The Troubles with Mental Health Insurance
How Insurance Companies Control Mental health Services
"What makes you think your life is any of your business?"
- Thom Negri -
The following article intents to show how the greed and power driven health-insurance industry, a major group of corporations that profoundly influences and shapes the world we live in – has taken control over vital aspects the mental health field. The focus is on the methods employed to accomplish their goals and how the practice of psychotherapy was not without intention obstructed in the process. The effects on the values of society and culture as a whole are explored.
"Who is your doctor?" the therapist asks the client in the intake interview.
“Doctor?" the client responds with incredulity, then asserting sarcastically, "I don't have a doctor, I have an insurance company!" His striking response reflects the changes in the medical field that have been taking place over the last two decades. How did the medical field and in particular, the mental health field get here and why?
In the late eighties, Eli Lily, one of the big pharmaceutical companies, brought Prozac, to this day one of the best-selling antidepressants, on the market. Clever scientists looking to increase pharmaceutical revenues had come up with the debatable (but financially tremendously successful) hypothesis that all mental disorders or problems, like anxiety or depression, could be understood as chemical imbalances in the brain — and therefore are seen as medical illnesses.
Until that time, only psychotic conditions like schizophrenia or manic depression had been determined mental (medical) illnesses, although that was seriously disputed in the sixties and seventies by what was called “anti-psychiatry,” represented by people like Thomas Sasz, MD or R.D. Laing, MD. In fact, the latter defined “insanity” as a “perfectly rational adjustment to an insane world.”
With psychiatry in this text is meant the general representation of the field by and through the APA (American Psychiatric Association) exemplified by the process of developing
There are plenty of excellent psychiatrists in the field who do a great service to and for their clients, many of them using psychotropic drugs very wisely to help their patients.
However, psychiatry as a whole, having always been the stepchild of the medical field, has never enjoyed the same reputation and status as their counterparts from the other medical disciplines has been privileged to. It was happy to jump on the bandwagon of redefining psychological problems as medical illness. The revised view and the new medications seemed to open up a lucrative shift of psychiatric work to predominantly prescribing drugs to patients.
By giving up the psychotherapeutic part of its service it had provided in the past, it abandoned its Freudian-based understanding of mental disorders. Psychiatry was now defined as a neuroscience-based approach to healing mental illnesses, in spite of the fact that the science behind this new theory was and is at least questionable.
Even the soundest scientific studies of the efficacy (double blind studies) submitted to the FDA of the new drugs have evidenced that a very high percentage, in some studies more than two thirds, of the effect is based on the placebo effect. In other words, the effect of the new drugs barely outperformed the effect of a placebo. Since the placebo effect is a purely psychological phenomenon, the results expose a large number of the mental problems treated with any of the new drugs are truly of psychological nature. The rest showed either marginally positive effects in some cases or no effect or mild to serious side effects, including triggering manic episodes. To this day, all the research of those new drugs including what was once heralded as the “new generation of antipsychotics” have never shown much better results in subsequent scientific studies than those initial ones.
But that stopped neither the psychiatry nor the pharmaceutical industry from pushing the new theory as proven fact and with that, the new drugs. Taking advantage of a susceptible, uncritical public they began to push the placebo effect by engaging in massive advertising campaigns for the new “medicine,” creating the new “Myth of the Chemical Cure”( J. Moncrieff). The new age of the pseudo- neuro-chemical Self-definition had been rang in. (See also: "The Dehumanization of the Mental Health Field"; "The Business with Mental Health" and "Depression: Illness or Existential Crisis")
Regarding the background of these new developments: Psychiatry spoke of a paradigm shift and parity between physical and mental illnesses was soon (in 1996) legally established. Health insurance companies were now required to reimburse for treatments for mental illnesses in the same way they had to for physical illnesses.
But it wasn’t only psychiatry who promoted this new development. The professional organizations of psychologists, social workers and mental health counselors did so as well. They hoped and believed that if their services would be reimbursed by insurance companies equal to the way medical services were, they would, if not improve, at least secure their income. It’s doubtful at that time they realized that they would have to compromise, if not to some extent betray, the integrity of their profession in order to get access to insurance reimbursements for their services.
The Obstruction of Psychotherapy
The shift in the mental health field certainly caused the insurance companies great concern, given the length of psychotherapy and the high number of hours to pay for.
Psychotherapy here is understood as a psychodynamic, process-oriented, longer to long term (2-5 years) form of therapy that aims at resolving intrapsychic conflicts as well as integration of body, mind and self in order to increase specific and general functioning, and emphasizing self-responsibility, self-mastery and self-determination
Facing the new legal obligations could cost them large amounts of money and diminished profits, they soon realized in the light of the new concept that mental health problems are supposed to be illnesses that the new medication treatments might turn out to be cheaper than psychotherapy.
If the insurance companies could successfully denounce psychotherapy as an inefficient treatment and deny its efficacy, then counseling or psychotherapy could be seen as nothing but an adjunct to medication treatment. Then reimbursement could be seriously limited and they could stem the tide of the new emerging costs to them. They just had to get control of the field.
So, in the nineties they began an attempt to prevent losses and to maximize profits by experimenting with managing mental health benefits. Given that mental health providers other than psychiatrists and psychologists had in the past not been legally entitled to the same level of reimbursements as physicians, and that they were still struggling with the confusion caused by the new allegedly scientifically proven concept of medication treatment, the insurance companies probably did not expect many repercussions from mental health providers or psychotherapy clients.
Many of the so-called cost saving measurements, strategies and policies practiced today emerged from those initially experimental implementations of "Managed Care.” (It’s not without irony this term actually constitutes an oxymoron.)
The Invention of “Provider Networks”
Insurance companies began recruiting therapists to build "provider networks,” basically contracting therapists to work by guidelines and a fee schedule they established. They let them believe that participating in this new managed care system was the only way to get, however poorly, reimbursed for services. Under the guise of assuring high standard of care, providers were coerced into having to re-credential themselves with each insurance company in order to be accepted in a network, all without regard to the fact that they were already licensed by the state to perform these services. Cynics assumed that this re-credentialing process was basically designed to screen out providers who most likely would be compliant with insurance demands.
In return for submitting to their requirements to be admitted to their in-network provider list, the insurance company would make those lists available to prospective patients, and providers were promised a better referral flow for their practices and could secure their “business” in that way.
By forming provider networks, they have effectively limited the insured's choice of therapist because now their customers have to pick one from the in-network list, if they want to get reimbursed for services received. A recommendation from a trusted friend might not work out anymore if that particular therapist is not in the insurance plan’s network. (In California, for example, only half of all psychotherapy providers are enrolled in an insurance network today.)
If a client has been in therapy already with a provider, but his plan has changed by circumstances beyond his control and the therapist happens to not be in the network of the new insurance plan, it doesn’t matter he/she already has had an established working relationship. If the provider is not in the network or the new plan has no "out of network" coverage, the client most likely has to find a new therapist.
The one factor common to all forms of therapy that makes the biggest difference in the client’s life, (according to a multitude of research studies) is the relationship between client and therapist. This established fact — that trust in the provider and a secure relationship is an essential ingredient for body and mind to heal itself —was and is apparently irrelevant to the insurers. What seems to count is that the profit of the insurance company has increased by lowering reimbursement for mental health treatment.
Health insurance companies advertise themselves as caring about their customers’ well-being. But who is really served by "provider networks?” How is a client or patient served by an underpaid provider stressed by having to deal with a complicated insurance bureaucracy only to get poorly reimbursed for services rendered?
Cost Saving Strategies?
They adopted a wide variety of measures — some of them experimentally — to save and/or limit costs while investing in a huge "care managing" bureaucracy. All too often, treatments were— and still are — undermined and sabotaged by those steps taken by the insurance companies with complete disregard for the client's clinical needs. Much harm has been done to clients in treatment — e.g. worsening of depressive syndromes and increase of anxiety and stress, based on the threat of having one's treatment not paid for or having to give up a form of therapy that worked for the particular client.
But it’s not only clients in treatment that have been hurt by the ruthless implementation of these policies and so-called "cost saving" strategies. Damage was done to the mental health field as a whole and many therapists suffered increased stress, experiencing not only a threat to their livelihood, but also to their professional integrity.
Quite a few of those "cost cutting" strategies and measures have been refined and are still practiced, advertised as attempts to insure high quality of treatment. They still cause many therapists considerable stress and extra work (paperwork and/or time spend on the phone with managed care companies) without being reimbursed for it.
Pushed by psychiatry's and the pharmaceutical industry's redefinition of psychological problems as medical illnesses, psycho-therapists, psychologists, mental health counselors and clinical social workers have been forced to participate in the medical field. They have to bend to absurd requirements, like defining a psychological problem in medical terms. Therapists have to justify their work with their clients beyond establishing a diagnosis to the insurance companies. Under the threat of denying reimbursement, they require therapists to either submit so-called “outpatient treatment reports,” without reimbursing the provider for time spent to establish such a report or request outpatient treatment reviews on the phone, coercing the treatment provider to spend unpaid time with a so called “clinical care specialist” from their managed care team, all to prove the treatment is "medically necessary" - not psychologically! – and meets so called national standards of care.
That may sound reasonable, and insurance companies have developed a jargon to make it appear that way. However, given the vagueness of the “standard of care” definition and its false claims, in reality it’s nothing but a method to find reasons to refuse authorization to treat and to deny reimbursement.
A person seeking help for psychological problems is no longer seen as a “client” in charge of her life, her choices, her feelings and problems. The client is no longer seen as a person in conflict with herself and/or the world around her. Now she is viewed as a “patient” suffering from a medical illness — thus now seen as a victim. Defining clients as patients has a disempowering effect on them. They are no longer seen as partners in their therapy, but as passive recipients of treatment. Within that framework, the provider knows better what the patient needs and does not see the client’s treatment as a cooperative effort. This is particularly common in the practice of psychiatry today.
A client’s resistance (unconsciously defending against the anxiety caused by necessary change) is now, in that new medical framework, no longer seen as a clinical issue and as part of the process, but rather as an act of defiance against the expert provider. Insurance companies take advantage of that and refuse payment of services based on issues that commonly occur in the process of psychotherapy, pushing the psychotherapist to further compromise the integrity of his or her work.
Enabling the Medicalization of Society
To undermine psychotherapy further, insurance companies regularly advocate medication treatment — often directly to a client who is involved in psychotherapy — claiming it to be more effective than therapy alone. And that’s in spite of the generally poor showing of efficacy of psychotropic medications in research studies. As a consequence of the demand to define psychological problems in medical terms, it’s become a common practice to routinely request medication evaluation.
Medication treatment has become required for a wide variety of diagnoses by their so called "standards of care,” as it’s seen as a cheaper way to treat the patient. If a patient refuses to get a medication evaluation or to comply with medication treatment, whether it’s because they don’t like the side effects of drugs or don’t like the idea of taking drugs for psychological reasons, insurance companies often threaten to withhold reimbursement, rejecting clinically sound reasoning by the clinician. By doing so, they totally disregard that a client should have the right to decide together with the provider what’s best for them and not have some anonymous entity coerce them to take drugs with questionable side effects and efficacy. Psychotherapy is a process that intends to help the client to self-empowerment and self-determination. Insurance companies’ attitude towards mental health is counter to that intent.
This is not to say medication treatment is not helpful in a variety of individual cases. There have been clients who have experienced a considerable relief from their symptoms and seen an increase in general well-being, and sometimes that kind of result enables the client to do the hard work of psychotherapy better. The point of criticism here is the way insurance company handles and controls mental health treatment.
Unlike medication treatment, the effects of psychotherapy last, more often than not, for the rest of one's life, while problems and symptoms all too often return when people discontinue their medication. Some clients, after withdrawing from a psychoactive drug used with encouragement from a psychiatrist for a prolonged period of time, develop new symptoms they didn’t have prior to taking the drug. Sometimes, they experience frightening, out-of-control symptoms including violent rage attacks, showing their condition has worsened after taking drugs. Psychiatry, as well as the pharma industry, does not only deny or diminish the evidence of serious side effects of long term drug use but interpret outcomes like these as the patient’s clinical need to stay on drugs for the rest of their life.
With the emergence of "parity" and this new framework, insurance companies also began in the nineties to limit reimbursement for cognitive, symptom-reduction-oriented therapy forms - mainly Cognitive Behavioral Therapy (CBT) - only. CBT is a form of therapy that tried explicitly to diminish the importance of the therapeutic relationship. It is basically a sophisticated set of psychological techniques that have shown themselves within limitations to be helpful to clients. However, they falsely claimed those were the only evidence-based approaches and tried to deny coverage for therapy methods aimed at healing the intra-psychic causes of the presenting symptoms and problems.
The fact that psycho-dynamic approaches - object-relations-theory-based-analyses, Gestalt, emotionally focused therapy, mentalization based treatment (MBT) body-centered approaches and other psychodynamic approaches — aimed at resolving unconscious intra-psychic conflicts have proven their efficacy in many long-term studies and in many cases, have shown themselves more effective than CBT or drug treatment, has either been ignored or downright denied.
There are sound long-term studies that show evidence that general health insurance costs go down over a lifetime for people who engage in four or more years of psychotherapy. With long-term, in-depth psychotherapy and its emphasis on individuation and responsibility for one’s life, clients tend to take life-changing steps that, in the long run, reduce their stress levels and lower the probability of symptoms or psychological problems reemerging. In short, people usually choose much healthier lifestyles than they had before they entered therapy. That way, the effects last long beyond completing the therapy.
In spite of that, insurance companies try to limit treatment to short-term therapy under the pretext of attempting to save costs. This isn’t to say short-term therapy or the promoted cognitive approaches are not or cannot be helpful. The issue here is how psychotherapy has been obstructed. Clients who have been diagnosed with a personality disorder or who suffer from the consequences of serious traumatic experiences and are in need of psychotherapy have more difficulties getting insurance to help them to pay for much-needed treatment.
More Troublesome Practices
Therapists are required to work closely with the insurance company in order to get reimbursed for services rendered. While they may be very careful and conscientious about what they reveal, the clients signature, necessary to get reimbursement, gives the insurance company complete access to a client’s medical file. Therefore, confidentiality and privacy are all too often compromised and HIPPA laws that are supposed to protect privacy are basically made a farce of.
Although only so-called “medical information” is allowed to be released, information about the context in which these so-called “medical symptoms” occur all too often needs to be added in order to make sense out of them, so the insurance company approves the treatment as medically necessary. Criteria for "medical necessity" of psychological treatment is generally vague and subject to a wide range of interpretations, so the insurance company can easily justify a rejection of a claim as medically not necessary.
Many insurance plans either explicitly state they only allow for a limited number of sessions regardless of what’s clinically necessary, or the plan states you have unlimited sessions available if medically necessary. But the criteria for that are left intentionally vague and formulated in medical terms, so that psychological problems — what therapy predominantly addresses — barely qualify for reimbursement. This enables the insurance company to practically cheat the insured out of her/his benefits.
Another troublesome practice, a so-called “cost saving strategy”, includes claiming a particular client can be seen less frequently than the therapist and the client have agreed upon in order to get the work done. If progress is slow due to the complicated psychological condition of the client, the interpretation is that it’s a chronic condition and therefore, further therapy useless, so less sessions or needed. However, if the opposite happens and progress is very good, the same claim is made. Since the client has gotten better, meaning symptoms have improved, the client does not need any further therapy and could be discharged.
To undermine and discourage psychotherapy further, insurance companies engage in a variety of activities that make providing treatment more frustrating and difficult:
- Giving incomplete or inaccurate information about the insurance plan to
the client, which leads to difficulties when trying to get reimbursed for services rendered.
- Demanding that either a prospective provider or the insured gets authorization prior to treatment. In trying to get an authorization,
Providers all too often spend hours on the phone - being put on hold or
getting lost in inadequate decision-trees. As stated before, all without any
reimbursement for the required time.
- Denying rightful claims on bureaucratic grounds.
- Delaying reimbursements.
- Lowering reimbursement rates from one week to another without informing either the client or the provider.
- Requesting audits of "medical" records, delaying reimbursement by doing so.
- All too often only authorizing a too small number of sessions at a time, which usually does not correspond to the clinical information provided.
- Requesting to renegotiate agreed upon fees for services that have already
been provided and by doing so, delaying payment to the provider.
- Using telephone answering systems that lead to nobody, which
is in particular distressing when there is a claims issue that a
machine can't answer.
All of these at best questionable practices lead to the conclusion that the whole of what insurance companies do to control treatment and to limit their expenses amounts to evading responsibilities they have been contracted by their customer to cover.
However, it’s understandable insurance companies want to control their costs. In recent years, quite a few insurance companies have resorted to selling plans with high deductibles, which, in many cases, basically amounts to no insurance coverage for psychotherapy or mental health services anymore. And yet they still invest a considerable amount of funds into administering their cost control measures, including those ways outlined above, rather than simply reimbursing a percentage of what’s called “a reasonable customary fee” and leave the fee negotiation up to client and therapist.
There are numerous, well-qualified licensed therapists in the field who are willing to work out reasonable fee agreements with their clients. That way, insurance cost would be limited and they could save themselves this huge investment in the managed care bureaucracy. They employ a large mental health staff of psychiatrists, psychologists, social workers and professional counselors. One has to wonder how that’s saving them money — or if there are other interests involved. As stated before, they certainly push drug treatment regularly when reviewing outpatient treatment reports submitted by providers.
Supporting the Pharmaceutical Industry and Psychiatry
By asserting that medication evaluation and medication prescription are a medical necessity, even if a well-qualified provider who knows the client personally disagrees, they make reimbursement dependent on the patient receiving drug treatment as well. They claim that this seems to be a cheaper path to symptom reduction for the patient than the sometimes slow process of psychotherapy. That this policy often interferes with the therapeutic process itself does not seem to matter.
But this practice certainly supports the psycho-pharmaceutical industry as well as psychiatry, who together have taken control over the mental health of society and turned it into a huge profit-making market. It's not a person's personal well-being that’s the aim of it all anymore. Instead, as usual these days, it’s profit, power and influence.
Their insurance policies and strategies have certainly compromised the integrity of the practice of psychotherapy.
Psychotherapy aims at true individuation emerging from compassionate self-acceptance, self-empowerment and integration. Interfering with its practice and purpose ultimately serves not only the insurance company themselves, but psychiatry and the pharmaceutical industry as well. A greed driven capitalistic economy is better served by the promotion of psycho-pharmaceutical products and by the fostering of commercialized compensatory consumer individualism than by the kind of individuation and values psychotherapy pursues.
The general, thoughtless acceptance of the public of the idea that human problems are medical illnesses has certainly been enormously profitable for the psycho-pharmaceutical industry over the last 25 years. Ironically, it fits all too well into the greed-driven economic process, which is so often the cause of the stresses under which all too many of the mental psychological problems emerge.
In the larger context of the social process, psychiatry in cooperation with the pharmaceutical companies has taken an ever-increasing role in social control and with that, gained a lot of power and influence. Insurance companies’ advocacy of drug treatment and their discouragement of psychotherapy amount to an enabling and supportive role of that function. And in the end, that might be the aim of it all.
However, some improvements have emerged over the last decade. Since many insurance companies significantly raised their deductibles on their plans or lowered their reimbursement rate to a minimal amount, a few also backed somewhat away from micromanaging psychotherapy. In some cases, it's easier to get needed treatment approved and more hours of treatment are authorized for any given outpatient treatment report.
Additionally, in recent years, some other forms of therapy have finally been approved for reimbursement by some of the insurance companies.
EMDR, (eye movement desensitization and reprocessing), a well-researched and promising form of trauma treatment, has recently been recognized as reimbursable by some insurance companies. Some are still excluding EMDR from the list of approved treatments, in spite of the overwhelming amount of evidence for its efficacy.
DBT is a well-researched and effective method to teach clients with affect regulation problems the skills needed to manage their out-of-control, emotional reactions to stress. DBT has also been acknowledged as an allowable form of treatment in recent years.
Interestingly enough, relationship based psycho-dynamic, in-depth approaches continue to be discouraged.
To the public, insurance companies try to give the appearance of wanting to insure a high standard of care. However, behind that facade they practice methods that supposedly limit their cost but continue to be frustrating to providers. They pretend to "just want to be helpful and supportive" in providing treatment, while they employ strategies that seem to be designed to discourage the provider from doing their work.
Disheartened by insurance company practices, providers often don't even consider suggesting a higher frequency of visits or alternate methods of treatment anymore, if either of that seems clinically indicated. Anticipating problems and difficulties with the managed care review, they’ve given up wasting their unpaid time trying to get it approved — and all too often, the client isn’t even able to pay a reasonable fee for alternate or more frequent services out of pocket.
The frustration induced by the insurance companies risks impairing the quality of the service provided. When therapists (or doctors) feel frustrated and poorly reimbursed for their efforts, how can they provide the high quality of care and therapy that most want to give their clients? How can they develop a therapeutic alliance with a patient or client — the key to a good outcome of therapy — if they harbor resentment about being paid poorly and being treated without respect for their clinical or medical expertise and their time by the insurance company?
Insurance companies have succeeded in taking control over the mental health field in ways that 25 years ago were unthinkable. In short, mental health insurance has become Orwell’s “BIG BROTHER,” watching over providers and patients alike.
In spite of that, most therapists and counselors are dedicated to their profession and have put up with these institutionalized harassment practice for over 20 years now. Patiently, they’ve either tried to help their clients get reimbursed for services rendered to them or get reimbursed by the insurance company directly. They’ve also protected their clients from insurance-induced stress by venting their frustrations to colleagues or by processing them in supervision meetings. Insurance companies have ruthlessly taken advantage of the profession's ethic and commitment to helping their clients.
"Progress is an illusion."
- Sheldon Kopp -