Thursday, December 16, 2010

Medicare Pays Most Consistently (Why NC Mental Health Reform Continues to Crash & Burn): HELLO NC PSYCHOLOGICAL ASSOCIATION

The following article was written by psychologist, Ivan J. Miller, PhD associated with the American Psychological Association's Div 42 (Independent Practice) Division.

"Underfunding Mental Health Services—Disparity 2.0

Isn’t It Time for Real Reform?
Click here to download the PDF

Ivan J. Miller © Copyright 2010


Although parity legislation has passed almost everywhere, a new mental health funding disparity has emerged, Disparity 2.0. Psychiatric hospitals are closing. Mental Health Provider reimbursements are well below the level of those for physical health care. Treatment rates are flat or falling. The cause of Disparity 2.0 is the current U.S. health insurance system that relies on multiple insurers who cover the population with a series of temporary health insurance plans. The only funding systems that have parity for mental health and physical health are single, unified, and transparent systems. It is time for mental health advocates to campaign for a real system change.

.....In addition, the behavior of the mental health professional organizations and health care economists has been inappropriate to the reality of the situation. Instead of the recognizing and protesting the continuing discriminatory funding of mental health services, mental health advocates and professional organizations have been touting the victory of parity legislation.....

Are there systems that do not discriminate against mental health patients?

In the U.S., the exception to declining reimbursements for the past two decades is the Medicare system. Medicare reimbursements have risen 21% since 1990. Medicare reimbursements are negotiated transparently under public scrutiny. Professional organizations are permitted to reason with Medicare about the need to reimburse providers adequately in order to maintain the infrastructure of mental health services. The consequence is that Medicare reimbursements have increased with inflation and have not followed the decline of insurance reimbursements.....

......Reimbursements for psychotherapy services have been stagnant or falling for 20 years, psychiatric hospitals are closing,[1] and funding for public mental health services are being cut.[2] Legislation requiring parity for mental health services has passed in most states and the federal government, so a person would think that mental health services would be accessible, patients would be receiving quality services, and mental health professionals would be thriving. Instead of real parity with physical health care, mental health has unfortunately merely transitioned to a more insidious form, Mental Health Disparity 2.0

.....The relationship between insurance and Medicare is another indication of reimbursement disparity. It is widely considered the norm that insurance pays about 125% of Medicare rates. The Medicare rates are partially based on factors that reflect the necessary level of education and training needed, overhead expenses, and the reimbursement rates needed to sustain an adequate workforce. It is considered the norm that insurance rates tend to follow changes in Medicare with annual adjustments. Indeed, in the Lewin study in 2007[23], inpatient physical health care was reimbursed at the rate of 164% of Medicare. On the other hand, mental health service reimbursements are not adjusted to keep up with changes in Medicare. In 2009, in Colorado, the typical reimbursement ($72/hr.) for an hour of psychotherapy was 79% of Medicare.....

Comparison of annual earnings for various professions, U.S. Bureau of Labor Statistics, 2008


Annual earnings

Primary care physicians




Physical therapists




Psychologists who provide individual and family services


Auto Mechanics who work at a dealer


Mental health and substance abuse workers


Marriage and family therapists