Why is mental health payment special?

The young woman across the exam room from me began to cry. The mother of two young kids, she felt overwhelmed. She had no time for herself and little help at home. “Have you talked with a psychotherapist?” I asked. I was a well-meaning young primary care physician, trying to control what I could as I helped this woman address the root cause of her tears. I gave her a few business cards for some nearby psychotherapists and sent her on her way. One month later she returned, still in tears. All of the psychotherapy options I gave her were either fully booked or too expensive, wanting $150 cash per hour. Plus, she didn’t have the free time anyway.

Why didn’t the local psychologists or social workers take her insurance? Why weren’t there enough psychotherapists or psychiatrists to help those patients who needed the help?

There are a host of forces that have brought our health care system to this point. One major contributor: U.S. stakeholders pay for mental health (MH) care much differently than we do for medical or surgical care. But our system is on the verge of change.

Earlier this month, the U.S. Departments of Labor, Treasury and Health and Human Services released the Final Rule to strengthen implementation of the Mental Health Parity and Addiction Equity Act (MHPAEA). This law was passed in 2008 in an effort to lower barriers to care for mental health and substance use disorders (SUDs), or at least make those barriers no more burdensome than those in place for physical health.

Despite the MHPAEA being the law of the land for more than 15 years, behavioral healthcare - by many measures - is still more difficult or more expensive to access than medical or surgical care. Only one-third of Americans with a mental health diagnosis sought care from a behavioral health specialist in 2021. Eight percent of emergency department (ED) visits that same year had a principal behavioral health diagnosis. 

Patients still require out-of-network inpatient psychiatric care 6.2 times more often than they do for general medical/surgical inpatient care. The COVID-19 pandemic accelerated demand for behavioral health services, while Americans simultaneously faced clinic closures and other disruptions to normal venues of care. The first two years of the pandemic led to a significant drop in life expectancy to its lowest point in 20 years, with drug overdoses highlighted as one of the prominent non-infectious contributors to this decline. 

As with any rulemaking exercise, the devil is in the details, or rather, the definitions. While there are still some gray areas to be worked out, the high-level spirit is embodied in limiting non-quantitative treatment limitations (NQTLs). These NQTLs, such as utilization management, prior authorization or reimbursement methodologies, can be “no more restrictive” for MH/SUD care than for medical/surgical care. 

There are many routes for payers to meet these new standards. In addition to improving payment to behavioral health clinicians and expanding networks, there is a simpler step: Standardize the payment methodology. 

Currently, the majority of inpatient psychiatric admissions in the U.S. are paid on a per diem (daily) basis while medical/surgical admissions are paid based on a diagnosis-related group (DRG) classification. Medicare adopted a DRG approach 40 years ago for physical health which was then rapidly adopted by commercial and Medicaid payers as well. 

A prospective DRG payment ensures a single payment based on the severity of the patient’s condition(s), diagnoses and procedures. Caring for a patient with respiratory failure intubated in the intensive care unit (ICU) obviously costs a hospital more than a young, healthy patient with an ankle fracture; a DRG approach ensures the hospital gets paid more for the ICU patient. However, inpatient psychiatry stays remain largely a per-day fee and perpetuate a fee for service system that incentivizes increased revenue through longer lengths of stay.

Standardizing approaches to payment across conditions and geographies furthers our systemwide pursuit of the quintuple aim: Improved outcomes, lower costs, better patient and clinician experiences and improved health equity. 

Beyond insurance coverage or financial incentives, there are of course other areas to target, such as the nationwide shortage of behavioral health clinicians. Over half of Americans live in a Mental Health Professional Shortage Area. The current mental health clinical workforce does not reflect the cultural background of the patients that need them. Nearly every state is working to somehow increase the behavioral health workforce available to care for their residents. California has just unveiled a multi-year, multi-billion dollar strategy to expand their behavioral health workforce. There are 100 new federally funded psychiatry residency positions on the horizon. However, these efforts will take years to bear fruit.

The U.S. is in the middle of a costly and draining crisis that weighs on societal well-being and productivity. This requires an appropriately sized response. All stakeholders must do what they can to improve population-wide access to care for mental health and substance abuse disorders. That starts with a foundation of payment parity. The charge is before us: In the words of President Biden, “mental health care is health care.” Let us align our resources and make that reality.

Travis Bias, DO, MPH, FAAFP, is a family medicine physician and deputy chief medical officer of health information systems at Solventum.