Assessment and Diagnosis “Under the Gun”
Tsras30
TheInfluenceofPaymentMethod.docxThe Influence of Payment Method
on Psychologists’ Diagnostic Decisions
Regarding Minimally Impaired Clients
Andrew M. Pomerantz and Dan J. Segrist
Department of Psychology
Southern Illinois University Edwardsville
Are psychotherapy clients who pay via health insurance more likely to receive Diagnostic
and Statistical Manual of Mental Disorders (4th ed. [DSM–IV], American
Psychiatric Association, 1994) diagnoses than identical clients who pay out of
pocket? Previous research (Kielbasa, Pomerantz, Krohn, & Sullivan, 2004) indicates
that when psychologists consider a mildly depressed or anxious client, payment
method significantly influences diagnostic decisions. This study extends the scope of
the previous study to include clients whose symptoms are even less severe. Independent
practitioners responded to vignettes of clients whose profiles deliberately included
subclinical impairment and a high level of functioning. Half of the participants
were told that the clients would pay via managed care; the other half were told
that the clients would pay out of pocket. As in the earlier study, payment method had
a highly significant impact on diagnosis such that relative to out-of-pocket clients,
managed care clients were much more likely to be assigned DSM–IV diagnoses. In
addition, a noteworthy percentage of participants assigned diagnoses regardless of
payment method. Ethical implications are discussed.
Keywords: diagnosis, managed care, independent psychotherapy practice, ethics,
payment
A recent study (Kielbasa, Pomerantz, Krohn, & Sullivan, 2004) found that the
method by which a private practice client pays for psychotherapy very significantly
influences both the likelihood that the psychologist will assign a diagnosis
and the specific diagnosis that the psychologist chooses. Specifically, when comETHICS
& BEHAVIOR, 16(3), 253–263
Copyright © 2006, Lawrence Erlbaum Associates, Inc.
Correspondence should be addressed to Andrew M. Pomerantz, Southern Illinois University
Edwardsville, Department of Psychology, Edwardsville IL 62026. E-mail: [email protected]
pared to identical clients paying out of pocket, clients paying via managed care
were much more likely to receive diagnoses and were more likely to receive adjustment
disorder diagnoses in particular. In the Kielbasa et al. (2004) study, the fictional
vignettes to which participants responded included mildly depressed and
anxious clients whose symptoms placed them very near the threshold for Axis 1
disorders in the Diagnostic and Statistical Manual of Mental Disorders (4th ed.
[DSM–IV], American Psychiatric Association [APA], 1994). The purpose of this
study was to replicate the Kielbasa et al. (2004) study using vignettes of clients
whose level of pathology was even less severe. In other words, when considering a
generally high functioning client whose symptoms may fall below the threshold
for any DSM–IV disorder, will psychologists be influenced by payment method
when making diagnostic decisions?
This study, as well as its predecessor (Kielbasa et al., 2004), stems from a growing
body of literature examining the effects of managed care and other forms of
third-party payment on the independent practice of psychology. This literature includes
numerous empirical surveys of practitioners regarding the impact of managed
care on their practices (e.g., Bell, 1999; Murphy, DeBernardo, & Shoemaker,
1998; Phelps, Eisman, & Kohout, 1998; Rothbaum, Bernstein, Haller, Phelps, &
Kohout, 1998), most of which have concluded that the impact has been quite negative.
In addition, the literature includes nonempirical commentaries on the impact
of managed care on psychotherapy (e.g., Karon, 1995; Miller, 1996), most of
which describe managed care as having a detrimental effect. However, diagnosis
has not been the primary focus of these surveys and commentaries. Instead, they
have focused primarily on the therapy process, and to a much more limited extent,
assessment techniques. Very few studies in this field have yielded conclusions regarding
diagnostic issues; these studies have found that independent practitioners
strongly believe that managed care influences psychologists to alter diagnoses to
ensure reimbursement and to protect confidentiality (Murphy et al., 1998) and that
accurate diagnosis in a managed care system is problematic for many mental
health counselors (Danziger & Welfel, 2001). Thus, with the exception of these
isolated studies and the Kielbasa et al. (2004) article, the impact of payment
method on specific diagnostic decisions made by clinicians has not been the focus
of empirical research, particularly for clients who present with mild or subthreshold
symptoms.
Kielbasa et al. (2004) considered numerous interpretations for the finding that
managed care clients are far more likely to receive diagnoses than out-of-pocket
clients, including the common requirement of a diagnosis by managed care companies
to justify reimbursement as described by Ackley (1997), Chambliss (2000),
and Kutchins and Kirk (1997), among others. Peck and Scheffler (2002) similarly
discuss “intentional upcoding,” by which clinicians exaggerate symptoms to increase
the chances or amount of reimbursement from third-party payers (p. 1094).
To the extent that the client falls below the criteria for a mental disorder, the clini-
254 POMERANTZ AND SEGRIST
cian engaging in such practices may be acting in a manner that violates the ethical
code of the APA (2002) or laws concerning insurance fraud. In light of this, this
study specifically sought to examine the impact of payment method on diagnostic
decisions regarding clients whose symptoms may fall below the threshold of a
DSM–IV disorder.
METHOD
Participants
Members of Division 42 (Psychologists in Independent Practice) of the APA were
randomly selected and surveyed via mail. Of the 1,000 members who were initially
surveyed, 91 surveys were returned as undeliverable. Of the remaining 909 surveys
that were presumably delivered, 275 respondents provided usable data, representing
a 30.25% return rate. Mean age of participants was 59.4 years (SD = 9.63) and
mean number of years in private practice was 23.8 (SD = 10.11). Respondents
were primarily male (63%) and White (78%). Most had earned PhD degrees (86%)
as opposed to EdD (6%) or PsyD (7%) degrees, and most specialized in clinical
psychology (74%) as opposed to counseling psychology (20%) or other areas
(4%). Eclectic orientation was most frequently endorsed (57%), followed by cognitive
(18%) and psychodynamic (16%). Most (62%) worked primarily in solo independent
practices, whereas some (22%) worked primarily in group independent
practices.
Materials, Design, and Procedure
Each participant received a survey that included two vignettes, one describing a client
with minimal depressive symptoms and another describing a client with minimal
anxious symptoms. The order of the two vignettes was counterbalanced such that
eachappearedfirstonapproximatelyhalfofthesurveys.Forparticipantsinthemanaged
care condition, both fictional clients were described as paying via managed
care. For participants in the out-of-pocket condition, both fictional clients were described
as paying out of pocket. The Appendix provides an illustration of these vignettes.
Participants also received a cover letter and a brief demographic survey.
Each vignette was intended to portray a client whose presenting problems fell
below the threshold for a DSM-IV diagnosis. They were similar to the vignettes
used in the Kielbasa et al. (2004) study in terms of the type of symptoms described,
but the severity and duration of the symptoms were deliberately subclinical, and
the level of functioning was deliberately high. Specifically, the minimally anxious
client is described as demonstrating some symptoms of generalized anxiety disorder,
but they are insufficient in number and duration (only a “couple of months”
PAYMENT METHOD AND DIAGNOSIS 255
rather than 6 months) to qualify for this diagnosis. Similarly, the minimally depressive
client is described as demonstrating some symptoms of a major depressive episode,
but they are insufficient in number and duration (only a week rather than 2
weeks) to qualify for this diagnosis. In both vignettes, the client was described as
“generally functioning well in all areas of [his/her] life,” and experiencing symptoms
that have “typically passed quickly and have caused only slight impairment.”
These two phrases closely mimic the language found in the “71–80” and “81–90”
range of the Global Assessment of Functioning scale of the DSM-IV. They were intentionally
incorporated into the vignettes to corroborate that, as the minimal
symptoms imply, these clients are subclinically impaired and are functioning at a
relatively high level. In addition, the vignettes included the statements that the clients
can identify “no specific triggers” for their symptoms; this statement was included
as an attempt to ensure that the clients could not qualify for adjustment disorder
diagnoses.
After reading each vignette, which included presenting problem, symptoms,
and some background and demographic information, participants responded to
four questions: (a) “Would you assign this client a DSM–IV diagnosis?” (“yes” and
“no” choices provided), (b) “If you answered yes to the previous question, what
specific diagnosis would you provide?” (blank space, rather than specific choices,
provided), (c) “Assuming that the client does not prematurely terminate, predict
the length of therapy, in number of sessions,” and (d) “What prognosis would you
give this client?” For the final question, participants were provided with a 5-point
Likert-type scale ranging from 1 (extremely poor) to 5 (extremely good).
RESULTS
Tables1and2displaythefrequenciesof“yes”and“no”responses,forbothpayment
conditions, to the item, “Would you assign this client a DSM–IV diagnosis?” As the
tables illustrate, assignment of a diagnosis was more common for managed care clients
than for out-of-pocket clients across both vignettes. The percentage of “yes”
and “no” responses to the managed care condition were used as comparisons for the
out-of-pocket condition in two chi-square tests for goodness of fit (one for each vignette).
For the first vignette (minimally anxious symptoms), χ2(1,N= 270) = 22.29
p < .001, and for the second vignette (minimally depressive symptoms, χ2 (1, N =
272) = 21.02, p < .001, there was a significant association between the method of
payment and whether or not the client would be diagnosed. These highly significant
chi-squarestatisticsindicatethatthelikelihoodofaparticipantassigningadiagnosis
to a minimally impaired client paying via managed care is significantly higher than
the likelihood of a participant assigning a diagnosis to the same client paying out of
pocket. Specifically, based on the odds ratio calculated from data in all four cells of
the chi-square, the client with minimally depressive symptoms paying via managed
256 POMERANTZ AND SEGRIST
care was 3.17 times more likely than an identical client paying out of pocket to be diagnosed
with a DSM disorder. Similarly, based on the odds ratio, the minimally anxious
client paying with managed care was 3.33 times more likely to be diagnosed
with a DSM disorder than an identical client paying out of pocket.
Anecdotally, it is noteworthy that 9.68% of participants in the managed care
condition who responded “yes” to the initial question (“Would you assign this client
a DSM–IV diagnosis?”) included unsolicited written comments about thirdparty
reimbursement. Specifically, these participants inserted comments to the effect
that assigning a diagnosis was a necessity for payment or reimbursement. Examples
of these comments include, “She has not had symptoms long enough to really
warrant the diagnosis but I would need to give her a diagnosis to bill her
HMO,” and “Need a code for insurance.” The appearance of these comments is especially
interesting because there was no request or designated space for comments
on the questionnaire.
The item “If you answered yes to the previous question, what specific diagnosis
would you provide?” generated a wide variety of responses from participants. TaPAYMENT
METHOD AND DIAGNOSIS 257
TABLE 1
Frequencies of “Yes” and “No” Responses to the Item “Would You Assign
This Client a DSM-IV Diagnosis?” by Payment Method Regarding Vignette
No. 1 (Minimally Anxious Client)
Yes No
Frequency % Frequency % Total
Managed care 90 72.0 35 28.0 125
Out of pocket 63 43.4 82 56.6 145
Total 153 117 270
Note. DSM-IV = Diagnostic and Statistical Manual of Mental Disorders (4th ed.; American Psychiatric
Association, 1994).
TABLE 2
Frequencies of “Yes” and “No” Responses to the Item “Would You Assign
This Client a DSM-IV Diagnosis?” by Payment Method Regarding Vignette
No. 2 (Minimally Depressive Client)
Yes No
Frequency % Frequency % Total
Managed care 79 63.7 45 36.3 124
Out of pocket 53 35.8 95 64.2 148
Total 132 140 272
Note. DSM-IV = Diagnostic and Statistical Manual of Mental Disorders (4th ed.; American Psychiatric
Association, 1994).
bles 3 and 4 display the frequencies and percentages of the specific diagnoses provided
for each vignette.
Regarding estimated number of sessions needed to treat each client, participants
predicted a mean of 9.97 sessions (SD = 9.92) for the minimally anxious
client, with a mean prognosis of 4.40 (SD = .65). For the client with minimally
depressive symptoms participants predicated a mean of 10.08 sessions (SD =
10.79) and a prognosis of 4.43 (SD = .62). Independent samples t tests indicated
that portrayed method of payment had no significant effect on estimates
of the duration of therapy or the prognosis of the hypothetical clients. Specifically,
there was no significant difference in the estimated duration of therapy
for the minimally anxious client paying for therapy through managed care,
M = 9.43, SD = 8.04, and the same client paying for therapy out of pocket,
M = 10.38, SD = 11.16; t(229) = –.72, p = .47. In addition, there was no significant
difference in the perceived prognosis of the minimally anxious client paying
through managed care, M = 4.35, SD = .71, and paying out of pocket, M = 4.45, SD
= .60; t(221.36) = –1.22 , p = .23. Similarly there was no significant difference in
the estimated duration of therapy for the client with minimally depressive symptoms
paying for therapy through managed care, M = 10, SD = 9.76, and the same
client paying for therapy out of pocket, M = 10.15, SD = 11.52; t(228) = –.13, p =
.90. There was also no significant difference in the perceived prognosis of the client
with minimally depressive symptoms paying through managed care, M = 4.41,
SD = .65, and paying out of pocket, M = 4.45, SD = .60; t(256) = –.58, p = .57.
258 POMERANTZ AND SEGRIST
TABLE 3
Frequencies and Percentages of DSM-IV-TR Diagnoses Assigned
to Vignette No. 1 (Minimally Anxious)
DSM-IV Diagnosis Frequency %
Adjustment disorder with anxiety 46 31.1
Anxiety NOS 41 27.7
Generalized anxiety disorder 22 14.9
Adjustment disorder with mixed anxiety and depression 20 13.5
Adjustment disorder NOS 5 3.4
Diagnosis deferred 5 3.4
Depression NOS 4 2.7
Dysthymic disorder 2 1.4
Major depression, recurrent, moderate 1 .7
Panic disorder with agoraphobia 1 .7
V code 1 .7
Note. DSM-IV = Diagnostic and Statistical Manual of Mental Disorders (4th ed.; American Psychiatric
Association, 1994); DSM-IV-TR = DSM-IV (Text Rev., 2000); NOS = not otherwise specified.
Sample (n = 148) composed of those participants who responded “Yes” to the question, “Would you assign
this client a DSM-IV diagnosis?”
It is also notable that, regardless of payment method, a sizable number of participants
chose to assign diagnoses to clients whose symptoms and level of functioning
suggested that no diagnosis was applicable. Altogether, 56% and 48% of the
participants assigned a diagnosis to the minimally anxious client and minimally
depressive client, respectively.
DISCUSSION
Results of this study suggest that, even when the client seeking services does not
meet criteria for a mental disorder, the method by which the client pays for psychological
services has a very strong influence on the diagnostic decisions of the psychologist
providing the services. Specifically, these results indicate that, relative to
identical clients who pay out of pocket, clients who pay via managed care are far
more likely to be diagnosed with a DSM–IV disorder. This finding was previously
established with fictional clients whose symptoms were more serious (Kielbasa et
al., 2004), but results of this study confirm that the finding holds true even when
the clients’ issues fall below diagnosable levels. The finding that clients paying via
managed care are more likely to receive diagnoses than those paying out of pocket
is illustrated not only by the significant chi-square statistics reported earlier, but
also by the odds ratio, which indicates that clients paying via managed care are
PAYMENT METHOD AND DIAGNOSIS 259
TABLE 4
Frequencies (Percentages) of DSM-IV-TR Diagnoses Assigned to Vignette
No. 2 (Minimally Depressive)
DSM-IV-TR Diagnosis Frequency %
Adjustment disorder with depression 38 29.7
Depression NOS 37 28.9
Dysthymic disorder 20 15.6
Adjustment disorder with mixed anxiety and depression 10 7.8
Diagnosis deferred 10 7.8
Adjustment disorder NOS 5 3.9
Major depression, single episode, mild 3 2.3
Adjustment disorder mixed disturbance of emotion and conduct 1 .8
Anxiety NOS 1 .8
Generalized anxiety disorder 1 .8
Major depression, recurrent, moderate 1 .8
V code 1 .8
Note. DSM-IV = Diagnostic and Statistical Manual of Mental Disorders (4th ed.; American Psychiatric
Association, 1994); DSM-IV-TR = DSM-IV (Text Rev., 2000); NOS = not otherwise specified.
Sample (n = 128) composed of those participants who responded “Yes” to the question, “Would you assign
this client a DSM-IV diagnosis”?
slightly over three times more likely to be assigned a DSM–IV diagnosis than identical
clients paying out of pocket.
Kielbasa et al. (2004) offered the interpretation that the policy of many managed
care companies to require a diagnosis for payment (Ackley, 1997; Chambliss,
2000; Kutchins & Kirk, 1997) was a likely reason for the finding that payment
method influences diagnostic decision making. The same interpretation continues
to apply to these results. In fact, these results (both empirical and anecdotal) suggest
that psychologists may upcode clients whose symptoms are subclinical to secure
payment when those clients pay via managed care but not when they pay out
of pocket. Kielbasa et al. also suggested that diagnosing a client without merit can
have various negative consequences: an unwarranted view of the self as mentally
ill (Ackley, 1997; Caplan, 1995); the presence of a mental disorder on the client’s
medical record, the confidentiality of which is not entirely in the hands of the clinician
(Kutchins & Kirk, 1997); or an altered course of treatment (Beutler & Harwood,
2000; Nathan & Gorman, 2002). All of these negative consequences are especially
applicable to a situation in which a client receives an unwarranted
diagnosis. In addition, Kielbasa et al. described the importance of this finding for
the clinicians themselves, whose behavior may be unethical (APA, 2002) or illegal
(per insurance fraud regulations), and for society at large, which will pay higher insurance
rates to cover unwarranted claims. Both of these outcomes are particularly
salient in the context of the findings of this study, which extend the findings of the
Kielbasa et al. study to subclinical clients.
Although the primary intent of this study was to compare responses to managed
care and out-of-pocket clients, it is striking that, regardless of payment method, approximately
half of the participants chose to assign diagnoses to these subclinical
clients. This result suggests that clinicians may tend to overestimate clients’symptoms
or apply DSM–IV criteria quite liberally in all payment circumstances, and
that the presence of a managed care party in the therapy situation simply exacerbates
this tendency. The tendency is troubling, and its causes are not entirely clear.
Perhaps psychologists themselves generally view diagnosis as a prerequisite for
treatment; perhaps the increasing presence and influence of managed care in the
professional lives of psychologists (e.g., Murphy et al., 1998) has contributed to
this view. In any case, this issue is worthy of further study.
As in the Kielbasa et al. (2004) study, the importance of informed consent is
a primary ethical implication of the results of this study. The APA ethics code
(2002) clearly emphasizes the necessity of informed consent for clinical services
(e.g., standards 3.10 [a], 10.01 [a]). Numerous authors have debated the specific
content to be included in an adequate informed consent procedure (e.g., Appelbaum,
1993; Newman & Bricklin, 1991; Pope & Vasquez, 1998), but it seems
reasonable to consider the effect of payment method on diagnostic decisions
among the essential points to include, especially if the client’s symptoms are as
minimal as those included in this study. These and previous (e.g., Kielbasa et al.,
260 POMERANTZ AND SEGRIST
2004) findings suggest that, to obtain truly informed consent, psychologists
should advise clients that their method of payment might influence the diagnostic
decisions made about them.
This study focuses only on what psychologists decide in terms of diagnosis.
One potential avenue for future studies is an exploration of how psychologists
communicate their diagnostic decisions to clients. The impact of the diagnosis on
clients may vary greatly as a result of the manner and extent to which psychologists
share, explain, or discuss it with them.
Several limitations apply to the results and conclusions of this study. It incorporated
brief vignettes with limited information rather than more detailed vignettes
or actual clients. The fictional clients were described as presenting with minimal
symptoms and as relatively high functioning; it is unclear how common such
subclinical presentations are in the practices of most independent practice psychologists.
Respondents included a subset of the membership of Division 42, and
the extent to which respondents are representative of the division or the profession
as a whole is unclear. In spite of these limitations, the results of this study confirm
and extend the results of previous research (Kielbasa et al., 2004) demonstrating
the importance of payment method in the diagnostic decisions of psychologists in
independent practice.
ACKNOWLEDGMENTS
This research was conducted with the support of a Dean’s Grant for Research
Enhancement from the School of Education at Southern Illinois University
Edwardsville.
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APPENDIX
Sample Vignettes
Vignette #1
A 35-year-old married man in good physical health is a father of two children. He
generally functions well in all areas of his life; however, for the past couple of
months he has been experiencing increased anxiety and worry. He cannot identify
any stressful events that may have triggered this worry. Specifically, he has experienced
mild anxiety about work; temporary difficulty concentrating; and occasional
difficulty sleeping. These symptoms have typically passed quickly and have
caused only slight impairment.
This person has come to you today seeking therapy. He intends to pay for therapy
[through his managed care plan/out of pocket].
Vignette #2
A 55-year-old married woman in good physical health is a mother of two children.
She generally functions well in all areas of her life; however, for the past week she
262 POMERANTZ AND SEGRIST
has been experiencing increased sadness. She cannot identify any stressful events
that may have triggered this sadness. Specifically, she has experienced a depressed
mood; decreased interest in her activities and hobbies; and some difficulty sleeping.
These symptoms typically last for a short period of time, and have caused only
slight impairment.
This person has come to you today seeking therapy. She intends to pay for therapy
[through her managed care plan/out of pocket].
