Managed Care and Psychotherapy

By William G. Herron, Ph.D. New Jersey Institute for Training in Psychoanalysis
 

Posted by permission of author. Electronic version was received from author 10/30/07. Copyright by Dr. W. G. Herron.

 

Insurance coverage and managed care evolved from benign support to cultural trends limiting mental health care and now being on course to replacing psychotherapy with drug treatment. This situation requires education and legislation to be proactive in facilitating the viability of personal understanding and complexity that are the hallmarks of verbal psychotherapy.

 
Introduction

The relationship between insurance companies and mental health providers has always been relatively contentious. Both groups view each other with suspicion regarding motives for their respective interests. Each considers the situation as to some degree “dancing with the devil” out of necessity, and each tries to control the other in a variety of ways. The history of the situation, and its many problems, has been documented extensively (Alperin & Phillips, 1997; Herron, 2001). Control is the essence of the situation, and at this point the insurance carriers have the most, which not only limits what providers can do, but also affects the treatment possibilities for patients. The current article indicates the next steps during a time when insurance carriers are particularly influential in the management of services.

 
The Easy Target

Relative to the cost of overall health care, mental health services are of limited significance. As a result it would seem unlikely that insurance carriers would bother to focus on cost containment in this area. However, it is easier to cut any costs where there will be the least resistance. Treatment of mental disorders unfortunately has fit that category.

There are a number of reasons for this. To start with, it has always been an underutilized service. The number of people who could benefit from mental health services has consistently exceeded the number of people who used the services. Although the idea of being in therapy gained certain popularity when psychoanalysis was the therapy of choice and chic, this is no longer the case. Also, a significant number of people do not like to view themselves as even having emotional problems. Unless such problems become sufficiently debilitating, many people will just not seek treatment.

This perspective limits the concept of seeking help as a preventative measure, or as a way to self-improve. This lack of personal urgency fits with managed care’s criterion of “medical necessity” to merit service. Thus, exclusion and limitations will meet much less resistance in regard to mental disorders than, for example, cancer. The overt demand is less, and it is harder to meet the narrow definition of need that is usually employed.

Also at question is the economic value of psychotherapy. The process changes people, helps them, but most psychotherapies are not heralded as cures. For example, a patient with generalized anxiety can anticipate a reduction in anxiety, but not total removal of the symptom. In addition, if a cure were possible it would be difficult to define. Differentiating between signal anxiety and more pathological forms of anxiety is complex, contextual, and difficult to specify in quantifiable terms. Character problems, such as narcissism, are even more intricate to evaluate. The subject matter does not lend itself well to quantification. If the complexity is disregarded, as often happens in what are depicted as empirically-validated therapies, a deceptive reductionism occurs. Nonetheless, the result is that short-term therapies that target symptoms get the nod for reimbursement based on a “good-enough” philosophy. Therapies that have more ambitious goals are considered either unnecessary or ineffective (Kihlstrom, 1999).

The situation is in many ways inherent to the mixture of medical and educational models that define mental illness and health. The medical concept of health puts a variety of emotional problems, ranging from mild depression to schizophrenia, in the illness category, with therapies involving both verbal interaction and medication. Within the spectrum of disorders the talking cure held sway for a time, although its origins suggested limited applicability. It turned out to have more expansive usage, requiring more treatment, but results were consistently in the category of improvement rather than cure.

Third-party payers do not put that much value on improvement, seeing it as a costly procedure that people generally do not need, meaning it is really not medically necessary. The possible educational value can be conceded, but that tends to distance such therapy from medical intervention. It is only when this philosophy has been generalized to all mental disorders, thereby involving severe depression and schizophrenia, that there has been sufficient dissent to result in regulations that mandate more extensive treatment. Even when that occurs, it is usually restricted to a small number of disorders that have been designated as “biologically-based.” Within that framework, some insurers have found a reservation, namely equating a minimum number of required sessions with the maximum number of sessions that will be allowed. Mental health parity does not exist, although there are legislative movements in that direction. If it becomes a reality, it is likely insures carriers will continue to resist, using the idea that the coverage could exist, but will not unless proven medically necessary, which will turn out to be an obstacle. This view is in turn supported by divisions within the provider groups as to the value of long-term work.

Different views as to the efficacy of possible psychotherapeutic procedures are to be expected. It is also to be expected that cost-effectiveness will be an issue, and that there will be ongoing attempts to compile results in support of what are considered the best procedures. However, in the mental health field the question of what constitutes health and illness lacks consensus and clarity. There is evidence to support a number of possibilities, but the most exclusionary is currently dominant in terms of third-party funding.

This situation has resulted in what McWilliams (2007, p.1) describes as “the horror stories of the past quarter century,” with an atheoretical shift in diagnosis and treatment influenced by insurance reimbursement favoring brief therapy and chemical support. Unfortunately for those who favor a broader perspective, their disagreement has lacked sufficient power. Also, the severely mentally ill who would be likely to meet criteria for extensive treatment, are more likely to advocate for drug treatment because it represents a biological causality removing responsibility from them and their family dynamics. Voices of protest come mainly from providers, who are often dismissed as being motivated primarily by self-interest. Patients with milder conditions who make up the bulk of private practice for psychotherapists have not been that vocal, nor are they likely to be, given the current cultural philosophy that they do not really “need” extensive treatment.

As a result insurance carriers are likely to continue both reducing fees and time allowed for psychotherapy, simply because they can. Parity laws will reduce the ease of such policy, when the laws get passed. However, as Helfmann (2007) points out, parity does not take care of the issue of medical necessity, so moderate problems are still likely to be severely restricted or excluded from treatment. This situation is likely to persist for some time, despite significant evidence that verbal psychotherapies result in medical-cost offsets (Cummins, O’Donohue, & Ferguson, 2002).

 
The Chemical Solution

Managed care is primarily about control. Gatekeepers have been placed in between therapists and patients. These intermediaries control costs and treatment procedures. Although there are some patients who do not use insurance, or use what insurance is available to them but continue therapy by paying themselves, a large number of people will only go to therapists in their plans, and only stay in therapy as long as they are getting some reimbursement. Also, many plans limit their therapists’ ability to accept payment from patients if reimbursement has been denied. All this means that the supply of patients is largely controlled by managed care, limiting many therapists from choosing to stay out of plans and survive. In addition, lack of parity means less reimbursement for psychotherapy for out-of-network providers, as well as those in the networks. Medicare is a case in point. The program sets a fee for individual therapy ($98.98 a session in New Jersey), which seems to decrease every year (it was $108.42 in 2006). Medicare pays one-half of that fee, with the patient paying the rest. The therapist cannot accept more than this set fee. If a patient has secondary insurance, this may be used for the co-pay. However, if the therapist does not accept Medicare, the secondary insurance will not pay anything. So, if the patient had been paying $120 per session, 80% covered by insurance, and then goes on to Medicare based on age and employment status, the therapist gets a fee reduction. Also, the patient who had been paying $24 per session, now has a co-pay of $49.49, unless the secondary (the former primary insurance, now secondary) pays. If not, the patient gets a fee increase, but the therapist gets a decrease regardless. Medicare also restricts the disorders covered, though not as extensively as other forms of managed care.

A replacement of cultures has occurred in regard to psychotherapeutic services. The managed care culture has replaced the psychoanalytic culture as the treatment norm. It has become increasingly difficult for patients to understand the potential value of intensive, frequent, long-term therapy for which they will have to pay significant amounts. Although psychoanalytic concepts, as defenses, unconscious motivation, and many others, are accepted by the society and frequently used, often by other names, by alternative therapeutic procedures, psychoanalysis is out of fashion and on the road to reimbursement oblivion. For example, long-term analysis is not currently listed in the American Psychological Association’s list of empirically-supported interventions.

Managed care has been able to control the definition of medical necessity, thereby controlling the disorders qualifying for treatment, as well as the duration of treatment. The norm is brief behavioral therapies, with symptoms targeted and fees limited. This is what patients have come to expect. The effect has definitely limited therapists’ incomes, and it has particularly interfered with psychoanalytic practice. In addition, due to these restrictions, therapists in managed-care plans have to put in more hours to equal previous income levels. They work more to earn the same or less.

This reversal of fortune is bad enough, but there is more to come. Talk therapies have been about as restricted as they can be and still remain alive, and fee reduction has taken its toll. For managed care companies to retain their high level of profitability, the next step is to give priority to drug therapy. Psychotherapy as it is now conceived would then be replaced by medication. This would keep psychiatry functioning, although limiting what psychiatrists do, but the other professions linked to the psychotherapeutic field would play a very limited role in treating patients. The likelihood would be that their services would not be considered medically necessary. Garguilo (2007, p.25) refers to the “disappearing profession” due to the increasing lack of cultural emphasis on “sensitivity to interiority.” Managed care pushes people to avoid an internal search as a useful method to explore and improve the self. Their likely replacement is medication because it is cheaper and quicker as a method of relief, but it is certainly not a cure, nor does it help people learn who they are or who they can be.

 
Conclusions

Mental health treatment can be viewed in terms of three levels, need, gain, and possibility (Herron & Javier, 1998). Managed care recognizes the first level primarily because neglecting it interferes with life functioning to the point that the person is perceived as ill. Treatment then becomes medically necessary. Gain builds on the first level, indicating and facilitating improvement. This gets some acknowledgment in terms of insurance and social support, but that aid is diminishing. The idea that most people suffer psychic distress at various times in their lives and could benefit from psychotherapy is no longer a popular social concept. The level of possibility, maximizing people’s potential, appears to have disappeared from the radar screen of support, although some individuals continue to consider its pursuit a worthwhile investment.

Insurance coverage, and its derivative, managed health care, have become cultural forces that foster a restrictive norm for both consumers and providers. There is a significant need to alter this culture through education and legislation to provide more appropriate support for all levels of treatment.

 
References

Alperin, R, M., & Phillips, D.G. (Eds.) (1997). The impact of managed care on the Practice of psychotherapy. New York: Brunner/Mazel.

Cummins, N.A., O’Donohue, W.T.. & Ferguson, K.E. (Eds.) (2002). The impact of medical cost offset on practice and research. Making it work for you. Reno: Context Press.

Garguilo, G. L. (2007). The case of the disappearing profession. Psychologist- psychoanalyst, 27, 65,69.

Helfmann, B. (2007). Medical necessity. Why fees are stuck. New Jersey Psychologist, 57, 9.

Herron, W. G. (2001). The effects of managed care on psychotherapists. Journal of Psychotherapy in Independent Practice, 2, 23-37.

Herron, W. G., & Javier, R. A. (1998). Mental disorder and its treatment:: Social and political implications. In R.A. Javier, & W.G. Herron (Eds.), Personality development and psychotherapy in our diverse society, (pp. 657-678). Northvale, NJ: Aronson.

Kihlstrom, J.F. (1999). A tumbling ground for whimsies? Contemporary Psychology, 44, 376-378.

McWilliams, N. (2007). Diagnosis and its discontents. Psychologist- psychoanalyst, 27, 1-3

 
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