Payment Level Differentials for Behavioral Health Services

SAE & Associates, experts in the assessment and monitoring of behavioral health parity, recently completed an engagement in support of a state Attorney General’s office to determine the level of compliance with the requirements of the Mental Health Parity and Addiction Equity Act (MHPAEA) by health insurers in the state. One of the more interesting outcomes from our assessment was a finding that there were notable differences in the overall rates of reimbursement for behavioral healthcare providers as compared to those for medical/surgical care providers.
A key provision of the MHPAEA concerns the imposition of Non-Quantitative Treatment Limits (NQTLs) by health insurers. The regulations specify that an insurer must impose NQTLs comparably and no more stringently for behavioral health services than those for medical/surgical services. Among other things, NQTLs encompass medical management processes, how medical necessity criteria are applied, the standards that govern the adequacy and management of provider networks, and methods for establishing provider reimbursement levels.
In order to assess the comparability of provider reimbursement levels, we looked at fee data provided by the insurers for their top volume procedures (CPT codes) for behavioral health and medical/surgical services. We then compared these fees against those for Medicare to determine what percent of Medicare providers were being paid for the services rendered to commercially insured members. What we found is that medical/surgical providers were consistently being paid at a higher level (as a percent of Medicare) than behavioral health providers. We further focused on specific CPT codes that were common to behavioral health and medical/surgical physicians for evaluation and management (E&M) office visits (99204, 99205, 99212, 99213, 99214 and 99215) and found there could be significant differences in the fees paid to medical/surgical physicians versus behavioral health physicians. Due to the confidential nature of our work, we cannot share our findings; however, Milliman, one of the world’s largest providers of actuarial services, released a research report a few months ago analyzing disparities between behavioral health and medical/surgical services related to the provision of care rendered in-network and the level of reimbursement paid to providers. Milliman found similar differences in reimbursement levels consistent with our findings.
One likely explanation for the difference in payment levels between behavioral health and medical/surgical services is that many health insurers carve-out the management and administration of behavioral health services to specialty managed care organizations (MCOs). These specialty MCOs develop their behavioral health provider networks independent from the provider networks established by the health insurers so it is expected that fee schedules might vary. However, the differences in payment levels may help explain the higher use of out-of-network providers for behavioral health. The more aggressive (i.e. lower) payment levels for behavioral health providers (particularly psychiatrists) may result in fewer providers participating in the specialty MCO provider network. This in turn may result in a network adequacy concern.
SAE has developed tools and considerable expertise to assess behavioral health parity compliance, including how NQTLs are applied. If you have any Parity compliance concerns and would like to speak with our team, feel free to contact our office at (212) 684-4480 or email