Psychiatrists Hope Payment Increase Signals New Trend

Blue Cross and Blue Shield (BCBS) of Minnesota says it will increase payment for psychiatric services by 20 percent a year over the next three years in an attempt to improve access to mental health services in the state.

The move has been hailed by psychiatrists, the Minnesota Psychiatric Society (MPS), and APA leaders as a welcome first step toward addressing what all agree is a complex problem of access in Minnesota and across the nation.

“Increasing compensation for psychiatrists is overdue and is a critical piece in solving the access puzzle, and [the move by Minnesota BCBS] appropriately recognizes the role of psychiatrists as key physician specialists,” said Irvin (Sam) Muszynski, J.D., director of APA's Office of Healthcare Systems and Financing.

Muszynski said it did not appear that the move represents a national trend, either among other state BCBS plans or insurance companies generally. A spokesperson with the national headquarters of BCBS said the organization had no information on whether other state plans—which operate independently of each other—were considering such an increase.

The rate increase in Minnesota applies to all psychiatry specialties, including child and adolescent psychiatry. However, it applies only to clinicians in individual and small group practices; the state's large health system networks—such as the Mayo Clinic and Park Nicolett—negotiate contracts separately and typically receive better rates.

Matthew Eastwood, Ph.D., director of behavioral health for BCBS of Minnesota, told Psychiatric News that psychiatrists will be able to bill at the higher rate for consultations with primary care physicians.

“We know that a lot of people with mental illness are being seen by primary care physicians,” he said. “There is a consultative role for psychiatrists to play in this, and we are trying to build in incentives to make it a viable option for psychiatrists.

“We know that in and of itself this will not solve the access problem, but we think it is a step in the right direction. There are a number of issues that need to be addressed regarding the entire mental health system, but we are hoping that by reimbursing psychiatrists better for their role as specialists we can attract more psychiatrists to the state and attract medical students to the practice of psychiatry.”

MPS officials said that the move represents the fruit of years of efforts by groups in Minnesota to address access problems in the state.

The announcement of an increase in reimbursement by BCBS comes a month after Minnesota Gov. Tim Pawlenty announced a mental health initiative—including $109 million in new and redirected government investments—to transform the way the state provides mental health services and improve mental health care and treatment for children and adults.

“MPS thanks BCBS-Minnesota for this increase in psychiatric reimbursement, a positive first step in improving access to psychiatrists and to allowing psychiatrists to take more time with patients when necessary,” the organization said in a statement following the announcement. “More definitive improvements will only come if more payers follow their lead and if we work together to define what high-quality, efficient psychiatric care should look like.”

The MPS statement also noted that Medica, another Minnesota insurer, has increased child and adolescent psychiatry reimbursement by 30 percent.

Eric Larson, M.D., president of MPS, said he hopes that other insurers follow suit.

“This is a major advance,” he said. “It gives BCBS the moral high ground for recognizing that money is a factor in the access problem. We hope their competitors will follow suit. If only one insurance company does it, this new level of reimbursement is not going to change things.”

Larson echoed many others in saying that better reimbursement is far from the only thing necessary to fix problems of access in Minnesota. But he especially welcomed the increased reimbursement for the effect he said it could have on psychiatrists' ability to spend more time with patients. Many patients are being seen for 15-minute medication checks and nothing more, he said.

“Money has driven the decision to do that,” Larson said.“ By being better paid, we should have the flexibility to spend more time with patients.”

At least one psychiatrist was much more circumspect in predicting the effect an increase in reimbursement would have on access.

MPS President-elect Roger Kathol, M.D., said that BCBS largely serves patients in the private sector, but the real crisis of access is in the public sector. He said he doubted that psychiatrists in private practice, some of whom do not see publicly insured patients, and some of whom serve only self-paying patients, were likely to open their practices to public-pay patients because of the move by BCBS.

Kathol is not in private practice but is founder and president of Cartesian Solutions, a health care consulting firm in Burnsville, Minn.

“I'm not saying this isn't a good thing,” Kathol said.“ At least it improves the equity of reimbursement, but I don't think just paying psychiatrists more is going to improve the needs of the system.” ▪