Better or Worse Times for Therapists?
In January 2010, the long-awaited Mental Health Parity and Addiction Equity Act went into effect. Sponsored by New Mexico Senator Pete Domenici, whose adult daughter suffers from schizophrenia, and the late Minnesota Senator Paul Wellstone, the law is intended to ensure that Americans who seek mental health treatment receive the same level of insurance benefits that they do for any medical condition. It eliminates separate tiers of deductibles, out-of-pocket costs, and benefit limits, and would seem to be a great boon to therapy and therapists. But under intense lobbying from insurance companies, it ends up covering only group policies issued by businesses employing more than 50 people. It doesn’t require plans without mental health coverage to add it; it says only that if a plan offers mental health benefits, the coverage must be equivalent.
While helping thousands of people get better mental health coverage, the law has had some unintended consequences. In a paper currently under review for publication, psychologists Michael Hoyt of San Rafael, California, and Alan Gurman, coeditor of the classic Clinical Handbook of Couple Therapy, note that therapy sessions treating relational problems or involving an identified client’s family or peer support system are now triggering more denials of payment by insurance companies. Insurers are taking this action despite clear research showing that bringing a depressed client’s partner or a troubled adolescent’s friends into sessions can help significantly. Another development, says Hoyt, is that some HMOs are narrowly invoking “medical necessity” as a way to restrict coverage to brief cognitive therapies. Both Hoyt and Gurman consider this part of a movement to replace forms of evidence-based psychotherapy with psychopharmacology. Because medical necessity often equates only to “the most appropriate level of service,” this may herald a return to the old days of restricting coverage to briefer forms of therapy.
Ironically, parity has resulted in some loss of mental health coverage. A report by the Kaiser Foundation notes that 9 percent of firms with more than 50 employees that had previously supplied mental health coverage dropped the coverage as a result of what they said were increased premiums brought on by parity. However, parity isn’t the real cause of the higher premiums: it’s merely the excuse put forward by insurance companies to disguise their power play to increase profits. The Congressional Budget Office estimated that parity would increase premiums by less than 1 percent. Yet, since January 2010, insurance companies have raised their premiums by 8 to as much as 20 percent. This has yielded the logical result: in 2010, WellPoint, UnitedHealth, Aetna, Humana, and Cigna aggregately netted $3.2 billion, a 31-percent profit increase over 2009, according to Health Care for America Now, a nonprofit consumer advocacy group.
Will the Affordable Health Care Act, popularly known as healthcare reform, help remedy the situation? After all, it’s intended to lower premiums and bring insurance coverage to millions of Americans, mandating that most Americans have health insurance by 2014. Moreover, beginning in 2011, insurance companies are required to spend at least 80 percent of all premium dollars on healthcare—not on salaries, dividends, or administrative costs. But the same forces that cut away at parity may whittle down the new law’s intended benefits. Many therapists are already reporting increasing denials and payment delays.
People who run billing services for therapists, however, are just beginning to see changes. “A lot of policies have changed,” says Jean Thoensen of PsychBiller, LLC. “Many have dropped preauthorization requirements, for example, but some have added them.” For instance, she notes that Anthem Blue Cross of California now requires preauthorization after the 12th visit for most policies. She’s also seen policies that only allow 10 visits per year, and require preauthorization.
Social worker Susan Frager, who runs Psych Administrative Partners, hasn’t seen any noticeable roadblocks yet, but expects that more preauthorization requirements or back-end audits are coming soon. With back-end audits, therapists may have to produce their treatment notes and be subject to refunding insurance payments.
Frager’s wake-up call for therapists includes a prediction that parity and insurance reform will give cover for insurance companies to insist that therapists prove medical necessity before or after providing treatment. In addition to requiring “appropriate levels of care,” medical necessity calls for treatment that meets accepted standards of medical practice. So this is probably an excellent time for clinicians to become proactive about ensuring that their practices maintain appropriate standards.
All insurance companies are obligated to post their codes outlining what they define as a medical necessity, usually on their websites, Frager explains. So doing this bit of research is a good start. “Most therapists’ practices probably do meet these standards,” she adds, “But it’s the documentation of it that’s the key.”
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