Rate cuts and other developments
disturb panel providers
Rate reductions in the mental health field arenít exactly news.
But there was a curious confluence this spring, with significant
payors in different parts of the country announcing sharp cuts:
dropped rates for psychologists to $58 in Colorado and Illinois. PsyFin
readers report getting between $70 and $80 before the cut.
l New Directions cut
some Florida providersí rates into the low-$70 range from a
previously generous $110. New Directions is partly owned by Blue
Cross/Blue Shield of Florida--which shifted its mental health business
to the carve-out at the end of 2011.
"The New Directions cut in particular is insane," says
Susan Frager, who runs Psych Administrative Partners, a mental health
billing service in St. Louis, MO. "Thatís almost 40% off for
some of my Florida providers."
In that case, clinicians had another reason to complain.
After seeing their fees sharply reduced, they were told theyíd have
to reapply just to keep their place on the BC/BS-New Directions panel.
"My other beef with New Directions is that you canít get on
the panel to save your life," Frager adds. "I have people
beating their heads against the wall to get on that panel and they canít.
And these are people with specialties that are not represented in
"I have one client whoís literally the only therapist in a
small town who does housecalls at a local nursing home. A lot of those
patients have supplemental insurance with Blue Cross/Blue Shield, but
my client canít get on the panel."
That kind of access issue--along with the rate cuts--have led some
to charge that the managed care industry is committing de facto
violations of the federal parity law. According to an article in the
May issue of The National Psychologist, federal agencies
have been petitioned by organizations including the American
Psychiatric Association, the National Alliance for the Mentally Ill (NAMI),
and the Parity Implementation Coalition.
But getting that argument heard is complicated by the fact that
there appear to be overlapping agency jurisdictions: HHS, the
Labor Department, the Treasury Department, and conceivably the
Department of Justice, could be involved in pursuing remedies.
In other managed care news, the TRICARE contract covering three
million military dependents and retirees in western states changed
hands. TriWest had administered that contract since the late í90s,
but in March the Department of Defense (DoD) awarded the contract to
United Healthcare Group. If that decision stands, United would take
over the business on April 1, 2013.
TriWest is protesting the decision, complaining that United
actually entered the higher bid. In a March statement to media
representatives, TriWest CEO David McIntyre said the companyís
challenge is based on two charges:
1. That the DoD "disregarded several hundred
million dollars" in discounts that TriWest had guaranteed.
2. That UnitedHealth was judged by DoD to offer "best value"
based only on a review of its performance on its five largest
accounts. Complaints and legal judgments against United were ignored,
McIntyre compared the DoD decision to "buying a house without
an inspection." Before awarding the contract, he added, officials
"never bothered to go to the public market space to figure out
what might be out there. They didnít contact other entities [UnitedHealth
works with]. They didnít contact the insurance commissioners in the
states that they operate in."
Then, getting more colorful, he added the following: "Do a
Google search [on United] like my nine-year-old [son] did...You have
to wonder, with that lengthy list of items--not delivering on their
commitments and being fined--whether that really merits being rated at
the top category of past performance."
For more on the TriWest contract protest, see the Navy Times
website here: tinyurl.com/pf0412a. To contact Susan Frager, see
www.psychadmin partners.com or call (888)530-9833. Weíll be
following up on Triwest, as well as the rate cut picture, in future