Segregated Mental Health Care – Roadblock to Parity


A fragmented payment and delivery system has resulted in an ineffective approach to mental health and substance abuse problems. According to National Integration Academy Council (NIAC) member Roger Kathol, MD, “80% of patients with behavioral health conditions first seek care in medical settings” and “60 to 70% of these patients get no treatment for their mental health disorders.” Payment and delivery reforms by private payers, state governments, and the Federal Government are needed to remove the partition between physical and behavioral health, and ensure that patients have increased access to behavioral health providers in medical settings.

Removing the partition between physical and behavioral health would result in improved clinical outcomes, and potentially “major cost savings.” A report, written for the American Psychiatric Association by Milliman actuaries, found that “medical costs of people with chronic medical conditions who also have behavioral health issues are much higher than the medical costs of those without behavioral issues.” Milliman estimates that co-occurring medical and behavioral health problems adds $293 billion to private payer, Medicaid, and Medicare health care costs. The report predicts that integrating physical and behavioral health would reduce that cost by between $26 billion and $47 billion. Lead author of the report is NIAC member Stephen P. Melek, FSA, MAAA.

Parity laws, such as those included in the Affordable Care Act, are intended to fix problems associated with carve-outs for behavioral health, but implementation of the laws has been slow. The parity laws do not require Medicaid to pay as much as other payers, which has resulted in providers who will not see Medicaid patients. Some private insurers also have low reimbursement rates for mental health and behavioral health.

There have been attempts to use different payment and delivery systems. Medicaid programs have begun “experimenting with better ways to coordinate physical and behavioral health.” Florida now offers a Medicaid plan that is only for people with serious mental illnesses. The Substance Abuse and Mental Health Services Administration (SAMHSA) annually provides grants of up to $500,000 to community mental health centers to provide integrated health care. Intermountain Healthcare, a non-profit health system, still relies on fee-for-service payment, but has been able to provide “integrated, team-based mental healthcare” in all of its primary care clinics. Despite not having global payment, a study published in 2010 indicated patients receiving care in an integrated clinic cost an average of $667 less than those receiving care in standard clinics, according to Intermountain’s clinical director Brenda Reissner, PhD. Rocky Mountain Health Plans in Grand Junction, Colorado does use a global payment system to cover costs for behavioral and primary care. An evaluation by the University of Colorado and Milliman found that Rocky Mountain clinics with integrated care saved 2 percent to 4 percent on care costs compared to the network average.

Providing integrated care involves more than co-locating services. According to Dr. Reissner, having mental health providers in clinics “doesn’t necessarily mean patients are getting team-based care that is centered on the whole person.” Until delivery and payment systems are reformed, practitioners and health systems will face barriers to providing fully integrated care.

Burns J. Can Separate Be Equal? Ending the Segregation of Mental Health. Managed Care. Accessed June 24, 2015.