Why there will be no Mental Health Parity associated with a 'for profit'/ non-government sponsored health insurance industry
In the Fall of 2008, NC passed a mental health parity law. Didn't matter. BCBSNC was allowed to opt out of it. BCBSNC insures over 50% of all people paying for insurance in NC.
So, here are some reasons why the notion of mental health parity doesn't matter AT ALL if we are caught up in a for-profit health insurance industry scenario.
Remember: Medicare has overhead administrative costs below 5%. BCBS has administrative costs close to 20%.
First item was put forward by Dr. Gordon Herz, psychologist, from the Division 42 (Independent Practice) of the American Psychological Association (Gordon@DrHerz.us Madison, WI).
******************************
"...Imagine -- bear with me, I know this is a fantasy -- you are a grossly
overcompensated CEO a health insurance company, trying to make as much of
your 7 figure performance bonus you can, and to make as much forstockholders
as you can.
Read the description of the parity law and its "requirements."
How many ways can you devise to circumvent it, make mental health patients'
and the doctors who take care of them miserable? ...
If I wanted to continue my profit-making for me and my company I'd simply
define as 'noncovered,' in the policy language, well, pretty much any
condition I didn't want to pay for. ....
If the terms of the plan are that psychotherapy requires preauthorization and maybe even reauthorization in writing by the doctor every visit or so, but hip surgeries require no
authorization, that is, as I understand it, completely acceptable under the
"parity" legislation.
Paraphrasing APAPO's summary of the parity legislation
<http://www.apapractice.org/apo/in_the_news/parity_summary.html#>, the law
applies to "...all financial requirements, including deductibles,
copayments, coinsurance, and out-of-pocket expenses, and to all treatment
limitations, including frequency of treatment, number of visits, days of
coverage, or other similar limits."
Note: there is nothing in there that requires parity in any other way of
managing benefits.
*******************************
Bryant Welch, J.D., Ph.D., is a clinical psychologist and attorney living in Hilton Head Island, S.C. He designed and built the APA Practice Directorate which he ran from 1986 until 1993.
From the spring, 2009, National Psychologist: The following article appears in the May/June 2009 issue of The National Psychologist on Page 14.
Parity: Future of an Illusion
"....There was, however, a serious problem with parity. According to most of the proposals, parity provisions addressed a reimbursement system that no longer existed. Under parity, insurance plans had to provide the same co-pay and the same deductibles for mental health care that they did for other forms of health service.
If it was at 20 percent co-pay for outpatient services in medical care, it would be at 20 percent co-pay in outpatient mental health services. That;s parity as it has typically been defined. The problem is that insurance companies have not relied on co-pays and deductibles for cost control for a long time now.
Managed health care controls based on the concept of 'medical necessity' shape the amount of resources that will be allocated to any particular health care problem. Parity does not even address these mechanisms.
Under managed health care insurers can articulate any benefit they want and they can order businesses to make that same benefit available to people seeking psychological services. The real question this does not address, however, is how will 'medical necessity' be determined by the insurance company in administering the program.
One can have all the mental health care that is 'medically necessary' under an 80-20 payment plan with no maximum limit on visits and still wind up with exactly zero mental health treatment if the insurance company determines the care is not medically necessary.
In short parity closes the barn door after the horse has already been stolen.
But the problem with most parity bills runs even deeper. Typically, given everyone's presumption that parity is going to lead to more money being spent on mental health care, businesses and insurance companies are able to make a successful plea that they must have some protection from runaway spending, something that did occur in the mental health field when the for-profit psychiatric hospitals were given special exemptions from Medicare regulations, which made investments in mental health facilities more lucrative and more attractive to venture capitalists in the late 1980s.
Thus, provisions were put in many parity bills that limited the cash outlay businesses had to pay under the parity bill. If they did not provide any mental health benefit, they did not have to conform to the parity provisions at all. It was only if the company provided mental health care that it had to meet the parity standards.
In short, the loud cries of victory coming from representatives of the mental health community every time a parity measure has been passed have on many occasions been very hollow victories, indeed. ..."
So, here are some reasons why the notion of mental health parity doesn't matter AT ALL if we are caught up in a for-profit health insurance industry scenario.
Remember: Medicare has overhead administrative costs below 5%. BCBS has administrative costs close to 20%.
First item was put forward by Dr. Gordon Herz, psychologist, from the Division 42 (Independent Practice) of the American Psychological Association (Gordon@DrHerz.us Madison, WI).
******************************
"...Imagine -- bear with me, I know this is a fantasy -- you are a grossly
overcompensated CEO a health insurance company, trying to make as much of
your 7 figure performance bonus you can, and to make as much forstockholders
as you can.
Read the description of the parity law and its "requirements."
How many ways can you devise to circumvent it, make mental health patients'
and the doctors who take care of them miserable? ...
If I wanted to continue my profit-making for me and my company I'd simply
define as 'noncovered,' in the policy language, well, pretty much any
condition I didn't want to pay for. ....
If the terms of the plan are that psychotherapy requires preauthorization and maybe even reauthorization in writing by the doctor every visit or so, but hip surgeries require no
authorization, that is, as I understand it, completely acceptable under the
"parity" legislation.
Paraphrasing APAPO's summary of the parity legislation
<http://www.apapractice.org/apo/in_the_news/parity_summary.html#>, the law
applies to "...all financial requirements, including deductibles,
copayments, coinsurance, and out-of-pocket expenses, and to all treatment
limitations, including frequency of treatment, number of visits, days of
coverage, or other similar limits."
Note: there is nothing in there that requires parity in any other way of
managing benefits.
*******************************
Bryant Welch, J.D., Ph.D., is a clinical psychologist and attorney living in Hilton Head Island, S.C. He designed and built the APA Practice Directorate which he ran from 1986 until 1993.
From the spring, 2009, National Psychologist: The following article appears in the May/June 2009 issue of The National Psychologist on Page 14.
Parity: Future of an Illusion
"....There was, however, a serious problem with parity. According to most of the proposals, parity provisions addressed a reimbursement system that no longer existed. Under parity, insurance plans had to provide the same co-pay and the same deductibles for mental health care that they did for other forms of health service.
If it was at 20 percent co-pay for outpatient services in medical care, it would be at 20 percent co-pay in outpatient mental health services. That;s parity as it has typically been defined. The problem is that insurance companies have not relied on co-pays and deductibles for cost control for a long time now.
Managed health care controls based on the concept of 'medical necessity' shape the amount of resources that will be allocated to any particular health care problem. Parity does not even address these mechanisms.
Under managed health care insurers can articulate any benefit they want and they can order businesses to make that same benefit available to people seeking psychological services. The real question this does not address, however, is how will 'medical necessity' be determined by the insurance company in administering the program.
One can have all the mental health care that is 'medically necessary' under an 80-20 payment plan with no maximum limit on visits and still wind up with exactly zero mental health treatment if the insurance company determines the care is not medically necessary.
In short parity closes the barn door after the horse has already been stolen.
But the problem with most parity bills runs even deeper. Typically, given everyone's presumption that parity is going to lead to more money being spent on mental health care, businesses and insurance companies are able to make a successful plea that they must have some protection from runaway spending, something that did occur in the mental health field when the for-profit psychiatric hospitals were given special exemptions from Medicare regulations, which made investments in mental health facilities more lucrative and more attractive to venture capitalists in the late 1980s.
Thus, provisions were put in many parity bills that limited the cash outlay businesses had to pay under the parity bill. If they did not provide any mental health benefit, they did not have to conform to the parity provisions at all. It was only if the company provided mental health care that it had to meet the parity standards.
In short, the loud cries of victory coming from representatives of the mental health community every time a parity measure has been passed have on many occasions been very hollow victories, indeed. ..."
posted by Marsha V. Hammond, PhD at 1:15 PM
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