National Coalition of Mental Health Professionals and Consumers, Inc.

an educational foundation and advocacy organization serving mental health consumers and professionals

Reimbursement for Psychotherapy and True Parity Versus Pretend Parity
Ivan J. Miller, Ph. D.

As a result of my work in health care reform, my concern about reimbursements has greatly increased. In discussions about major reform with reform advocates and legislators there are few issues about which everyone is aware and in agreement. Two issues that have almost universal acceptance are:

1.      Mental health must be included in health care reform and there must be parity. This position is often articulated before the others in the room know that I am a psychologist in addition to someone concerned about the design of the future health care system. It is expressed by everyone, not just representatives of mental health.

2.      Primary care physicians and nurses are underpaid, and health care reform must address the reimbursement for primary care. Sometimes, other professions such as physical therapists are included in the underpaid group, but mental health professionals have never been included. 

Considering how badly our practices are suffering, it is amazing that I have not encountered anyone who has the slightest clue that there is a reimbursement problem in mental health. Somehow, other professions have found a way to get the message out, and psychology has not. 

Within psychology group discussions, there are two myths that keep us from effectively addressing the reimbursement problem. First, there is the myth that we have not had an increase in reimbursement for twenty years because of some natural market force. Recently, as part of my health care system research, I was placing my family medical bills, reimbursements, adjustments, and out-of-pocket expenses on an Excel worksheet as an example of one consumer with high medical expenses. In the process, I realized that my physical therapist had a 3.7% increase in reimbursement from Anthem Blue Cross in the middle of the year. She has a bachelor’s degree and an office set up that is no more expensive than a psychologist’s office. She is reimbursed at $72 for a 25-minute session, and Anthem pays a psychologist $72 for a 50-minute session. She is on the medical track where market forces determine her reimbursement, and there are periodic increases. 

Other facts indicate that managed mental health care is a special market manipulation that artificially lowers reimbursement. The Lewin Group analysis of health care reform proposals in Colorado indicated that in hospital reimbursement, insurance companies paid 164% as much as Medicare paid for services. The pattern in health care is that market forces result in insurance paying more than Medicare. In the market manipulation of mental health the opposite is the case. Insurance pays around 20–30% less than Medicare. 

The conclusion is that we have “Pretend Parity.” Parity is coming everywhere, yet there is a special network of managed mental health care that is manipulating the market and suffocating mental health providers.  

The second myth is that those master’s degree professionals are causing the problem, and if we just get recognition for our doctoral degree and limit their scope of practice we will thrive. Throughout the system, psychologists are consistently paid more than master’s degree professionals. However, their pay is atrocious. They use a second job to finance their private practices more often than psychologists. Their pay is bad because of the market manipulation of mental health services just the same as psychologist’s reimbursement. The only part of mental health that is doing okay is psychiatry. I think this is because there is a psychiatrist shortage, and they have somehow managed to be considered part of medicine rather than mental health. Below are some of the stats from U.S. Bureau of Labor Statistics, 2006 website that demonstrate how dire the reimbursement problem is.

• median annual earnings of mental health and substance abuse social workers was $35,410. http://www.bls.gov/oco/ocos060.htm

• Marriage and family therapists median was $34,660 http://www.bls.gov/oes/2000/oes211013.htm

• Psychologists median for offices of mental health practitioners $69,510 http://www.bls.gov/oco/ocos056.htm

• Median hourly wage for carpenters is $17.39, and if this is converted to annual salary it is $36,171 http://www.bls.gov/oco/ocos202.htm

• Auto mechanics at car dealers, median is $18.85/hr., converted to an annual salary is $39,208, http://www.bls.gov/oco/ocos181.htm

• Physical therapists (the majority in this group are employed by a group or hospital and not in private practice), median, $66,200, http://www.bls.gov/oco/ocos080.htm

• Nurses, median $57,280, http://www.bls.gov/oco/ocos083.htm

• Family Practice physicians with over one year in practice, $156, 010, http://www.bls.gov/oco/ocos074.htm

• Psychiatrists mean annual income is $147,620, http://www.bls.gov/oes/current/oes291066.htm

As a comparison, a psychologist in Colorado with a practice of 30 hours a week of psychotherapy, working a 48-week year, under 2009 Medicare Rates, would have gross receipts of $131,357, and under Anthem Blue Cross rates would have $103,680 in gross receipts. My annual business expenses are $42,000. If I worked for Medicare exclusively, I would have an annual income of $89,357, and if I worked exclusively for Anthem, I would have an annual income of $61,680. Fortunately, while I do believe in public mental health care and consequently accept Medicare, I have a managed-care-free practice. 

Master’s level practitioners are here to stay, but they are the victims of the managed mental health market manipulation, not the cause. It is important for public education to maintain psychology as a doctoral level profession, but this does not solve the reimbursement problem. 

I think that the low reimbursement issue would benefit from an open discussion.  I do not believe discussion of the problem and strategies to fix low reimbursement raise antitrust or 501(c)(3) concerns.  I am not advocating either group price fixing or boycotts of companies.  I believe that mental health professionals can address these issues with surveys and public education that are in the same spirit as the pursuit of “true parity” instead of “pretend parity.”   

February 15, 2009 

Ivan J. Miller, Ph. D. is a Licensed Clinical Psychologist is Colorado and Chair of the Interdivisional Task Force on Managed Care and Health care Policy of the American Psychological Association He can be reached at Flatirons Medical Arts Building, 350 Broadway, Suite 210, Boulder, Colorado 80305; (303) 499-3888; Fax 494-3837