Psychotherapy Finances

As we noted in an item published a few weeks ago, the National Association of Insurance Commissioners (NAIC) approved recommendations on the medical loss ratio issue — how much of their revenues insurance companies should be required to spend on actual patient care.

Insurance companies have been complaining about it ever since, and approval of the regulations did not put the matter to rest.

The controversy is not so much the number, which is 80% for small-group plans and 85% for large-group plans, but what services should be included in that figure. The insurance industry, for example, wanted the cost of agents selling policies to be considered a medical cost.

The NAIC said no, and its position has been backed by Health and Human Services Secretary Kathleen Sebelius. Plans that go over the limit will have to issue rebates to the public starting in 2012.

But now two states, Florida and Iowa, are preparing to ask for a waiver on this provision through 2014, when the full weight of the new law goes into effect. And of course there’s now considerable reason, with Republican control of the House, for insurers to hope that the provisions like this one won’t go into effect at all.

Similar requests for waivers are under consideration in Maine, South Carolina and Georgia, according to Wednesday’s St. Petersburg Times.

The Florida Office of Insurance Regulation (OIR) believes that the medical-loss ratio provision would be “disruptive” to the state’s insurance industry, and that it would put smaller companies out of business.

The South Florida Business Journal said on Tuesday: “The OIR has expressed concern that these ratios could destabilize the marketplace because smaller companies might not be able to meet the requirement. It also is worried that insurance agents could get squeezed out of the market because their fees aren’t considered medical costs.”

And there would be a profit squeeze, to be sure. One Florida subsidiary of United Healthcare, according to the Times, would be forced to pay more than $38 million in rebates to 119,000 state policy holders under the provision.

The Obama administration has been granting waivers to some non-compliant health plans, such as those offered by McDonald’s. The question is, will officials continue to negotiate, or begin taking a more hard-line stance?

The U.S. Senate passed a one month “doc fix” Thursday, kicking the looming 23% cut to providers down the road again providing the House agrees when lame duck members return from their Thanksgiving break.

Senate Finance Committee leaders Max Maucus, a Democrat, and Charles Grassley, a Republican, said both parties would work together to come up with a year-long fix for 2011. This year has marked by short-term fixes that has kept providers guessing about whether draconian cuts will go into effect.

Baucus said in a statement: “Once signed into law by the President, it will mean that seniors and military families are spared the threat of a lapse in care. The next step is moving on to finding a yearlong extension before this fix runs out.”

The legislation also extends a 2.2 percent update in payments through December 31.

But even if the Medicare payment issue is settled for the longer-term, it’s clear that major changes are ahead in the health care delivery system. The more serious work of trying to make the system more efficient, and less costly in terms of the federal budget, begins when the new Congress takes office in January. A plan floated by Rep. Paul Ryan, R-Wisconsin, would give vouchers to seniors who would purchase their own health care plan in the private market.

Health care costs have been growing at around 8% per year, which is high when you remember that the overall inflation rate has been close to zero over the last 18 months.

In our interviews with managed care officials and other health care analysts, the idea of case rates is getting more attention – a provider would get a certain pre-established fee for seeing treatment to its end.

Health care companies are also pushing medical integration under a “medical homes” model of care delivery. Physicians, nurses and mental health professionals would work under one roof and bill for their services jointly.

This wouldn’t preclude health care providers from establishing loose, informal relationships in which each entity could do their own billing. But one managed care official we spoke with predicted that the traditional 50-minute therapy session will probably not be the model for behavioral health services in the future.

Psychotherapy Finances will be addressing these and other issues in our upcoming special report on the future of managed care.

There are museums for baseball, football, and rock and roll. There’s a spy museum in Washington, DC. There’s even a polo museum in West Palm Beach, FL. Why not a museum for psychology?

Well, now there is one. It opened recently in Akron, OH, and is free to the public.

The Center for the History of Psychology showcases relics and memorabilia you won’t see anywhere else. For example: the simulated shock generator used by psychologist Stanley Milgram in his studies on obedience to authority; the air crib used by B.F. Skinner; and the prison uniforms from the Stanford Prison experiment.

You’ll also see the “Bobo doll” used in the early 1960s by psychologist Albert Bandura to find out whether children learn aggressive behavior through imitation. The kids watched an adult punch and kick the doll, then watched how the children interacted with it. Kids who had seen adults hit the doll were twice as likely to exhibit aggressive behavior.

“Psychology is a discipline in which everyone has an innate interest,” says Dr. David Baker, Margaret Clark Morgan Director of the Archives of the History of American Psychology and professor of psychology. “The CHP will provide an opportunity to showcase the wealth of treasures we have in our collection.”

The museum is hosted by the University of Akron.

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Salaries for mental health professionals is a big issue these days for people in the field and those trying to launch a career. So it was a bit disheartening for some to see an ad in the November issue of NASW News for a clinical social worker at the California Department of Mental Health.

Salary for the position: $5,687 to $6,889. No indication on whether this was part-time … or whether annual salaries in California had sunk to a new low.

We called Jim Snyder at the NASW News and pointed out that the ad has left people guessing. He looked at it and said: “I see what you mean. It’s been running like that every month but we haven’t heard anything about it.”

A contact we were given at the California Department of Mental Health didn’t return our call. But we did find the position posted on the Web with the note that this is a starting monthly salary.

A master’s degree is required, of course. Still, we’ve seen other positions around the country with starting salaries as low as $26,000 – and hourly wages starting at $15 an hour.

Psychologists, psychiatrists and clinical social workers are closely watching events unfold in Washington as they pertain to Medicare fee cuts and the so-called “doc fix” that has so far postponed the reductions, but only temporarily.

The way things stand now, a 23% fee cut is on the horizon starting December 1, since the present Congress restored funding retroactively from January 1 of this year – but waited until summer to do it.

The talk has been about a more permanent fix, at least averting cuts through 2011. But that’s up in the air now that a large Republican majority is about to take over the reins in the House in January.

The lame duck Congress will probably convene on November 15, and lawmakers could postpone cuts again until February or March. But the ball is clearly in the court of the new majority and, as the incoming crop of House members have made clear, repeal of the health care law tops their agenda.

A recent Medscape Medical News analysis suggests that the new legislators may use the doc fix as leverage in order to pass an anti-reform bill, or at least make significant changes to it.

The cut on the table by the time January rolls around, by the way, will be 29.5% because an additional 6.5% reduction hits in 2011. So this is not small potatoes. Physicians and mental health care providers (psychologists, clinical social workers and psychiatrists are Medicare eligible), are worried and angry.

In a new Congress eager to cut programs and budgets, convincing members to approve a measure that would cost as much as $330 billion (Congressional Budget Office figures) in a long-term fix through 2020, may be next to impossible.

Republican House and Senate members have been demanding cuts to off-set additional expenditures, and this is where repeal of health care reform comes in. But, as Senate Republican leader Mitch McConnell told the Heritage Foundation in a well publicized speech this week, President Obama is unlikely to sign such a compromise.

It looks like a stand-off is clearly on the horizon – one of many on a multitude of issues over the next two years.