WASHINGTON -- A federal government review of private psychiatric hospital cases -- most of them teen-agers and young children of military families -- has found that in 64 percent of the cases, patients never should have been admitted or were kept longer than necessary or their hospitals could not justify treatment with their medical records.
The abuses may have cost U.S. taxpayers hundreds of millions of dollars.
The study by the Defense Department of more than 500 patients admitted to psychiatric hospitals around the nation in 1990 under a federal insurance program for military families also found that many of the programs appeared to provide poor or dangerously deficient care. Many of the hospitals charged hundreds of dollars a day.
"You have the inescapable conclusion that this is symptomatic of a mental health industry in which the major incentives are financial," said Rear Adm. Edward Martin, the deputy assistant secretary of defense for professional affairs and quality assurance.
"We were clearly being misused. We had the richest benefits."
The Defense Department's findings were presented to Congress yesterday at a time when many federal officials have already been concluding that the problem of abuse or fraud in medical insurance programs is overwhelming some of the public agencies charged with combating it.
The testimony came during hearings before the House Select Committee on Children, Youth, and Families on reported abuses in the private psychiatric hospital industry.
The hearings centered primarily on the for-profit chains of psychiatric hospitals that grew rapidly in the 1980s and which have marketed heavily to parents of young children and adolescents covered by generous health insurance.
One insurance program providing liberal mental health benefits is the Civilian Health and Medical Program of the Uniformed Services, or Champus, which provides medical insurance to 6 million dependents of military personnel and retirees. Champus often pays for treatment at civilian centers when military hospitals are not available or cannot provide the specialized treatment.
Although the Defense Department study of mental health charges to Champus did not mention specific hospitals or chains, members of the panel and witnesses yesterday accused several chains of overzealous marketing. Among them were National Medical Enterprises, Community Psychiatric Centers and Charter Medical Corp.
Robert L. Trachtenberg, the executive director of the National Association of Private Psychiatric Hospitals, which represents 300 hospitals including the major chains, said the industry deplored abuses that had been disclosed by the press and in state Senate hearings in Texas in recent months. But, he said, the abuses were not widespread or indicative of private psychiatric hospitals nationally.
"There have been serious breaches in ethical practice, and we are determined to support appropriate action to solve these problems," Mr. Trachtenberg said.