Reimbursement rates still a concern for psychologists



Bill Hancure, Ph.D., is associate director for behavioral health at Blue Cross/Blue Shield of Rhode Island. Last year, BCBSRI adopted the Medicare fee schedule for all of its providers. (photo by Tom Croke)

By Phyllis Hanlon

The issue of reimbursement fees for psychologists continues to be an area of concern for psychologists.

The method in which those rates are determined, particularly for behavioral health providers, is still inconsistent when compared with the medical side of treatment. In addition, specifics about fees are closely guarded from public scrutiny.

Contrary to popular belief, the Massachusetts Division of Insurance (DOI) does not play a role in establishing fee schedules for providers in the state. "Reimbursement rates are negotiated between provider networks and insurers," says Chris Geotchus, DOI's communications director. "If a psychologist is not with a provider network, he typically receives what is reasonable and customary for services rendered in a particular geographic area."

According to a report from the American Medical Association (AMA), in 1992 the federal government created a standardized payment schedule for physicians based on a resource-based relative value scale (RBRVS). Under this system, the combined costs of physician work, practice expense and professional liability insurance is multiplied by a monetary amount determined by the Centers for Medicare and Medicaid Services (CMS). The resulting number becomes the RBRVS.

Geographic differences affect the final payment amounts. An advisory committee comprising limited license practitioners and allied health professionals, including psychologists, works collaboratively with physician members of the RVS Update Committee (RUC) to develop relative value recommendations for non-medical Current Procedural Terminology (CPT) codes. Their suggestions ultimately affect reimbursement rates. However, not all insurers base their reimbursement structures for behavioral health providers on the RBRVS guidelines.

William Hancure, Ph.D., associate director for behavioral health at Blue Cross/Blue Shield of Rhode Island (BCBSRI), says that RBRVS "underlies the Medicare reimbursement fee system." He notes that in August 2004, BCBSRI adopted the Medicare fee schedule for all its providers. "We pay at least the Medicare rate for everyone," he says. "RBRVS is the philosophical foundation. As the name indicates, [the scale] weights each service to provide internal consistency. This is not represented in most other insurance companies."

One of the biggest factors affecting providers' fees is public perception. Hancure says that society as a whole does not value behavioral health services as highly as medical care. Mark Bevelander, contract administrator for BCBSRI, says, "Behavioral health is viewed off to the side in many cases." Recently however, a strong connection between medical care and behavioral health is being acknowledged. But determining an accurate and fair means of reimbursement for such interconnected services provides a challenge for the insurance industry.

Bevelander says, "Carveouts wash their hands of this idea of integrated medical care." Insurers who keep behavioral health services in-house tend to consider both medical and behavioral health care when establishing fees.

BCBSRI formed a behavioral specialty advisory committee, a group of community practicing behavioral health providers, who review policies. Although this group does not determine fees, they provide input used to develop policies. "We speak to providers about rates. They have no direct official capacity for recommendation, but we do get their opinions. We don't want our fees to be well below other insurers," says Bevelander. "The whole area [of reimbursement] is a difficult one. Anti-trust laws make it difficult to talk about fees." As the culture of thinking changes, he anticipates more open discussion revolving around reimbursement rates.

When BCBSRI adopted the RBRVS rates, it embraced 100 percent of the fee schedule, according to Bevelander. He adds that on Jan. 1, 2005, BCBSRI set a floor of 102 percent of the Medicare fee schedule, which means an increase for all its providers. With a growing trend toward integrated care, BCBSRI is hoping to establish a common fee schedule between medical and behavioral health providers, he adds.

According to Ed Jones, Ph.D., vice president and chief clinical officer at PacifiCare, which oversees behavioral health benefits for Harvard Pilgrim members, their reimbursement rates are comparable with those of other carriers. He reports that PacifiCare recently increased rates to all three clinician areas: psychologists, psychiatrists and social workers. "We approach it by looking at the existing rate structure," he says. He notes that the medical side of reimbursement is based on the RBRVS. Jones declined to divulge specific rates.

John Klein, editor of Psychotherapy Finances, attributes the stagnant reimbursement rates to a failure on the part of the insurance industry to acknowledge the mind-body connection as well as simple inertia. "You have a vast apparatus working one way," he says. "It's hard to make institutional changes." He compares the hard evidence that medical problems can be "healed and quantified" versus emotional issues that are "tougher to treat and verify" as an obstacle to achieving financial equity. According to Klein, less than two percent of health insurance dollars are devoted to mental health services and that number is continuing to drop. "In the late 80s, eight or nine percent went to mental health," he says. "The [rates] have been cut some and they're not growing. They can't keep up with inflation."

New England has been hardest hit by the downward trend in reimbursement. Klein cites the numerous academic institutions in this area as one reason for the problem. "Cambridge and the greater Boston area are churning out therapists and they remain here. You have the heaviest concentration where you have a lot of master's degree programs," he says. Klein reports that the saturation of mental health care professionals increases competition and drives down reimbursement.

Klein suggests that therapists should diversify their practices by assuming "nontraditional roles." For example, he maintains that psychologists can subsidize managed care and health insurers reimbursements by taking on private pay clients. "Mental health professionals need to develop services the public will pay cash for because managed care and health insurers will continue to hold the lid on fees," Klein says.

The American Psychological Association (APA) recently conducted a practitioner survey that captured data pertinent to the issue of reimbursement. However, at press time the information had not yet been compiled and reviewed, according to Luana Bossolo of the APA media relations department. She, too, indicated that anti-trust issues prevent the APA from discussing financial matters.

William M. Mandell of Pierce & Mandell P.C., says because of anti-trust laws, the sharing of specific information regarding health care reimbursement rates can present a "slippery slope," for both parties. In addition, proprietary information is contained in contracts with payors and to publicly disclose rate details would be in violation of those contracts. New England Psychologist intends to publish a story about the American Psychological Associations' practitioner survey on this issue as soon as the findings become available.

Reimbursement rates still a concern for psychologists (May 2005 Issue)

Reimbursement rates still a concern
for psychologists
(May 2005 Issue)