Medicaid covers one-fifth of Americans who seek behavioral health services, but what the program pays psychiatrists varies widely across the country, according to a new study.
In addition, psychiatrists received 81% of the pay that they’d get from Medicare for treating the same conditions in Medicaid beneficiaries, the study in Health Affairs found.
Medicaid is the largest single payer for mental health services in the U.S., the researchers said.
“Payments in the lowest- and highest-paying states differed by more than fivefold,” wrote researchers with Oregon Health & Science University. “Comparing Medicaid payment across states may help benchmark ongoing state and federal proposals to increase reimbursement for psychiatrists and other members of the mental health workforce.”
Jane Zhu, M.D., the study’s lead author, told Fierce Healthcare in an email, that “overall, these findings are in line with what we expected—that Medicaid programs continue to lag behind Medicare on payment for mental health services, but what was surprising was the degree to which this varies across states. It is important to understand what’s happening in the states that are consistently underpaying in the context of the current workforce crisis—maybe they are implementing other policies or programs that work—or maybe not.”
Conversely, says Zhu, it’s important to find out if the states that are paying relatively higher rates are getting a bang for their buck.
Zhu and fellow authors identified the 20 most frequently billed mental health services for psychiatrists, comparing utilization by Medicaid fee-for-service beneficiaries across states with the enrollment-weighted Medicaid national average, and also compared the state Medicaid utilization with Medicare fee-for-service utilization. They collected data from 48 states (Florida and Tennessee were not included) and Washington, D.C.
The three services with the highest median costs included:
A new patient office visit between 60 and 74 minutes, costing $152.52
Psychiatric diagnostic evaluations with medical services, at $137.89
Psychiatric diagnostic evaluations without medical services, which cost $125.39
About 72% of the approximately 85 million Medicaid beneficiaries receive benefits through a health insurance plan, but researchers found limited data that would allow comparison to fee-for-service Medicaid and managed Medicaid for behavioral health coverage.
In addition, the researchers cited previous studies that found “Medicare Advantage plans paid only 67% of the Medicare price of a walker, an area where traditional Medicare is considered to overpay. To the extent that Medicare’s experience is mirrored in Medicaid, we expect Medicaid managed care rates to be anchored by state fee-for-service rates, with the potential for rates to be lower where Medicaid fee-for-service overpays (uncommon by most accounts) and higher where Medicaid fee-for-service underpays.”
Researchers found a fivefold difference between Medicaid and Medicare reimbursement in the lowest paying states—Pennsylvania, Maine and Rhode Island—and highest paying states—Nebraska, Alaska and Arkansas.
“States have historically set their own Medicaid reimbursement rates, and as our analysis suggests, some states have set particularly low rates,” the study said. “Evidence suggests that low reimbursement is a financial disincentive for mental health professionals to treat Medicaid enrollees, a population that disproportionately experiences serious mental illness and barriers to care.”
Lower reimbursement rates seem to hit mental health specialists particularly hard, with psychiatrists getting lower in-network payments than other healthcare providers for rendering the same services, the study found. Zhu says that the psychiatrist’s role in behavioral healthcare can’t be easily filled by other providers.
“Primary care physicians like me play a large and growing role in filling in the gap for mental health services,” Zhu said. “But research has shown that the roles filled by mental health specialty providers (like psychiatrists) vs. PCPs address different populations (e.g., serious mental illness vs. mild or moderate mental illness).”
It will be up to states to address this problem, the study said, noting that federal efforts to increase Medicaid reimbursement have been temporary and too narrow in scope. For instance, the Affordable Care Act bumped up payment for primary care physicians to match Medicare rates, but only 19 states maintained that increased payment after the two-year mandate expired.
Nonetheless, the researchers said, legislators in some states seem to realize just what a problem behavioral health has become for the public in general and for Medicaid recipients in particular.
Last July, Maryland increased reimbursement rates in Medicaid to match those in Medicare for behavioral health evaluations, and Oregon has implemented a 26% to 45% increase in Medicaid fee-for-service rates for substance use disorders and pediatric intensive psychiatric treatment. Zhu said that increasing rates will probably be necessary but won’t by itself solve the problem.
“We wrote a behavioral health workforce report (PDF) for the State of Oregon which hints at other factors that may incentivize mental health clinicians to take care of Medicaid patients specifically and to accept insurance more generally,” Zhu said.