Corruption at Child and Adolescent Psychiatric Hospitals

I have been discussing the huge rise in diagnoses of pediatric bipolar disorder spurred on by Harvard psychiatrist Joseph Biederman and many others (not to mention the huge rise in diagnoses of bipolar disorder in adults), for a long time in this blog. While there are rare children who present with bipolar disorder, they are few and far between, and they are obviously psychotic. Most children getting the diagnosis now don’t even come close.

Not only have the big pharmaceutical companies benefitted from this, but it has also been a big financial boon for the for-profit psychiatric hospitals that have child and adolescent units, and the corrupt child psychiatrists who admit patients into them.

Of course, critics of psychiatry seem to think that it is only psychiatrists who are subject to greed, corruption, and excess. Not people running investment and banking firms, "alternative" medicine websites, auto repair shops, oil companies, or the for-profit prison system prosecuting a racist and phony war on drugs. Not even Congressmen! Just psychiatrists. 

Wolf of Wall Street, anyone? Nope. It's just the Wolf of Roxbury Drive (also known as Couch Canyon in Beverly Hills).

Anyway, the following graphic displays the incredible upsurge in hospital admissions for this alleged disorder between 1997 and 2010.

Unfortunately, fraudulent practices in child and adolescent psychiatric units are nothing new. Only the phony diagnoses have changed. In the 1980’s and 1990’s, adolescents with behavioral disturbances were kept in hospitals run by National Medical Enterprises (NME) (now Tenet), Charter (now Magellan), and some others for months at a time – until their insurance benefits ran out. They were then abruptly discharged.

Then, as now, parents were assured that their parenting, chaotic lifestyles, and/or marital problems had nothing at all to do with the behavior problems their children were having. After all, if the hospitals told the truth, parents might take their children out of the hospital in protest. 

Back then, the hospital said the culprit behind what we used to call juvenile delinquency was obviously heavy metal music!

I’m not kidding.

The hospital chains were eventually prosecuted by the United States Justice Department for billing fraud and abuse, as well as for making false diagnoses and even for false imprisonment. This is why the firms reorganized and changed their names.  

So they needed a new way to make money fraudulently, and the Biedermans of the world were happy to oblige them with false diagnoses of bipolar disorder and of course ADHD - or both.

One of my former trainees, now a colleague, told an interesting personal anecdote about a hospital with an adolescent unit, although this concerned a young adult patient with borderline personality disorder (BPD). The doctor planned a brief hospitalization for the girl in order to stabilize her, and - following the way I trained him - soon told her he was going to discharge her. Hospitalization tends to make patients with BPD worse rather than better if they are kept there longer than just briefly.

The hospital literally went behind his back and spoke with the girls parents. They told them that they were concerned that my colleague’s discharge plan was premature and was going to harm their daughter!

As soon as my colleague found out about this, he resigned from the hospital staff. I trained him well.

Of course, being an ethical psychiatrist can get you into trouble. The child and adolescent psychiatry department at the University of Tennessee Health Sciences Center, when I first came there in 1992, was heavily into "structural" family therapy and not just drugging children. It's leader, David Pruitt, had been trained by the family systems therapy pioneer Salvador Minuchin himself. 

Many years later, the department opened a new psychiatric ward at LeBonheur Children's Hospital. Only trouble was, our department's philosophy was to only hospitalize children who actually needed to be in the hospital. There were not enough patients to make the unit a viable concern, so the hospital closed it. So now, children who actually need inpatient care are completely at the mercy of the private chains.

Here are some news stories about the NME scandal:

 From Answers.com

The trouble began in 1991 when the Texas attorney general sued NME for alleged overbilling practices at its psychiatric facilities in that state. Allegations of wrongdoing were compounded that year, as individual patients began to accuse NME of having held them in psychiatric facilities against their will, only releasing them when their insurance coverage was exhausted. 

Eventually, more than 130 patient suits would be filed. Further, in the summer of 1992, 19 insurance companies, including Metropolitan Life, Aetna, Prudential, and Mutual of Omaha--some of the biggest providers in the country--filed suit accusing NME of an elaborate program of insurance fraud, beginning as early as 1988, whereby NME admitted tens of thousands of patients who did not need inpatient care, paying illegal kickbacks to referring physicians, fabricating trumped-up diagnoses, and charging exorbitant fees to treat them. At its peak, the cost of the fraud was estimated at $750 million.

 In August 1993, 600 FBI and other federal agents raided NME's headquarters and 11 of its psychiatric facilities, seizing hundreds of documents as part of an investigation into possible criminal misconduct. To his credit, Barbakow insisted on full cooperation with the investigations.

The scandals significantly damaged NME's finances as well as its reputation, as operating profits from the psychiatric division fell from $234 million in 1991 to just $3 million in 1993. As for the cost of putting the past behind, by the end of 1993 settlements with only a few of the insurance companies in question had already topped $125 million. Moreover, after spending nearly $65 million in legal fees, NME pled guilty to felony federal charges in 1994 and agreed to pay $379 million to the Justice Department and the Department of Health and Human Services, the largest settlement in history between the U.S. government and a healthcare provider.

From Uow:

In its first incarnationduring the 1980s and 1990s the company was called National Medical Enterprises (NME). It was involved in a massive scandal defrauding Medicare by buying patients for up to US $2000 each from anyone who could persuade them to come to hospital. The company had contracts with bounty hunters and even pleaded guilty to kidnapping a patients. It bought patients from Canada.

Vast numbers, many of them children did not need hospital admission. The company lied to them and kept them in hospital for the full duration of their insurance all the time providing them with vast amounts of unneeded treatment. All of this was signed for by doctors. The company eventually pleaded guilty to criminal practices in 1994, was forced to sell its specialty hospitals where the fraud occurred, entered into a variety of integrity and compliance agreements and paid in the region of US $1 billion in settlements and compensation to patients

From Business Week  9/12/93:  

On Aug. 26, 600 FBI and other federal agents swooped down on NME's Santa Monica (Calif.) headquarters and 11 of its psychiatric facilities, seizing hundreds of documents. The government hasn't filed charges against NME, but sources close to the investigation say the FBI raid follows a two-year probe into possible criminal misconduct, including widespread overbilling and fraudulent diagnoses to extend patients' hospital stays.

"GOLDEN RULES." Insurers claimed that NME's top management instructed hospital administrators to adopt "intake" goals designed to lure patients into NME hospitals for lengthy and unnecessary treatments. Although the Justice Dept. isn't elaborating, sources say the government is investigating possible illegal marketing and billing practices that are the crux of lawsuits filed last year against NME by 19 insurers, including Prudential, Aetna, and Travelers.

In one internal NME document called "Intake Focus Golden Rules," which was obtained by insurers, hospital administrators declared: "Intake is our most important system--nothing else matters if we don't do that well." To that end, hospital staffers were urged in the document to admit fully half of all patients who came in for an evaluation. Barbakow, a board member since December, 1990, says the document was put out by lower-level managers. NME says it was later recalled when headquarters learned of its existence.

The FBI has also been interviewing former NME patients who are suing the company for false imprisonment. Robert Andrews, a Fort Worth lawyer who is handling 68 such cases, claims NME guide manuals instructed staffers to "push the pain" by convincing parents that if their kids weren't admitted, they might commit suicide. NME says the manual hasn't been used in years.

Dawn McClary is one plaintiff. McClary, now 20, says she spent 20 months from December, 1987, to July, 1989, at NME's Brookhaven Hospital in Dallas after quarreling with her parents about staying out late. After a three-week evaluation, McClary alleges, she was misdiagnosed with a borderline personality disorder and strapped to a wheelchair or her bed for days at a time. McClary's parents were advised she should stay at Brookhaven for five years. But when her insurance policy refused to continue payments, McClary says she was finally released. Total cost to her insurer: $298,000. NME says it's barred by law from discussing patient treatment.