It is tempting to try to impugn the very concepts of 'reality testing' and 'reality contact' - by asserting that the pictures associated with such notions are themselves epistemically misleading. But in doing so one mistakes the unimpeachable grammar (use) of a term with the virtue or otherwise of the various uses to which a picture of that term's use can be put.
'Reality testing': when we hear this psychiatric term we may be inclined to think of hypothesis testing. We might be inclined to think that, underlying the very idea of reality testing is the idea of taking a belief or an hypothesis or a supposition or an idea and deploying hopefully reliable procedures to test whether it obtains in fact. More specifically we might be inclined to imagine that what the user of the concept of 'poor reality testing' is imagining, simply in virtue of using that concept, is someone who has an idea 'in their head' which they fail to true up against 'external reality'. We might, even more strongly, imagine that such pieces of imagining, on the part of the user of the concept of poor reality testing, are constitutive of the very meaning of the term. Similarly we may think that the user of the concept of 'reality contact' has started to imagine that our minds could become detached from the world yet remain minds for all of that. The person in a 'psychotic retreat' then becomes someone who has thoughts all right, it's just that his thoughts are no longer congruent with the facts. And we may rightly be very suspicious of the cogency of such an idea as to what psychotic unworlding consists in.
What I'm registering is my belief that the error here lies not with the psychiatrist but with the philosopher who takes herself to be offering a critique of the very ideas of reality testing and reality contact. For it has always been the case that competent speakers of a language - including a psychiatric language - will be perfectly capable of misleading themselves as to what they mean by the terms they use. We may all be misled by, or mislead ourselves with our, pictures. But what makes for the meaning of our clinical terms is not the use of the pictures they inspire but the practical uses of the terms in the midst of clinical practice. And when we look at the uses of the notions of 'reality testing' and 'reality contact' we find something which is often rather far from what the pictures seem to suggest.
With poor reality testing what we find is not a failure to test inner thoughts against outer reality to see if they are more than imaginary. (Although in an extraordinary passage in his book on The Cognitive Neuropsychology of Schizophrenia, Chris Frith suggests that thoughts come labelled with something like tags which advertise whether they have an internal or an external origin, and that this tagging system - or is it the system which reads what's on the tags (!) - breaks down in schizophrenia.) What instead we find is a failure to instantiate a distinction between the imaginary and the real in the first place, so that the question of whether a thought is a mere fancy or concerns a fact cannot come about. The very character of the thoughts is damaged, and not just what we do with these thoughts. This is what makes for delusionality and psychosis: a loss of the essential oppositionality of imagination and reality. 'But that isn't referenced by the idea of a failure of reality testing!' you complain. Well, on the one hand, I want to say, it is in fact precisely what it means. But on the other, I see what you mean: the phrase may readily mislead us if we pick it up by the wrong end. Sure, but, well, don't pick it up by the wrong end then.
The notion of lost contact with reality is a bit easier. For nothing in the phrase ought by itself be take to imply that what loses contact with reality is a representational mind whose inner representations are no longer reliably caused or helpfully trued up with the facts of the now receding world. After all, what loses contact with reality is not a mind but a person. To lose contact with reality is in truth to suffer a mental breakdown - to have a breakdown, and not simply a retreated dislocation, of the mind. What I am saying is that here it is rather more obvious that it is the reflective interpreter of the concept of 'reality contact' who is bringing along the picture which she wants to go on to reject, rather than the mere deployer of it. What is rather more helpful in the notion of reality contact or being in touch with reality is the sensorimotor physicality of the idioms of touch and contact. What actually breaks down in psychosis is the in-dwelling of the person in their proximal environment with its ready-to-hand objects. The certainties which lie at the heart of our practices of mind are lived, practical, embodied certainties, certainties in action, and particular shared forms of them form the foundations of our reason.
The moral: the psychiatric idioms are fine just by themselves; please leave them alone! A philosophy which challenges the idioms rather than the uses of the pictures which the idioms can inspire in those unskilled in reflective interrogation of concepts has itself suffered a moral short-circuit. The short-circuit in question has to do both with the projection of confusion and culpability and with laziness. Projection: it is we who mislead ourselves in taking up our phrases in reflectively misleading ways - yet then we try to blame it on the phrases themselves! Laziness: it doesn't take too much work to look at how the phrases are used in practice.