April, 2012

MANAGED CARE

Rate reductions in the mental health field aren’t exactly news. But there was a curious confluence this spring, with significant payors in different parts of the country announcing sharp cuts:

l Humana/LifeSync 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 providers’ 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. "That’s 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 they’d have to reapply just to keep their place on the BC/BS-New Directions panel.

"My other beef with New Directions is that you can’t 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 can’t. And these are people with specialties that are not represented in the network.

"I have one client who’s 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 can’t 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 ’90s, 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 company’s 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, he complained.

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 didn’t contact other entities [UnitedHealth works with]. They didn’t 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. We’ll be following up on Triwest, as well as the rate cut picture, in future issues.