Commercial plans' lower rates for mental healthcare may reduce patient access

Commercial and Medicare Advantage plans pay mental health providers in their networks significantly lower rates than traditional Medicare pays, which likely reduces access for patients, Congressional Budget Office analysts found.

Using claims data from the Health Care Cost Institute, the researchers found that average in-network rates for two categories of common mental health services in commercial and Medicare Advantage plans in 2014 were 13% to 14% less than fee-for-service rates in traditional Medicare.

That contrasts with the private plans paying up to 12% more than traditional Medicare for similar evaluation and management services provided by other types of physicians, according to the study published in Health Affairs.

Federal and state laws require insurers to cover behavioral health services in parity with physical healthcare, but low payment rates could jeopardize those patient access gains, the authors said.

"Parity's promise may remain unfulfilled if patients cannot access in-network providers," wrote Daria Pelech and Tamara Hayford of the CBO. "Mental health providers might not contract with insurers if they view payments as too low, especially if out-of-network payments are higher."

Even as private plans paid lower rates, enrollees spent more out of pocket because they went out of network for mental health services more than six times as often as for other types of services.

Other research has shown that psychiatrists and other mental health providers are significantly less likely to participate in health plan networks than other types of providers. One study found that just 55.3% of psychiatrists accepted private insurance in 2009-10, compared with 88.7% of other types of physicians, with similar sharp differences for Medicare and Medicaid.

The lower rates paid by private plans may violate the federal Mental Health Parity and Addiction Equity Act, said Ellen Weber, vice president for health initiatives at the Legal Action Center, which works on state parity initiatives.

Many commercial and Medicare Advantage plans use Medicare fee-for-service rates as a benchmark for most medical services, but the study showed those rates aren't comparable for mental health services, Weber said.

Fully insured commercial plans and larger self-insured plans are subject to the federal parity law, while smaller self-insured plans and Medicare Advantage plans are not.

Labor Secretary Alex Acosta and Senate Democrats have called for tougher enforcement of parity rules, including against carriers administering self-insured plans. Senate Republicans have blocked such measures.

America's Health Insurance Plans said insurers are working hard to ensure that mental healthcare is covered on par with physical healthcare. The group said the study did not acknowledge that some patients prefer to go out of network for mental healthcare. It also said the study couldn't determine if out-of-network utilization was driven by narrow networks or by providers not accepting insurance.

The Health Affairs study drew on data from about 39 million plan members covered by Aetna, Humana and UnitedHealthcare, and examined seven of the 10 services most frequently delivered by mental health providers including psychiatrists, psychologists and social workers.

While commercial plans paid less than traditional Medicare for mental health services in-network, they paid far more to out-of-network providers. They spent 43% more for mental health evaluation and management services and 53% more for psychotherapy.

Consistent with federal rules, Medicare Advantage plans paid out-of-network rates that were comparable to traditional Medicare rates.

But the study found that some commercially insured patients had limited out-of-network coverage for mental health services. For instance, patients paid the entire cost for nearly one-third of out-of-network mental health visits.

The authors wrote that while the insurers' benefit designs were "generally consistent" with parity, the success of parity may ultimately hinge on whether rates to mental health providers increase over time, higher rates expand provider supply, and insurers can expand access without raising premiums.

Weber disagreed that the study showed compliance with the federal parity law.

"The issue here is whether or not private carriers have comparable rules for establishing reimbursement rates for mental health and medical providers," she said. "This article provides more evidence that carriers appear to have different processes and rules, and that probably violates the parity law."