Managed Care

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APA Managed Care/Medicare Helpline

Department of Managed Health Care - HMOs
California Department of Insurance - Most Other Plans



the following is from the March 2010 Issue of the Southern California PSYCHIATRIST - .pdf


Parity and the State of Managed Care for Psychiatrists

By Robert Burchuk, SCPS President 2009-2010

Managed Care has been viewed as the bane of present day psychiatry by many clinicians. Many of you will recall that prior to 4 years ago I had been a full-time medical director at several health insurers over about a decade. My own perspective is that absent the management of benefits, parity would not be a possibility; however, financial constraints and the profit motive have resulted in severe and, at times, unreasonable restrictions on access to services. These may get worse before they get better. There are implications for psychiatrists who contract with managed care payors.

Many psychiatrists do not appreciate that California's mental health parity reform in 1999 only covered patients enrolled in HMO plans. New Federal parity legislation adds parity coverage for the majority of individuals who have been in non-HMO plans. These plans cover the majority of insured individuals, so that the new law expands the number of individuals who now have substantially enriched benefits. A minority of plans will elect to exclude mental health benefits.

Although National Healthcare Reform continues to unfold, The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 is moving toward July implementation. APA reported on the regulatory rules scheduled for July implementation in the most recent RushNotes.

There were many clear victories in the rule, including a requirement that health plans have a single combined deductible for mental health/substance use disorder treatment and medical/surgical treatment and a statement that discriminatory application of "non-quantitative" treatment limitations, such as prior authorization and step-therapy is also a violation of the law. APA strongly advocated for these areas to be covered in the regulations. There are still several unanswered questions and areas where the Departments have asked for further input.

Here is a link to a health industry consultant's report on implications to payors.

With parity, not only is that visit cap off, but benefit design requirements stipulate primary care co-payment parity. Improved benefits and the bad economy mean there will likely be an increased demand for services.

Aggressive scrutiny of inpatient utilization has been the norm for close to 2 decades but, in the past, some payors had been relatively laissez fare regarding the management of outpatient benefits, especially if there was an annual visit maximum and/or large co-payments that capped their financial exposure.

My own supposition is that payors have not effectively expanded their network capacity and are defensively focusing on management of outpatient utilization. This reminds me of when I was working at a large health insurer in the mid-90's and suggested they get ahead of the curve by offering parity coverage absent mandates. I was a bit more naive at the time, under-appreciating the insurer's anticipating an inevitable influx of bad risk cases - of individuals with psychiatric treatment needs. Health Plans tend to think short term with a focus on quarterly profits, especially if they are publicly traded.

Another underappreciated fact is that managed care payors' usual preference is to contract with multi-disciplinary treatment groups so that patients can be referred to a single phone number and then be "internally" assigned to one of many available providers based upon their assessed clinical needs.

This means that unless an individual psychiatrist has sub-specialty expertise, a low density practice location or ready appointment availability, they are unlikely to receive a significant volume of referrals, and even those are now likely to be actively managed.

What does this mean to the practicing psychiatrist? Insurers continue to control a massive piece of the reimbursement pie. My suggestion is that individual psychiatrists reach out to the “network development” department of insurers with whom they are currently contracted and initiate a dialogue about that company's plans for changes in association with Federal Mental Health Parity.

Questions to ask: Are they anticipating an increased need for services, modifications in their utilization management practices, changes in their fee schedule? I would direct similar questions to large insurers with whom I was not contracted. Finally, I might ask if there were multi-disciplinary group(s) accepting referrals in my geography that might be interested in my services (likely at modest reimbursement) or if entrepreneurial and energetic, whether such a group was needed.

Finally, a follow-up from Oregon. Here is a link describing the status of psychologist prescribing.

The SCPS has an additional recommendation in anticipation of the likelihood of tighter interpretation of outpatient reimbursement guidelines and a relative reduction in psychiatrist access. Direct patients to their insurance regulator so that the true scope of the problem is captured in their data collection.

For HMO plans, go to the Department of Managed Health Care (DMHC) website, and follow directions on website with complaint to patient's health plan member services department followed by a complaint to the DMHC HELP Line.

Or For Licensed (PPO) plans, go to the Department of Insurance (DOI) website, and follow directions with complaint patient's health plan member services department followed by completion of Request for Assistance (RFA). If the plan type is ambiguous, you or the patient can call the member service # on insurance card, initiate a complaint, as a necessary step in any case, and ask who is the regulatory body.