Managing managed care: How addiction treatment centers are affected by insurance companies and managed care policies


PHOTO: LIVENGRIN / Rick Pine, president and CEO of Livengrin, has been with the Bensalem addiction recovery center since the late 80s.

Today, the Livengrin Foundation for Recovery manages treatment for people suffering from all kinds of addictions. But when the institution opened in Bensalem 50 years ago, that wasn’t the case.

“Virtually all of the treatment centers at that time were alcohol treatments centers,” said Rick Pine, president and CEO of Livengrin. “Drug addicts were often in psychiatric wards or private sanitariums.”

Pine wasn’t at this particular facility when it opened, but he spent decades in the field, albeit in non-medical capacities, before arriving here in the late ‘80s. Over that time, he’s seen virtually every aspect of addiction treatment change, from average patient profiles to facilities and payment options and, of course, the nature of treatment itself.

As Livengrin celebrates its golden anniversary this fall with a series of public events, Pine spoke with the Midweek Wire about how those changes came about, and the roles insurance companies and managed care systems played in them.

Anyone with health insurance is likely familiar with the practice, even if they don’t know the name. It refers to the techniques used by an insurance company or third-party organization to control the costs of, and hopefully enhance, any services the insurance covers.

It usually means setting predetermined parameters on care and requiring caregivers to justify their expenses. That’s often at odds with substance abuse treatment programs, which are evolving and aren’t one-size-fits-all.

“Managed care was developed to ensure the least restrictive and shortest amount of treatment was administered first, if at all,” explained Pine. “We want to provide the best and most appropriate treatment. It’s different for every person.”

It’s especially adversarial to an industry that’s arguably seen major changes every 15 years or so.

Before the early ‘70s, the typical treatment center patient was a 45-year-old unemployed male alcoholic. The few centers like Livengrin that existed would accept drug addicts but not list it as their primary addiction.

“Understanding and acceptance of drug addiction was not there at all,” said Pine.

Alcoholism was recognized in the ‘50s as a diagnosable disease by the American Medical Association, but even by 1966, when Livengrin opened, it still carried a heavy stigma.

Patients were often destitute, having already lost their jobs, homes or families before getting help. They were often treated by fellow recovering alcoholics in “cookie-cutter” 28-day, 12-step-style programs.

“(Staff members) were passing on the principles they had acquired, where they had a captive audience,” sad Pine. “It would hopefully give them a good start and get them to their first AA meeting.”

That began to change in the early ‘70s, when Blue Cross in Philadelphia became one of the first insurance providers in the nation to cover addiction treatment. An industry boom came along as more companies followed suit, with major hospital corporations and for-profit groups opening treatment centers “left and right,” according to Pine.

It was also around the time that managed care first came to prominence, following the Managed Care Act passed by Congress in 1973, But at the time, no one thought it would ever apply to addiction treatment.

“As hospitals felt the pinch from that, they realized there was a goldmine in behavioral health,” said Pine. “It created a lot of competition.”

Most of that competition was healthy, forcing innovation that brought about individualized

treatment programs, varied lengths of inpatient stay and other hallmarks of the profession today. But the lack of oversight also attracted business with for-profit, rather than mission-driven, motives, and not all of them were reputable.

When managed care organizations began examining addiction treatment centers, they did much to quash the relatively few bad actors. But, they also hampered the profession overall.

“Insurance companies felt like they were losing too much money. Their one goal was to save money, but it was an across-the-board move rather than a highly intensified, individual move,” said Pine.

Pennsylvania, for its part, passed Act 106 in 1989, which, he said, essentially forced the managed care industry to recognize the professional recommendations or licensed physicians and practitioners “rather than one of their folks on the telephone telling them what to do.”

Even still, the trend caused an “outflux” of care centers in the mid-’90s, with four national corporations, and many smaller centers, shutting down.

However, with the rise of the internet early this century allowing more information on addiction and treatment to be disseminated, and a lawsuit last decade forcing managed care companies to adhere to Act 106, treatment facilities have been growing again.

Today, places like Livengrin are multidisciplinary centers with counselors, nurses, therapists and others working with any given patient battling any kind of substance.

“The professionalism and accountability has changed drastically for what we do and how we do it,” said Pine.

The relationship between treatment centers and managed care has gotten better, he admits, even if it’s taken “external pressure” like Act 106 and the ensuing lawsuit. Pine credits Deborah Beck, executive director of the Drug and Alcohol Service Providers Organization of Pennsylvania, and local state Rep. Gene DiGirolamo in particular for their work in creating legislation that help treatment centers.

As for managed care organizations, he said, “They have not gone willingly. Nor have we gone willingly.”

For information on addiction recovery, Livengrin or upcoming events, visit

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s