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Insurance networks: Is it time to abandon them?


Bob has been coming to therapy for a few months now. Initially, we met every week, but as his depression lifted, he asked to space the sessions out to twice a month, even as he continues to struggle with many challenges in his life. The cost, he says, is prohibitive, and while Bob believed he had good commercial insurance coverage, he’s learned a few things about insurance and mental health care.

Dr. Miller is coauthor of “Committed: The Battle Over Involuntary Psychiatric Care” (Baltimore: Johns Hopkins University Press, 2016), and assistant professor of psychiatry and behavioral sciences at Johns Hopkins University, Baltimore.

Dr. Dinah Miller

Bob was referred to me by his internist. He knew I did not participate in his insurance network, but his policy covers out-of-network care. He’d had a number of imaging studies and then knee surgery earlier in the year, so he believed he’d met his deductible. He learned that, while he’d met his in-network deductible, he’d had no out-of-network expenses and there was a separate, much higher deductible – one he was not likely to meet with outpatient psychiatric care. In fact, the full cost of his treatment was not being subtracted from the deductible he needed to meet, but rather he was getting credit for lower usual and customary evaluation and management and psychotherapy fees for each session. It became clear that it would be many months – if ever – before Bob could expect any reimbursement for his out-of-network visits.

What Bob didn’t know was that, had he decided to switch to an in-network psychiatrist, he might well have trouble finding one, since half of psychiatrists don’t participate with any health insurance plans. And if he did see an in-network psychiatrist, he would likely need to find a separate in-network social worker or psychologist for psychotherapy, because most in-network psychiatrists see patients for short medication-management appointments. While the insurance companies would give Bob a list of providers, those lists are not kept up to date and include psychiatrists who have died, moved, aren’t taking new patients, or who have retired. The insurance company clearly states on its voicemail that verification of services does not guarantee payment, and Bob was told that the only way he could be certain of the reimbursement would be to submit the claims and wait. He went into treatment fully understanding that he might get no help with the cost from his health insurance.

When I first started in private practice in the 1990s, I joined only one panel. An older colleague told me I was foolish to hesitate, and that soon the panels would fill and it would be too late; psychiatrists wouldn’t be able to get on to the panels and would be unable to attract patients. A few years later, that same psychiatrist withdrew from all the insurance panels he was on; working on their terms was not rewarding. This division of in-network and out-of-network care is crucial to managed care: They must attract panels of doctors who will work for lower rates or with stipulations on how the doctor practices in order to save money.

But managed care came with a price: An entire administration was created to oversee the regulation of treatment. With time, some aspects of care management have vanished; it has been years since I have been asked to fill out a treatment plan to justify a need for outpatient psychotherapy. In Bob’s case, it’s clear how they save money; since he will not reach his high deductible, he will bear the full cost of his psychotherapy. Other patients who cannot afford to go out of network may give up searching and decide to go without treatment – this is not always an easy service to negotiate when one is distressed and compromised. Half of people with serious psychiatric disorders are not in treatment, and barriers to getting care are certainly one reason why.

Many psychiatrists have discovered that they can maintain a practice without being on insurance panels, as managed care only works if there are enough players willing to toss the ball. As psychiatrists have shied away from these panels, insurers have raised their reimbursement rates, and in Maryland, Medicaid also has had to raise their rates. The struggle has become one of how to get enough mental health professionals, and psychiatrists in particular, to join insurance panels in what is a shortage field.

Maybe the question of how to get enough psychiatrists to participate with insurance panels is now the wrong question. Perhaps there are better ways to spend health care dollars than on the administration and management that come with limiting which doctors patients can see. The logistics of in-network versus out-of-network care are an expensive one, and create unconscionable scenarios in other fields. For example, such scenarios include ones in which a patient is brought in for emergency care to a facility where the doctors are not in network, or a patient has a procedure with an in-network surgeon but is unaware that the anesthesiologist or other members of the care team are not on the panel.

What if insurers controlled costs by setting a reasonable fee they would pay for services and paid any licensed physician for these services? Would market forces sort this out? Would fees then set to one which insurers would be willing to pay and physicians would be willing to accept? Or would those who are ill and impoverished be blocked from getting any care? What if we tried a whole new paradigm for psychiatric care?

Richard G. Frank, PhD, is a professor of health economics at Harvard. He specializes in mental health economics and is coauthor of the book “Better But Not Well: Mental Health Policy in the United States Since 1950 (Baltimore: Johns Hopkins University Press, 2006). Dr. Frank is a proponent of insurance panels.

“In the world we live in, we need to have panels; they are essential to controlling cost. They create a balance in terms of cost and utilization control in ways that protect patients, and they create a way for the insurance companies to bargain,” he said.

Dr. Frank noted that the concept that insurers should pay a set reasonable fee to any physician a patient wants to see has been tried. “It’s called ‘reference pricing,’ and when they did that with hip replacement surgery in California, it just hasn’t worked out. Patients ended up getting larger bills than they anticipated.

“The issues with psychiatry are different,” he continued. “There is a lot of bad behavior on the part of insurers and it’s an issue of parity. We shouldn’t let insurers differentially pay psychiatrists less. They have had an incentive to reduce the availability of mental health care and it’s bad for patients. It’s about lower payments to psychiatrists and the way those payments are currently structured drives patients out of care and defeats the purpose of insurance.”

Steven Sharfstein, MD, is the former CEO of Sheppard Pratt Health Systems, a past president of the American Psychiatric Association, and coauthor of several books on the economics of psychiatry. He refers to the current practice of credentialing network psychiatrists as a means of “rationing by supply.”

“The networks create a barrier to accessing care. I don’t think it’s an efficient way to take on the high cost of care, and it creates a tiered system.” Like Dr. Frank, Dr. Sharfstein believes parity is a large part of the problem. When asked about the idea of ending networks and establishing uniform deductibles and reimbursement rates, Dr. Sharfstein replied: “It really depends. We would need fees to hit a sweet spot that supports care while controlling costs.”

One thing is clear: With the current paradigm, it is often difficult to access treatment, and the well-insured patients may bear a significant and disproportionate cost (if not the entire cost) for getting care. Many who need care do not get it, regardless of their insurance status. Our status quo for psychiatric care falls short and I don’t predict that psychiatrists will rush to join networks so long as the demand for psychiatrists is greater than the supply.

Might another financial model work better? We know the system is lacking and one option, as Dr. Frank suggests, is to find solutions within the current model. But perhaps the question should not be one of how to get more psychiatrists to join networks, but of how to rework the system without the assumption that networks are the only way. While Bob is pleased that his symptoms are getting better and he’s managed a way to tackle his own bills, it’s certainly time to explore new ways of delivering and reimbursing psychiatric care.

Dr. Miller is coauthor with Annette Hanson, MD, of “Committed: The Battle of Inpatient Psychiatric Care (Baltimore: Johns Hopkins University Press, 2016), and has a private practice in Baltimore.

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