In Connecticut, Attorney General Richard Blumenthal has filed a lawsuit in an attempt to stop a large HMO from denying mental health care for its customers. According to Blumenthal, Anthem Blue Cross and Blue Shield of Connecticut and Psych Management Inc. (PMI), the company it hired to manage behavioral health claims for some 600,000 HMO enrollees, arbitrarily denied medically necessary mental health care for vulnerable patients.

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According to Blumenthal's March 2002 report, Anthem should have known that Dr. Richard Benet — a Hartford physician that had a controlling financial interest in PMI — made decisions that "repeatedly" caused denial of medically necessary coverage and care to Anthem. Blumenthal has called on the State Department of Public Health to initiate proceedings to suspend or revoke the license of Dr. Benet to practice medicine on the grounds of "negligent conduct in the practice of medicine." He is also initiating litigation to ensure that Connecticut patients enrolled in managed care plans administered by Anthem and PMI are protected from "arbitrary and unfair coverage determinations."

According to Blumenthal, Anthem must share the blame for the "misdeeds" of PMI and Dr. Benet. "When Anthem subcontracts, it remains responsible for keeping the promises it makes to its enrollees," says Blumenthal. "Any failure by PMI is also ultimately Anthem's failure."

A March 2002 report from Blumenthal says Dr. Benet was eventually forced out of PMI, after Anthem learned that he had been consistently lying about the financial operations of PMI. However, the report also finds that "despite his years of mismanaging PMI into a dangerous deficit, injuring enrollees, and lying to Anthem and PMI Board members, Dr. Benet received a $400,000 golden handshake paid for by Anthem."

Blumenthal says that even more disturbing than the payout to Dr. Benet is that Anthem continues to contract with PMI for its behavioral health program. "Although Dr. Benet is no longer with PMI, the arbitrary coverage caps and guidelines apparently are still in use by PMI and Anthem, conflicting with Anthem's contractual obligations," says Blumenthal. "In fact, Anthem's written promises and assurances, in light of the facts now known, are affirmative misrepresentations to patients concerning the coverage available under its plans, and the circumstances of plan administration."