The Problem
You are one of the lucky ones who has “good” mental health insurance, and there are qualified therapists in your area with openings. But no one will accept your insurance, requiring you to pay out-of-network fees. To add insult to injury, many of the therapists listed in your plan’s mental health network will not accept your insurance or no longer practice.
Aren’t the Mental Health Parity Laws Supposed to Fix This?
To date, most federal and state efforts to increase the availability of mental health-substance use disorder (MH-SUD) services have focused on legislating an “equivalence” with the medical and surgical services routinely covered.
Our previous post, Mental Health Parity Is Not a Panacea: Lessons to Date, examined the success (or lack thereof) of parity laws to date. While a few outcomes, primarily out-of-pocket costs, were improved, there was little evidence that legislated parity increased overall accessibility or utilization of MH-SUD services in general.
- The failure of parity laws to markedly improve the availability of MH-SUD services has been attributed to several factors:
parity laws suffer from significant underenforcement - insurers continue to impose inappropriate administrative barriers
- correcting individual cases of inequity through client-initiated lawsuits is expensive and time-consuming and fails to address larger, underlying systemic problems
Another Reason Why Achieving Parity Is Not Sufficient
While consumers, especially those who receive employer-based health insurance, usually have little to no choice in the company behind their plan, therapists can choose which payer networks they agree to participate in. It has been evident for a while that mental health providers have much lower rates of acceptance of health insurance reimbursement than other medical specialists (Bishop, 2014; Mark, 2020). This lower acceptance rate results in much smaller insurer-approved networks to begin with.
In addition, surveys indicate that many of the in-network providers listed in major health insurers’ MH-SUD networks now refuse to accept that insurer’s reimbursement rate or no longer practice. Although health insurance companies are remarkably proficient at tracking the utilization of benefits, somehow, they fail to purge their network lists of these ghost therapists, leading to even fewer choices than advertised.
Why MH-SUD Providers Don’t Accept Insurance Reimbursements
Studies of the effects of the MH-SUD parity laws have primarily focused on improvement in quantitative measures such as the number of visits, number of psychiatric prescriptions filled or refilled, number of days covered, and amount of deductibles. It is, however, more difficult to measure qualitative problems such as prior authorization requirements, necessity reviews, first-fail barriers, and exclusions based on provider specialty that clients and therapists say are the biggest barriers to the utilization of nominally covered mental health services.
A primary weakness of the legislated parity approach is that the insurance companies, rather than care providers, are permitted to determine the amount and appropriateness of the care provided. This enables insurance companies to systematically rig the denial of claims and appeals processes against clients and therapists, counting on the fact that only 10 percent of denied claims are ever appealed.
Health insurance reimbursement for MH-SUD services is deliberately “low and slow.” Rates have remained stagnant for years. A combination of antitrust laws and provider contracts prevent independent therapists from collectively setting fees. Consequently, in-network mental health therapists earn about half of what out-of-network therapists charge for the same services.
Harassing Therapists
Health insurance companies also subject MH-SUD providers to intrusive personal harassment, including profiling the therapists, their practice, hours, and clientele. Questioning the therapist’s credentials, refusing to take into account client disabilities or cognitive limitations, disputing the therapist’s diagnosis and treatment plan, disregarding the therapist’s judgment about emergencies, and denying the effectiveness of proven treatments, insurers effectively undercut therapists’ authority, thus discouraging their participation in mental health insurance networks.
In addition, there is evidence that health care insurers deliberately employ strategies to increase claim and appeal rejection rates (Propublica, 2024). Examples include changing billing codes periodically to screw up paperwork, purposely sending therapists and clients down “wrong person” and “wrong department” rabbit holes, and being intentionally vague about why a claim is being denied. Reviewers, now aided by AI algorithms, receive bonuses if they exceed preset rejection rates. The companies, indebted to their shareholders, not their policyholders, justify their high rejection rates as preventing “unnecessary care.” Many patients, clients, family, and therapists beg to differ.
The nastiest form of harassment in the insurers’ Pandora’s box is their ability to “claw back” prior payments for newly discovered minor discrepancies in old paperwork for claims paid years earlier. Private practices have reportedly been bankrupted by insurers demanding repayment of tens of thousands of dollars for newly disallowed services performed years before. Thus, in-network therapists are never safe from the possibility that they may suddenly be faced with having to defend services provided and reimbursed years earlier. In some cases, clinicians have sued former clients to recover these backdated denials. Thus, neither therapist nor client is ever safe from this retroactive threat.
The consensus on the street is that therapist and client harassment is increasing, especially now with the advent of AI algorithms to analyze old records. Even if a therapist eventually wins a backdated case, the administrative costs, legal fees, and other expenses add up to a significant loss. Given the inherent liabilities of operating within an insurance company’s MH-SUD network, compounded by deliberate harassment, it should not be a surprise that many therapists choose not to accept insurance companies’ reimbursements, with all of the hassles and long-term jeopardy entailed.
We conclude that despite legislated “parity,” there will never be equality in the accessibility and utilization of MH-SUD services as long as for-profit insurers treat therapists as adversaries or fiscal targets whose claims should be denied wherever possible.
What Can Be Done?
Operating within the current mental health care system, it is difficult to envision definitive fixes. The system is driven by the primal imperative of insurance companies to be highly profitable. Indeed, they are always investigating new ways to disallow claims and squeeze ever more dollars out of providers and their clients. Possible outside-of-the-box solutions await another post entry.
link
