They Pay You to Do That? The Evolution of Mental
Health Insurance Coverage in
the US
Gerald P. Koocher, Ph.D., ABPP
Simmons College, Boston
www.ethicsresearch.com
A brief sojourn through
the Microeconomics of
Health Insurance
How do you feel about…
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Your health?
Your mental state?
Your nose?
Your breasts?
Your body fat
distribution?
Moral Hazards of Insurance
with special attention to Mental Health and Plastic Surgery
• Ex ante
o Rational people won’t buy insurance without anticipated need.
• Ex post
o Rational people will demand the best perceived quality to which they are
entitled
• Adverse selection in the mental health (and plastic
surgery context) context
o “Demand response to insurance coverage for mental health services is greater than
that of other medical services and therefor the welfare loss from coverage is larger
while the risk spending benefits are similar.” (Frank & McGuire: 908)
o Consider the U.S. Federal Government experience with “high option” Blue
Cross/Blue Shield policy and psychoanalysis.
Frank, R. G. & McGuire, T. G. (2000). Economics and Mental Health. In A. J.
Culyer & J. P. Newhouse (Eds.) The Handbook of Health Economics, Volume II.
Amsterdam: Elsevier, (pp 894-954).
Externalities in the Economics of
Mental Health Care
• Definition - The effects of a purchase/use decision
by one set of parties on others who did not have a
choice and whose interests were not taken into
account.
o Chronic mental conditions (e.g., schizophrenia, bi-polar illness) occur
approximately 4% of the population, often with onset prior to age 30, and
create substantial disability.
o Existing treatments often do no not “cure” such conditions.
o Pharmaceutical companies, managed care entities, and assorted provider
groups have competing interests that do not necessarily align with
patients’ unfettered preferences (e.g., medication versus psychotherapy as
opposed to medication + therapy)
From The NSDUH Report
National Survey on Drug Use and Health (2011)
More Adverse Selection in Mental
Health and Substance Abuse Care
• Significant mental illness conditions
(e.g., bipolar disorder, major depression,
and schizophrenia) are chronic, resistant
to “cure,” and often co-exist with or
become complicated by
o
o
o
o
Poverty
Homelessness
Substance abuse
Incarceration
Massachusetts Six Years After
Mandatory Coverage
• Mandate to bring those healthy people into the pool,
thereby bringing those prices down, and making health
insurance affordable for everyone.
• 439,000 previously uninsured Massachusetts residents
obtained insurance after the law (83% through
publicly-funded programs)
• Went from 90% of residents insured to 98%, the
highest rate in the US.
• 2% of Massachusetts residents still not covered, but
that compares favorably to the national average of 16%
uninsured.
Fee-for-Service Payment Model
• Historical trigger with the U.S.
Medicare system--used to
attract providers in the 1950s
when the American Medical
Association fought
“government health insurance”
as socialized medicine.
• Procedure based payment
system encourages
fragmentation of services and
rewards quantity with minimal
focus on quality.
U.S. Health Care System:
A highly responsive, but shabby patchwork of coverage
• Few comprehensive national mandates
• Too expensive with limited constraint on cost
growth
• Many people uninsured
• Inadequate attention to quality or integrated
care
• Inadequate focus on preventive care and
chronic illnesses
o Avoidable conditions and complications
Key Concepts in Payment
• Co-insurance (to reduce moral Hazards)
o Co-payments and deductibles
• Traditional Indemnity Plan
• POS – Point of Service (PCP –primary Care
Physician as gatekeeper; in- and out-of-network)
• PPO – Preferred Provider Organization
(Contracted network; higher costs out-ofnetwork)
• HMO – Health Maintenance Organization
• Mental Health/Substance Abuse Carve Outs
o Carved out services go to a specialty vendor (sub-contractor model)
Parity for MH & SA coverage ?
Maybe not if you “carve out”
Rationing Schemes
New and Old
• Capitation
o # of people multiplied by a dollar cap per
person
o Profit as a function of reducing units of
service
• Global Payment Systems for
Accountable Care
Organizations (ACOs)
o Annual fee per patient, higher fees for more
complex/sicker patients, bonus payments
for high quality care.
Payment Models from
Practitioner Perspective
• Insurance free care providers
• Indemnity coverage (any
willing provider)
• Preferred Provider
Organizations (Networks)
• Health Maintenance
Organizations (HMO)
o Open panel
o Closed panel (site based)
• Value Based Integrated Care
(?)
What do we treat?
• Diagnostic nomenclature controversies (DSM & ICD)
to classify mental illness
• DSM V Codes – conditions as a focus of treatment
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o
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o
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V15.81 - Noncompliance With Treatment
V61.1 - Partner Relational Problem
V61.8 - Sibling Relational Problem
V62.2 - Occupational Problem
V62.3 - Academic Problem
V62.4 - Acculturation Problem
V62.81 - Relational Problems
V62.82- Bereavement
How do we treat it?
• Evidence based
practice (EBP)
• Practice guidelines
• The case of Jonathan
o Norcross, J. C., Hogan, T., &
Koocher, G. P. (2008). Clinician’s
guide to evidence-based
practices: Mental health and the
addictions. New York: Oxford
University Press.
Current Procedural Terminology
or CPT Codes
in Mental Health Care
• 90801 Psychological Diagnostic Interview
Examination (Including report prep time
90885)
• 90818 Individual psychotherapy, 45 – 50
minutes for Inpatient (Outpatient = 90806)
• 90821 Individual psychotherapy, 75 – 80
minutes for Inpatient (Outpatient = 90808)
• 90847 Family Psychotherapy with patient
Present (90846 without patient present
• 90853 Group psychotherapy
But wait!
Psychology is a “health care profession…”
• The conditions that tend to
kill people in the developed
world often have behavioral
components….
o
o
o
o
o
Non-adherence with medical regimens
Smoking
Obesity
Substance abuse
Accidents/violence
Health and behavior assessment and
intervention CPT codes for use
when a physical dx is present
• 96150 – the initial assessment of the patient to determine the
biological, psychological, and social factors affecting the
patient’s physical health and any treatment problems.
• 96151 – a re-assessment of the patient to evaluate the patient’s
condition and determine the need for further treatment.
• 96152 – the intervention service provided to an individual to
modify the psychological, behavioral, cognitive, and social
factors affecting the patient’s physical health and well being.
Examples: increasing the patients’ awareness about their
disease, or using cognitive/behavioral approaches to initiate
physician prescribed diet and exercise regimens.
• 96153 – Group intervention - service provided in group context.
Example: smoking cessation program that includes educational
information, cognitive-behavioral treatment and social support.
Group sessions typically last for 90 minutes and involve 8 to 10
patients.
Fraud as a Cost of Care
USA Today, August 12, 2012
• "Report examines Medicare billing at mental health centers"
by Kelly Kennedy.
• …At least 90% of more than $200 million in "questionable billing"
issues found at Medicare outpatient community mental health
centers occurred in states with little or no oversight…
• Three states, none of which has licensing or certification
requirements for the mental health programs, dominated the list.
o Florida had 72 centers and received $82 million in total Medicare payments in 2010
o Louisiana had 57 clinics and $60 million
o Texas had 23 clinics and $50 million in payments.
• After reviewing195 centers they found:
o patients who live as far as 4,000 miles from the clinics
o patients with Alzheimer's who were unable to benefit from counseling
o One Florida clinic billed Medicare for a patient who lived in Hawaii
o 77 other patients at the same clinic lived an average of 550 miles away.