Therapy and Insurance

There are two issues to consider before you access your health insurance benefits.  The first issue is the confidentiality of your medical information.  Second is the restrictions to your care based on your insurance company's care managers. Each managed care or indemnity policy is different and has different benefits and  restrictions.  Ultimately you are in control of how you use your benefits. It is the intent of this article to address the current issues in managed behavioral health care.

Beginning on April 14, 2003, a new set of federally mandated regulations called HIPAA ( Health Insurance Portability and Accountability Act) will govern the privacy and security of all transmissions of health related information. This act has been part of a long term legislative battle, fighting over a treasure trove of data- our personal medical information.  Many entities would like to have access to this data.  Insurance companies and hospitals want to know how we have utilized our health benefits and what services have been provided to us.  Law enforcement would like evidence to crime.  Employers want accountability to their health insurance premiums and pharmaceutical companies want new customers.  Essentially, with the advent of HIPAA, our government is granting itself the permission to examine our medical history.

The intent of HIPAA was to create a seamless structure to process and pay for treatment. The regulation was to focus on transmission and storage of electronic medical data.  However, as the complexities of creating such national legislation grew, the task of creating HIPAA fell to the Department of Health and Human Services, which expanded the regulations beyond electronic data to include paper medical charts.

Which providers are regulated by HIPAA? In general, mental health providers who accept third party reimbursement for services must comply with HIPAA. That includes a provider who provides a diagnosis and bills their services to your insurance plan.  Some mental health providers are thinking of switching their practices to consultation services in which they use their therapeutic skills but do so without diagnosing or billing insurance companies.

The HIPAA regulations create three sets of standards seen as beneficial.  The first standard creates steps for providers to follow in the security of patient information.    The second and third standards, transactions and provider identification respectively help to ease authorization, billing and payment processes.  The forth standard has to do with medical privacy.

In the past, a patient's confidentiality was protected by the use of a release of confidential information.  This release allowed the patient to specifically decided whether or not their information could be shared with a third party.  After April 14, 2003, health care providers will be required to provide a "Notice of Privacy Practices".    This notice will outline where your medical information may go and how it may be used.  The notice will list all entities that may receive private information without the patient's consent or authorization.  As a result, the Department of health and Human Services, "the administrator of the rules, will have total access to medical records to monitor compliance."(1) Each provider has the responsibility to create their own version of the Notice using some required HIPAA language as well as language specific to State law.   To comply with this regulation, I will have a notice posted on this web site.

Insurance companies and regulators have always sought a system that would be cost effective.  With the advent of managed care, a system evolved to address the growing demands for health care coverage.  The resulting system has those who pay the bills- the insurance company- managing the level and continuity of your medical care.  It has been a decade since most care plans allowed the insured to seek out treatment from the provider of his or he own choosing.  "Most managed care companies and agencies offer restricted mental health benefits.  You can't just pick up the phone book and choose a doctor or counselor.  And you can't get the coverage for all conditions.  Getting what you need under managed care is rarely as simple as the ads for your care plan would have you believe(2).  As a consumer of services, it is important for you to be fully aware of your plan's coverage.  Read the benefits book carefully, ask questions, make sure you understand what services are available to you and what is required of you to access them.  Most managed care models utilize two basic tools, utilization review and case management. Both of these tools require the therapist to get authorization or permission from your health plan before services are provided.  The goal of authorization is to monitor the cost, necessity and the quality of your care. The issue of confidentiality is highlighted in this system.  If you choose to utilize your health care benefits, your right to privacy is compromised  The insurance company requires some detailed information about the patient and the treatment in order to authorize additional sessions.  This information may include your demographics, the problem you presented to the therapist, past treatment,  any assessment or treatment progress, medication history, substance use or misuse, risk factors, including history of suicidal thoughts or attempts, homicidal impulses, child or elder abuse and domestic violence history.

There are several different types of insurance that cover therapeutic services. However, the length of therapy allowed and the kinds of diagnoses covered under individual insurance plans can vary. We recommend you contact your provider to discuss the current benefits of your policy. Listed below are several insurance options which do cover therapy.

Preferred Provider Organizations (PPO's)

PPO's are insurance plans that contract with networks of providers to supply services. Patients are offered lower cost-sharing to use providers on the "preferred" list but can use non-network providers at a higher out-of-pocket cost. Therapists are typically paid on a discounted fee-for-service basis.

Point-of-Service (POS)

POS plans are managed care plans that combine features of pre-paid (or capitated) and fee-for-service insurance. Patients can choose to use a network provider at the time of service. A significant co-payment typically accompanies use of non-network providers. Although few plans are purely of one type, an important difference between a PPO and a POS is that in a PPO plan, the patient may select any type of covered care from any in-network provider, while in a POS, use of in-network services must be approved by a primary care physician.

Carve-Out Managed Behavioral Health Care

In carve-out managed behavioral health care, segments of insurance risk-defined by service or disease-are isolated by overall insurance risk and covered in a separate contract between the payer (insurer or employer) and the carve-out vendor. Even with highly restrictive admission criteria, many HMO's have recently found it cost-effective to carve out mental health care for administration by a managed behavioral health company. 

At least 60% of my clients utilize their health care benefits or their Employee Assistance Programs.  Although the current legislative change will make an impact on the behavioral health front, each individual must make a choice to use their benefits or not.  To date, I have yet to be personally involved with a refusal of benefits for a reason other than the benefit limit was reached.  My experience with care managers has been positive and has promoted the well being of my clients.  

(1) Freeny, Michael; Psychotherapy Net worker March/April 2003 "No Hiding Place, Will Patient Privacy Become A Thing Of The Past"

(2) Preston, John, Varzos, Nicolette, Liebert, Douglas; Every Session Counts making the most of your brief therapy 1995, Impact Publishers, San Luis Obispo, Ca 93406