Parity? Let Them Pay Out of Pocket!

Allan Tasman, MD

Remember the tag line for the ad for the 1975 movie Jaws? “Just when you thought it was safe to go back in the water.” Well, just when you thought you had about all you could stand to be mad about, those sharks at the insurance companies-duh, duh, duh, duh (Jaws shark theme music)-are back. Or more specifically, they never left.

What I’m referring to are the findings in the Milliman, Inc. report released just after Thanksgiving regarding the status of mental health parity. I thought this was really bad timing, since most everyone was in a tryptophan-induced daze.

The title of the November 20, 2017 press release announcing the publication says it all: “Analysis Uncovers Significant Inequalities Between Mental and Physical Health: Lower Payments to Providers and Wide Disparities in Access to Benefits.”¹ In case that wasn’t clear enough, the subheading is: “Data Points to Potential Violations of Mental Health Parity Laws: Shows Higher Out-of-Pocket Cost for Consumers When Compared to Physical Health.” Paul Wellstone and Pete Domenici, the 2 senators for whom the 2008 Mental Health Parity Act is named, must be turning over in their graves.

"If nearly 300 people dying each day from overdoses and suicides isn’t sufficient to motivate insurers to take immediate action to improve access to the full range of in-network benefits, we have a real problem-and it’s time to start holding them publicly accountable."

This report was commissioned by the Mental Health Treatment and Research Institute, LLC, a non-profit subsidiary of the Bowman Family Foundation, and was released by a wide-ranging coalition of mental health and substance abuse advocacy groups, including Mental Health America, National Alliance on Mental Illness, American Foundation for Suicide Prevention, the National Association of Psychiatric Health Systems, and the American Psychiatric Association.

Milliman, a well-respected national actuarial and research firm, drew on 3 years of claims data, from 2013 through 2015, which encompassed information from their databases from over 40 million people and covered the usual array of hospital and ambulatory services in every state. Here’s what they found:

When taken together, the analysis paints a stark picture of restricted access to affordable and much-needed addiction and mental health care in an era of escalating suicide rates and opioid overdose deaths. Further, these disparities point to potential violations of federal and state parity laws, which require insurance companies to treat diseases of the brain, . . . the same way they treat illnesses of the body. . . .”

Patrick Kennedy, in a remarkable display of understatement, is quoted as saying, “If nearly 300 people dying each day from overdoses and suicides isn’t sufficient to motivate insurers to take immediate action to improve access to the full range of in-network benefits, we have a real problem-and it’s time to start holding them publicly accountable.”

Those of us who have worked in multidisciplinary practice groups will have long been aware of the low reimbursement psychiatrists receive compared with other medical specialties for the same services, such as for those billed under E&M codes. In case you thought maybe you were just unlucky to be working in a bad system that had poorly negotiated the contract with insurers, the Milliman report found this is a ubiquitous situation.

We all know, it’s one of the major reasons so many psychiatrists refuse to take insurance reimbursement. The approximately 20% average payment differential for the same billed code (in a large number of states they found the differential was 2- to 3-fold) is clearly a significant factor in the report’s finding that many more patients nationally use out-of-network mental health services than is the case for physical health.

The percent of outpatient mental health facility visits in 2015 which were out of network nationally was over 31% compared with only 5.5% for medical or surgical visits. This disparity was also found in mental health office visits, with almost 19% out of network for mental health visits compared with only 3.7% for physical health. Hospital care is even worse. In states representing about 30% of the nation’s population, out-of-network inpatient care was between 800% and 1000% higher than for medical care. And, nearly half the states, including my own, had reimbursement disparities as high as 30% to 69%.

Even though this report is damning to the insurance industry, the action steps are way too mild. They call on federal regulators to issue more specific guidance and immediately start audits of major insurers. That’s really going to happen with the current administration. They also call on companies and state agencies to conduct regular audits of parity compliance. Do they actually think that corporate contract negotiators don’t know what’s in the contracts? Are they kidding? For a number of years, I was involved in such negotiations regarding our medical school unified practice group, and those differentials were completely obvious. Anyone relying on other specialties to advocate for higher reimbursement for mental health in an environment where the contract total cost is a zero-sum game knows that it’s not going to happen.

What I think we need is a major class action suit in federal court. All the data from the Milliman report are already published, and the strength of such a case is crystal clear. Have a look at the full report² and you’ll know such a suit would be on solid ground.

If the insurance companies haven’t complied with the legislation so far, which is obvious in the Milliman analysis, it’s not because they don’t know what the law requires. It’s just that they think they can get away with ignoring it, and they’ve been right so far. So what are we waiting for?

References:

1. American Psychiatric Association. News release; November 30, 2017. https://www.psychiatry.org/newsroom/news-releases/analysis-uncovers-significant-inequalities-between-mental-and-physical-health-lower-payments-to-providers-and-wide-disparities-in-access-to-benefits. Accessed December 12, 2017.

2. Melek SP, Perlman D, Davenport S. Addiction and mental health vs physical health: analyzing disparities in network use and provider reimbursement rates. Milliman Research Report. November 2017. http://www.milliman.com/uploadedFiles/insight/2017/NQTLDisparityAnalysis.pdf. Accessed December 12, 2017.