Health Forward Foundation

Blue KC Cuts Rates for Mental Health Counselors

Many local providers worry about reduced services for the mentally ill

Non-physician mental-health counselors in Blue Cross and Blue Shield of Kansas City’s preferred-provider network are smarting from a Nov. 1 pay cut that some say averages nearly 30 percent.

In a letter dated July 29, Blue KC’s Senior Vice President of Health Care Services Brian M. Burns announced a schedule or reimbursement-rate reductions affecting independent psychologists, social workers, professional counselors and registered nurse practitioners. Burns’ letter said the move was made “(i)n an effort to be more consistent with other rates available in the market.”

“We understand this decision may have a financial impact on your practice and assure you it was not made lightly,” Burns wrote.

Some providers question that justification. They say the move will certainly hurt their bottom lines and thus their ability going forward to render the same type and amount of care to clients as they did before the cuts.

“My clinicians really didn’t understand that statement,” said Sky Westerlund, executive director of the Kansas chapter of the National Association of Social Workers. “There is no apples-to-apples comparison among insurance market rates. … This suggests they are comparing rates with other organizations, but my clinicians know they are not to share rates with anybody else.”

When asked to elaborate on Burns’ letter, Sue Johnson, senior director of corporate communications for Blue Cross KC, issued the following statement:

“Blue Cross and Blue Shield of Kansas City is committed to keeping healthcare costs as low as possible for our customers. Our goal is to secure the best rates for our customers, while also ensuring fair compensation to healthcare providers. The evaluation and adjustment of provider fees is a critical part of the services we provide to our clients and helps to ensure that behavioral health services remain affordable for the community. The amount of change varies by discipline and procedure – a specific percentage cannot be placed upon the adjustments being made.”

But in a post on the Kansas Psychological Association website, President Theresa Coddington wrote that “(t)he range of cuts appears to be 18-35%” and urged association members to push back, including reaching out to state and federal lawmakers for support.

“Our focus will be patient access,” Coddington wrote.

In Johnson County, a licensed clinical social worker in private practice, said the new Blue KC reimbursement cuts averaged 29 percent across a variety of her typical services.

“Blue Cross and Blue Shield represents 32 percent of my income,” said the counselor, who requested anonymity in order to discuss her business affairs.

The 29 percent average reimbursement-rate cut would translate to a loss of roughly 10 percent of her total professional income, she said.

Moreover, she said, Blue KC dominates the Kansas City-area market for health insurance with an estimated 30 percent share.

She said she intended to ask Blue Cross to back off the reductions. If that was not forthcoming, she said, she would have to reconsider accepting any new Blue KC preferred-provider patients.

“My colleagues are all atwitter over it,” she said. “Nobody is happy with this. We can’t continue to see Blue Cross patients in the same numbers due to loss of income. Blue Cross has been known for its ability to attract providers with a lot of experience, not only because of their rates but because of their local presence.”

The reduced rates could mean Blue Cross patients risk losing access to more experienced counselors, she said.

Blue Cross and Blue Shield of Florida recently instituted a similar cut in the rates it pays to all mental-health counselors, including psychiatrists.

But those who contract with Topeka-based Blue Cross and Blue Shield of Kansas apparently don’t face rate cuts any time soon.

Manager of Corporate Communications Mary Beth Chambers said “Blue Cross and Blue Shield of Kansas continues to contract directly with
and pays psychologists and other mental health providers in our service
area (all Kansas counties except Johnson and Wyandotte) at the same
percentage of reimbursement that we have for several years. In addition,there are no planned reductions for our 2012 contract period.”

Westerlund said Blue KC’s move to reduce rates for counselors — but not psychiatrists or other medical doctors – could violate the federal Mental Health Parity and Addiction Equity Act of 2008. That law requires insurers to treat mental-health and substance-abuse disorders on the same financial basis as medical/surgical disorders.

Blue KC’s Johnson confirmed that the company’s moves “affect non-M.D. behavioral health providers,” but added, “(w)e are not aware of any provision in the Mental Health Parity Act that precludes our ability to pay behavioral health providers based on their different levels of credentials, certification or licensing.”

Westerlund said Blue KC officials have responded to her request for a meeting with her association’s leaders to discuss the cut in reimbursement rates. That meeting is set for Dec. 16, she said.

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