Under threat of court action, the Blue Cross-Blue Shield Federal Employee Program, which insures 600,000 federal workers in the Washington area and 5.9 million nationwide, has agreed to delete details of psychiatric treatment from its mental health report form.

The insurance company's decision followed complaints by some mental patients that detailed form, in use here since last July 1, violated doctor-patient confidentiality with three questions that requested details about the method of treatment, symptoms of illness, distress suffered by the patient and effect of the illness on the patient's social, family and work life.

A group of the disgruntled mental health patients threatened to sue Blue Cross-Blue Shield if the company did not drop the three questions from its report form that requested what the group said were unnecessary and offensive details.

Blue Cross-Blue Shield switched to the new form last year after previously using a form that only described mental health treatment in terms of category, not method and duration.

But Richard Luehrs, senior director of operations for the company, said when the change was msde that the old form did not provide adequate information to clearly establish whether the patient's claims for payment were legitimate.

Paul R. Friedman, managing attorney of the Mental Health Law Project, which has been representing patients in their complaint against Blue Cross-Blue Shield, said the required details were not necessary for the company to determine if it should pay a claim.

"Blue Cross was more or less on a fishing expedition," said Friedman. "There was the ever-present danger that records of mental health treatment would somehow be used against the patient.

"Our clients maintain that there must be a firm commitment to confidentiality for basic psychiatric therapy to work," Friedman added. "A patient should feel free to express his weirdest and most intimate thoughts in the therapy room. The moment he knows his thought may be made available to people outside the therapy room, this valuable information about the patient dries up."

Since mental health report forms were filed at the Civil Service Commission with the rest of the patient's employment records, Friedman said there was always the chance that mental health information could be used against the patient.

James Gillman, director of service for the federal employee program, said the insurer changed its policy recently and decided to modify its mental health report form because "we are also concerned about confidentiality.

"Some of our subscribers had made it known to us that three questions on the form made them a little uncomfortable," said Gillman. "We have agreed to delete those questions."

What the revised form will mean, Gillman said, is that some claims will be paid immediately, while others will not be paid until the insurance company writes the patient for extensive details about his treatment.

Gillman predicted that only about 10 per cent of the patients seeking payment for mental health treatment will have to supply the additional information. And because of the increased paper work, he said, payment of some claims could be delayed for several weeks or even months.