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Ethical Rehabilitation Counseling in a Managed-Care Environment.

Ethical practice in the field of vocational rehabilitation (VR) has been an issue since the beginnings of the profession (Brubaker, 1977; Obermann, 1971, 1973). However, with the arrival of managed care organizations (MCOs) and their direct and pervasive influence on insurance-based VR practice, ethical problems are affecting service delivery (Ashbaugh and Smith, 1996; Birenbaum, 1995; HPP, 1997; Kohlenberg, 1994). For example, in the Ohio and California workers' compensation systems, MCO-type cost-containment practices have been adopted (HPP, 1997; Kohlenberg, 1994).

This article looks at ethical concerns that the profession has historically faced, their relationship to the unified code of ethics, and current professional rehabilitation practice within a MCO environment. It discusses MCO cost-containment strategies and implications for practice.

Historical Perspectives

In the 1970's, the primary ethical problem facing VR practice focused on a relationship triad. This triad comprised the client (accepted, then and now, as the person receiving VR services), the rehabilitation counselor (RC), and the agency (i.e., the counselor's employer) through which services would be delivered. Two central questions were: (1) Is a rehabilitation counselor's advocacy role limited by the employee-employer relationship? (2) Is there an ethical compromise that negatively affects the counselor's obligation to the client/consumer? Geist, Curin, Prestridge and Schelb (1973) held that these concerns arose out of the relationship between the agency and the counselor and the relationship's effect on the advocacy role of the counselor on behalf of the consumer. However, by the end of the decade, new concerns developed. With the rise of proprietary rehabilitation, the traditional relationships between the consumer, agency/employer and RC had become more complicated. The addition of new sources of payment for services, and the potential for profit in VR service provision, created new ethical problems for the RC in private practice (Cottone, 1982, 1985; Pape & Klien, 1986; Sher, 1979).

In the 1980's, ethical issues were raised for RCs regarding the identity of their clients. Were they the consumers or the payers of service? Workers' compensation and third-party payers (e.g., insurance companies) fueled the demand for services to injured workers and the dominance of private, for-profit rehabilitation companies in service provision. Ethical problems arose in plan development. Should the consumer's needs or the payer's willingness to pay determine service provision? Were RCs becoming arbitrators for third-party payers to resolve legal issues surrounding injury? Nadolsky (1986) offered the following:
 As private rehabilitation achieves visibility and becomes a dominant force
 in the rehabilitation movement, the general public will begin to identity
 the entire field of rehabilitation as a service designed to assist
 organizations in resolving the legal issues associated with accidental or
 industrial injury. Rehabilitation will no longer be viewed as a
 people-oriented field, whose services are designed to assist in restoring
 the productive capacity of people with disabilities. (p. 6)

By the 1990's, ethical issues in both the public and private VR sectors focused on consumer decision making, access to services, and choice in the VR process (Fry, 1995). MCOs, as part of the healthcare delivery system and as payers of VR services, have become the concern of many authors because MCOs limit consumer choice and access to needed services (Ashbaugh & Smith, 1996; Birenbaum, 1995; HPP, 1997; Kohlenberg, 1994; Rother, 1996; Thomas, 1994).

As powerful MCOs cap costs and limit services, RCs continue to need a reliable guideline for ethical behavior. The Code of Professional Ethics for Rehabilitation Counselors (Code, 1988; Commission, 1995) retains critical importance as the service delivery and payer systems undergo historic changes.

The Code of Professional Ethics

Early in the history of rehabilitation practice and the development of its unified ethical code (Tarvydas & Pape, 1998), the relationship between moral codes, professional ethics, and law was addressed (Obermann, 1971, 1973; Geist et al., 1973). Obermann, as a drafter of the National Rehabilitation Counseling Association's (NRCA) first code of ethics, proposed that moral codes (personal ethics), professional responsibility (codes of ethics), and legal requirements (statutory laws) be rank ordered. This ranking was based on two premises. First, because laws adapt to an evolving society, adaptation should come from the governed and not be imposed by the governors. Second, this principle of change originating from the governed applies as well to the relationship between professionals and their professional society. Obermann concludes, personal moral codes form the basis of professional codes of ethics. Each is then the basis of codified law.

Geist et al., (1973), during the development of the rehabilitation code of ethics, presented the following succinct relationships:

1. Moral principles take precedence, but should be scrupulously exposed to the test of consensus; namely, professional responsibility.

2. Professional responsibility (code of ethics) should act as a sounding board for personal moral principles and should take precedence over legal requirements as professional competency take [sic] precedence over common opinion. Professional responsibly itself should be exposed to the test of consensus.

3. Statutory laws, subject to change according to an evolving civilization (expressed through moral principles and professional responsibility), should act as a sounding board for these principles of morality and professional responsibility. (p. 19)

In the increasingly complex world of MCO service delivery, the funding of VR services may cause RCs to make case management decisions that are more in line with MCO payment policy rather than with consumer choice or need (Kohlenberg, 1994). For example, an insurance carrier that is a frequent referral source may tell the RC that services over and above established protocols including case management time will not likely be approved. Thus, the carrier limits the consumer choice and the potential success of rehabilitation services. By following the carrier's directions, legally the RC may be acting appropriately. However, the ethical problem lies in the charge to act morally and ethically as well.

Greenspan and Negron (1994) identify unethical behavior as part of the larger domain of unprofessional behavior. They affirm two large categories of unprofessional behavior as "Unprofessional but Probably Ethical" and "Unprofessional and Probably Unethical." The first category is divided into "Ethical and Probably OK" and "Ethical and Probably not OK." The second category divides into "Unethical, but Probably Legal" and "Unethical and Illegal." Therefore, there is a "seriousness continuum" ranging from "Ethical and Probably OK" to "Unethical and Illegal." For example, if a RC acts casually and informally in clinical relationships, the RC might be viewed as demonstrating unprofessional behavior, but such behavior would not be considered unethical. However, if a RC were to be convicted of a felony involving a consumer (e.g., stealing a consumer's property), then the RC would be acting unprofessionally, unethically, and illegally.

With the rise of the influence and power of the MCO and with the increasing impact of the choices they make to pay or not pay for VR services, Greenspan's and Negron's (1994) concept of the "Unethical but Probably Legal" becomes of critical importance to the insurance-based RC. The constantly evolving ways MCOs control costs and services often place the RC in the position of choosing legal behavior vs. ethical action. For example, in a system where total costs for VR services are capped (e.g., California), purchases of services limit available money for the reimbursement of case management time, thus reducing income for the proprietary RC (Kohlenberg, 1994).

MCO Cost-Containment Practices

It is useful in the discussion of ethical problems to understand consumer-choice issues in MCO healthcare delivery and cost-cutting methods. MCOs have evolved from community-based plans that provide prepaid health care into large, for-profit plans that lower healthcare costs and increase profit. Consumers are advocating for aggressive protection measures against these MCO methods. Though VR services can help resolve legal issues arising from the accidental or industrial injury (Nadolsky, 1986), they also restore or provide vocational functioning and, thus, independence to a person with a disability. MCO methods may limit VR services to prescribed protocols or capped total costs. These methods limit the carrier's exposure, thus increasing profits, but do little to achieve total rehabilitation (Wright, 1980). In analyzing this problem, it is useful to look at the ways MCOs reduce costs.

Rother (1996) identifies an evolution of three generations of MCO operations and consumer advocate concerns. First, organizations lowered costs by delimiting the treatments covered by the plan or by narrowing the definition of "necessary" as it is related to medical treatment. Thus, the MCOs limited consumer choice. However, some MCOs have methods for the resolution of "denial-of-treatment" disputes and concerns for the potential of undertreatment (i.e., second opinions).

The next effort focused on the practices of risk-selection and marketing (Rother, 1996). MCOs marketed to and selected into their plan persons who had lower risk. These persons were healthier, younger, and used healthcare services less frequently than higher risk persons. Rother argues that MCOs more easily make a profit by selecting healthier people to serve than by improving management of the delivery system. Thus, some managed care plans segment the market and recruit the youngest and healthiest people. These plans enroll new members who have lower medical expenses; they "disenroll" members who have high-cost medical expenses. The result is that the plans do not serve the persons who need them the most. Moreover, the good management practices of MCOs fail to reach the overall system, which could benefit from some of the practices (e.g., budgetary restraints).

Rother (1996) identifies a third generation of organizational efforts. Risk in the insurance sense ultimately means policy/plan utilization and expense. MCOs have shifted the full financial risk of treatment to physicians, a practice termed physician capitation. In this payment method, physicians receive a fixed monthly amount per plan member treated. Then physicians pay for all costs of treatment (i.e, tests, specialist referrals, and hospitalizations) from the monthly payment. Any remaining funds cover the physicians' salary, overhead, and partnership profit. The conflict that arises is between payment for treatment (wanted vs. necessary) and local group practice salaries and profit.

In most MCO cost-containment scenarios, VR services can take on the added dimension of serving the MCO's agenda, as well as providing services to the consumer (HPP, 1997; Kohlenberg, 1994). The capping of VR services within workers' compensation systems is analogous to physician capping. Ethical problems for the RC are increasing as MCOs and MCO methods adopted by other types of organizations (e.g. Ohio and California Workers' Compensation Systems) prevail in the insurance-based payment system.

Vocational Rehabilitation Issues

The rehabilitation-counseling problem in a MCO environment is in the conflict between the Code of Professional Ethics for Rehabilitation Counselors (1995) and the payer system that hires RCs as employees or contracts with them as independent service providers. It has long been identified that three sources of potential conflicts are present: (a) lack of RC ability to impose organizational ethical standards, (b) lack of RC independence, and (c) lack of recourse for ethical violations (Geist et al., 1973). These conflicts have existed historically and continue to exist in present day professional relationships in most rehabilitation settings and MCOs.

Lack of the ability to impose ethical standards. RCs lack the ability to impose ethical standards on their employers or the MCOs that contract with them for VR services. Agency/employers' behavior standards are usually reactive responses to issues raised by the environment in which the organization operates. They serve the purpose of resolving the conflict in the organization's favor with minimal use of resources. Whether in a public agency or working for an insurance carrier/MCO, RCs have limited choices in dealing with an organization's unethical practice. They can demand ethical conduct; they can work from within to modify aberrant practices; or they can quit or refuse to accept the referred work. Still, the balance of power rests with the agency or the MCO.

Lack of professional independence. RCs lack professional independence within an agency or within the contractual relationship with the insurance carrier/MCO. Too often, the organization perceives the RC's talents as facilitating the organization's needs. The organization rarely, if at all, sees itself as the conduit for the RC to achieve the appropriate therapeutic relationship with the consumer. Fundamentally, the MCO is organized to serve the healthcare consumer in an attempt to get needed medical and rehabilitative services. However, because profit margins in the healthcare industry are narrowing, often the MCO's focus is more on survival and less on the needs of the consumer. In such a situation, the RCs' role shifts to assisting the MCO in its self-survive. RCs can lose their professional independence in the conflict between the consumer's needs and the MCO's need to survive.

Lack of available means for recourse. RCs and consumers lack recourse for the resolution of unethical behavior. One can go to the expense of court action, but a non-judicial means for conflict resolution (e.g., an independent, internal, organizationally-based means) is not institutionalized in the public or insurance-based VR system. Thus, the RC or consumer often bears the burden of the expense of the effort.

Implications for Practice

What are RCs to do in professional relationships or settings that do not empower them to make policy or bring about action? Foremost, RCs need to do no harm (nonmaleficence), and through effective knowledge of alternative options and rules of professional conduct, aid their consumers to further the consumer's interests (beneficence).

Thomas (1994) identified nonmaleficence and beneficence as principles that should guide professional actions. The Code of Professional Ethics for Rehabilitation Counselors (Commission, 1995) provides ways that these principles can be implemented. Rule 1.1 provides that a RC thoroughly discusses with the consumer the legal limits of VR service provision (Commission, 1995). Actively practicing this rule avoids misunderstandings and potential conflicts. Rule 1.4 provides that RCs will not engage in any act or omission that is dishonest, deceitful or fraudulent (Commission, 1995). Further, RCs will not allow financial gain to interfere with sound professional practice. Actively practicing this rule may avoid malfeasance concerns and legal actions. Rule 2.8 provides for the joint development between the RC and consumer of the rehabilitation plan (Commission, 1995). Consumer input at this stage of the service delivery is critical for ethical plan development.

By following ethical rules of professional conduct, RCs may avoid consumer misunderstandings of the limits of service delivery and the types of services that are available. Further, the RC is likely to be on solid legal ground when exposed to ethical problems.

RCs who are also familiar with public-sector alternative services can aid the consumer in selection. Knowledge of community-based programs may help with the gaps in MCO-funded services.

However, although RCs are able to explain the limits of service, they do not necessarily agree with the limits as set. To resolve this conflict, Rule 1.3 provides a possible course of action available to RCs.
 R1.3 Rehabilitation Counselors will be alert to legal parameters relevant
 to their practices and to disparities between legally mandated ethical and
 professional standards and the Code. Where such disparities exists,
 Rehabilitation Counselors will follow the legal mandates and will formally
 communicate any disparities to the appropriate committee on professional
 ethics. In the absence of legal guidelines, the Code is ethically binding
 (Commission, 1995).

The ethical conflict for RCs lies in the need to act legally, morally, and ethically. Tarvydas and Cottone (1991) identify a four-level model of ethical practice. This model reflects the complexity of professional practice that RCs face today. The four interactive levels of "social influence and ethical practice" are: (a) the clinical counseling level, (b) the clinical multidisciplinary level, (c) the institutional/agency level, and (d) the societal resources/policy level. Tarvydas and Cottone challenge RCs to develop and use more effective strategies and to practice across all four of these levels effectively, thus widening the social context in which they achieve ethical practice.


Clearly, ethical conflicts that currently challenge insurance-based VR practice are not new to the profession. RCs' responses to the problems caused by MCO methods of operation are still guided by the unified code of ethics and the four-level model of ethical practice (Tarvydas & Cottone, 1991). The complexity of practice in a MCO environment demands a well-developed and relevant ethical model and professional response.

RCs can practice ethically in a MCO environment. RCs need not compromise their ethics in order to practice in today's difficult payment system. However, RCs do have to remember that although MCOs are in business to make a profit, the profit motive need not disenfranchise the RC's traditional roles. RCs do, though, need to speak from a business perspective in order to be heard by the MCO. Several action steps can be useful in solving the ethical practice problems that RCs face.

1. Become knowledgeable in the ways VR services can be used to lower costs and yet provide ethical service within the claim. Advocate within the MCO for VR's role in service provision. Becoming a partner in the management of the case does not mean compromising ethics.

2. Know, understand, and be able to articulate the parameters of VR service delivery within the MCO systems from which referrals are accepted.

3. Clearly and fully discuss the MCO's limits of service provision with the consumer at the beginning of the professional relationship.

4. Create in advance a readily available list of options for additional or alternative services that are useful to the consumer when his or her needs exceed the capped limits of the MCO. Facilitate linkage of the consumer with the additional services.

5. Advocate with professional associations and challenge them to take a more active role with the healthcare industry to increase the effectiveness of the traditional RC advocacy role.

6. Above all do no harm and, by understanding additional and alternative VR options, aid consumers to further their interests.

MCOs have radically affected the healthcare environment and the service delivery options available to RCs practicing in an insurance-based rehabilitation. This situation does provide new ethical problems for the RC, but by relying on established ethical principles, the RC can still be effective and provide ethical service.


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Larry G. Kontosh The Ohio State University

Larry G. Kontosh, 2767 Kensington Place, east Columbus, Oh 43214, E-mail:
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Author:Kontosh, Larry G.
Publication:The Journal of Rehabilitation
Date:Apr 1, 2000
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