

AND NOW, this 11th day of March 2003, it is ORDERED that:

1. The attempt to terminate Dr. Shrager was improper;

2. Dr. Shrager shall continue as an active participant in the Highmark Blue Cross and Blue Shield programs;

3. Dr. Shrager shall provide redacted records consistent with guidelines set forth in the December 15, 2000 letter from Magellan;

4. Dr. Shrager shall secure, from his insured patients, an authorization consistent with 55 Pa. Code §5100.34(f);

5. Upon compliance with paragraphs Three and Four above, there shall be no restrictions on Dr. Shrager’s participation in the Highmark Blue Cross and Blue Shield programs, including the acceptance of new patients.

By the Court,
Joseph M. James