Complete Story


Psychiatrists and insurance - the rest of the story

A recent study published in JAMA Psychiatry on Dec. 11, 2013 entitled: Acceptance of Insurance by Psychiatrists and the Implications for Access to Mental Health Care” is getting a great deal of attention and raising a lot of questions and concerns both nationally and locally. The study, based on data collected by the Federal Government from surveys of office-based physicians’ practices between 2005 and 2010 found that all physicians increasingly choose to not participate in insurance plans.

Approximately 72 percent of psychiatrists accepted private insurance in 2005/2006, but that fell to 55 percent in 2009/2010, compared to 89 percent of other physicians. Further, the study found that 55 percent of psychiatrists accept patients covered by Medicare, compared to 86 percent of other doctors. And 43 percent of psychiatrists accept Medicaid, while 73 percent of other doctors do.

Again, this data is based solely on psychiatrists in private practice. Psychiatrists who are employed by large medical centers, community mental health centers and other public systems are more likely to participate in insurance plans as part of their employment agreements.

With the passage of the Affordable Health Care Act (which includes mental health as one of the 10 types of “essential health benefits that must be provided under the new health care law) and expanded Medicaid, more and more Ohioans are going to be eligible for mental health treatment.

However, this raises concerns that expanded coverage may not by itself guarantee access to needed treatment. Even if a patient has insurance that covers mental health care, patients may still have a problem if there aren’t psychiatrists who accept their insurance.  

So, why don’t more private practice psychiatrists accept insurance?

Like any other problem that is systemic, there is not one simple answer. And, while the study didn’t explore the reasons for the decline, based on feedback from OPPA members over the past decade, it is likely the result of tactics by insurance companies to deny or limit coverage and reimbursement for individuals with mental illness and/or addiction disorders:  

1)      Historically, insurance companies have not covered psychiatric and/or addiction services at the same level as other medical or surgical benefits. If coverage was included at all, it was minimal and there were often higher co-payments or deductibles imposing stricter limits on services. In fact, it is this exact type of discrimination in coverage that led to the passage of the Mental Health Parity and Addiction Equity Act, which went into effect this month. While the Parity Act now prohibits group health plans and insurers from providing mental health services that are not on par with medical or surgical benefits, it is inconsistently adopted and enforced. It also does not apply to small group or individual plans, thus reducing potential benefits (to only those allowed by state law).

2)      Until just recently (2013), insurance companies would reimburse a psychiatrist for either an office visit (which involves medical decision making, including a decision about whether or not to prescribe medication and what type of medication(s) to prescribe) OR psychotherapy – not both. Psychiatrists who want to continue to provide psychotherapy, in addition to determining whether or not prescribing medication (or other therapies) to treat symptoms is appropriate (which entails significant additional time), may opt not to accept insurance.

And, while the change in coding represents a step toward for a more-fair and improved reimbursement model, insurance companies have reduced their allowable payments for psychotherapy to compensate for the additional allowed codes, negating the anticipated "more-fair" reimbursement."

3)      Even when mental health coverage is part of the benefits of an insurance plan, payments by insurers for many services provided by psychiatrists are vastly inferior compared to payments to other physicians. Direct patient interaction codes have always been reimbursed at a lower level by insurance companies than have procedure services. Even primary care physicians have procedures for which they bill (EKG, X-Ray, lab draws, minor surgery) which is more fairly reimbursed, which helps to off-set and compensate the under-reimbursed cognitive services. Psychiatrists do not have procedure codes and are thus disadvantaged by the low reimbursement for cognitive services that often are less than allowed by Medicare. In some cases, these fail to cover costs.

4)      Insurance companies may be willing to only approve a lower level of care than what a psychiatrist believes is in the best interest of their patient. For the past decade or two, this has been especially true as it relates to inpatient hospital services and pharmacy benefits.

5)      Psychiatric treatment is often subject to prior authorization and burdensome appeals processes to managed care companies. Increasingly over the past decade, at least in Ohio, psychiatric services have been denied as not being “medically necessary.” This type of denial puts into motion a lengthy appeals process, often to no avail. As a result, compensation from insurance companies is often slow, partial or not at all, which creates a cash-flow delay.

6)      Psychiatrists are more likely than other physicians to practice on their own, and solo practitioners, regardless of specialty, are less likely to accept insurance, in part because they do not have the back-office staff to deal with insurance companies. And, they don’t have the staff to assist the patient or family members with the appeals process to the insurance carrier, which is the only recourse (in Ohio) to address services that are denied.

7)      A psychiatrist in private practice is not able to provide patient care when handling administrative requirements from insurance companies and cannot delegate such work to a nurse or other staff.

8)      Even when an insurance company approves reimbursement, it is not uncommon for the insurance company to later reverse its decision and request a refund from the psychiatrist for the treatment that was provided.

9)      Finally, the study stated that the supply of psychiatrists is not increasing as fast as the demand. The author of the study speculated that as a result, psychiatrists may have so much demand for their services that they do not need to accept insurance. Again, given the choice of spending time on insurance appeals, verses patient care, psychiatrists are likely going to choose patient care.

The Solutions

So what can be done to address concerns about access to private practice psychiatrists? Well, first, it’s going to take multiple stakeholders including physicians and other mental health practitioners, insurance companies, policy makers, legislators, employers and others, all working together to address the crisis of access to mental health treatment.

Possibilities might include:

  • Working as teams (which is the concept behind the patient-centered medical home);
  • Changing the reimbursement system – if insurance companies are only willing to pay a minimum, then patients are at risk for receiving care only from less-credentialed professionals, or psychiatrists who provide care of shorter durations to create the volume necessary to maintain a private practice.
  • Encouraging insurance companies to meet with psychiatrists to address concerns related to coverage, reimbursement and appeals of psychiatric services;  
  • Adjust reimbursement to attract psychiatrists who are able to provide effective and appropriate care;
  • Encouraging medical students to choose psychiatry as a specialty when entering residency (if the barriers and disincentives continue, then the trend for unfilled residency slots in psychiatry will continue) – why would someone – who comes out of medical school with tremendous debt – want to choose a specialty where the reimbursement is lower, the hassle of actually receiving approval for coverage of the treatment is more complex, the patients are more difficult and take longer to treat; and where tremendous stigma continues to exist.
  • Training other clinicians in the field, who have appropriate medical training, such as nurse practitioners and physician assistants specializing in mental health, to treat patients who present with the less complex psychiatric symptoms.

The OPPA stands ready to work with health plans, policy makers, other physician groups and patient advocacy groups to fix the problems that currently exist so that patients who have insurance coverage for mental health treatment have access to psychiatrists.

Also, the OPPA will soon be asking its members who are in private practice to respond to a survey that further identifies reasons why members don’t accept insurance and explores ideas for how best to address the reasons.

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