Calif. Physicians See Perils in Insurance Reform Plan

A universal-insurance proposal for California that Gov. Arnold Schwarzenegger (R) unveiled in January has raised concerns among psychiatrists about the potential threat it poses to maintaining mental health care parity and its call for scope-of-practice expansions for psychiatric nurse practitioners.

Schwarzenegger's sweeping plan, which would require all Californians to obtain insurance and would subsidize the poorest state residents, could, however, have a beneficial impact on all state residents, especially the 6.5 million who lack health insurance. Many in this category are likely to have untreated mental illness and could benefit from the access to care that the proposal would provide.

“To the extent that people who don't have access” gain such access through a reformed system, then the proposal “is a good thing,” said Randall Hagar, director of government affairs for the California Psychiatric Association (CPA).

Like many health care proposals, however, the California plan has devils lurking in its details, some of which trouble physicians in general and psychiatrists in particular.

Scope-of-Practice Battle Could Erupt

Chief among concerns raised by the CPA is the portion of the proposal that calls for expansion of “lower-cost models of health care delivery,” such as retail-based medical clinics, and scope of practice for nurse practitioners and physician assistants.

Hagar doubts physician assistants will clamor for scope-of-practice changes since few of them are mental health clinicians, but there are indications that psychiatric nurse practitioners may want more independence from physician oversight.

“We want competent nurse practitioners to help with the delivery of quality mental health care, but it's a whole other kettle of fish if they become independent practitioners,” Hagar said.

Psychiatric nurse practitioners are now required to practice in collaboration with physicians. Standardized procedures specify the circumstances in which physician consultation is necessary.

Another area of concern is that business groups critical of the state's mental health insurance parity law will use the insurance expansion to argue for limiting the scope of parity coverage for mental health care. In recent years some business groups have attacked the current requirement for coverage for anorexia and bulimia, for instance.

The governor's plan calls for a review of “health/plan benefit, provider, and procedural mandates in order to reduce the cost of health care,” which could apply to parity requirements. State law requires health care service plans and disability insurance policies to provide coverage for the diagnosis and “medically necessary” treatment of severe mental illnesses of a person of any age, and of serious emotional disturbances of a child, under the same terms and conditions applied to other medical conditions. California law defines “severe mental illnesses” as schizophrenia, schizoaffective disorder, bipolar disorder, major depressive disorders, panic disorder, obsessive-compulsive disorder, pervasive developmental disorder or autism, anorexia nervosa, and bulimia nervosa.

Hagar emphasized that there have been no specific indications that either concern will arise during consideration of legislation to implement the governor's proposal, but the CPA and the California Coalition for Mental Health plan to follow the legislation carefully in case moves to limit parity are introduced.

Costs Worry Physicians

The proposal has drawn opposition from physicians because they would bear part of the cost of the program through a 2 percent tax on their gross revenues. The California Medical Association described the 2 percent charge as a tax on patients because the cost would likely be passed along to them.

“Physicians are going to be subsidizing care, and that includes psychiatrists,” Hagar said.

The governor justified the added expense, arguing that the existing health care system, which already covers the health care expenses of the uninsured, amounts to a “hidden tax” on California health premiums that drives up their cost by 10 percent. He cited a recent report by the New America Foundation that estimated the “hidden tax” adds $1,186 to family health insurance policies and $455 to individual policies.

Hagar said psychiatrists have raised questions about the new physician levies but focused their concerns on whether it would result in improved patient care.

One improvement the governor touted for physicians under the proposal is a“ significant” increase in Medi-Cal rates, which is designed to encourage greater clinician participation in the state's Medicaid program. Although details of the program's potential rate increase were limited, state and federal funding for the increase would total about $4 billion, according to the governor's proposal.

Hagar said that the additional 2 percent charge on physician income likely would wipe out the proposed financial incentive aimed at encouraging more physicians to participate in Medi-Cal.

“There's a lot of concern that the good won't outweigh the bad with this proposal,” he said.

Numerous alternative coverage options have been proposed in California in recent years that range from regulation-tightening measures on insurance companies to a bill that would provide universal, affordable, comprehensive health insurance for all Californians, which the legislature passed and the governor vetoed last year.

The California governor's proposal is posted at<http://gov.ca.gov/pdf/press/Governors_HC_Proposal.pdf>.▪