Medicare Mental Health Parity: Still a Long Way to Go
The recent passage of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 received significant media attention and jubilant acclaim from mental health advocates. This law represents significant progress toward ending discrimination in commercial health insurance coverage for psychiatric treatment. It requires health insurance plans to cover psychiatric treatment on par with their coverage of medical and surgical conditions. The unheralded passage of another law, the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) is a long overdue first step toward mental health parity in Medicare, and thus has greater implications for older Americans.
Since its inception in 1965, Medicare has had a statutory discrimination against older patients with mental health problems. The Medicare co-payment for medical and surgical services is twenty percent. In contrast, for psychiatric services, except those provided to hospital inpatients or to beneficiaries with Alzheimer’s disease and related disorders, Medicare imposes a fifty percent co-payment. This discriminatory co-payment, known as the “psychiatric reduction”, created a second-class citizen status, in Medicare, for older Americans with psychiatric disorders, and imposed a greater financial hardship on those least able to afford it.
Beginning in 2010, under MIPPA, Medicare will gradually phase out the psychiatric reduction until the psychiatric co-payment shrinks to twenty percent, in 2014, at which time it will be on par with other Medicare-covered medical services. This will eliminate not only the added financial hardship but also the added stigma of mental health problems that Medicare’s fifty percent psychiatric co-payment fostered.
The phasing out of the psychiatric reduction is a huge victory, the significance of which cannot be understated. Unfortunately, it does not eliminate inequity in Medicare mental health coverage. True mental health parity requires Medicare mental healthcare reform that will be complex and difficult. MIPPA provides a false sense of security: It enables Congress to conclude that the Medicare mental health reimbursement problem has been fixed. Nothing is further from reality.
National healthcare reform is a staggering challenge, and geriatric psychiatry simply is not on the congressional radar screen. Most attention is focused on rescuing primary care. But few policy makers know that geriatric psychiatry is essential for high quality, cost effective, primary care for frail, older patients with mental health problems, especially those with Alzheimer’s disease and related disorders.
Currently, geriatric mental health services are in desperately short supply. There are not enough geriatric mental health specialists to meet the need, and training of new specialists is falling far behind the rapid growth of the elderly population. This workforce crisis has been identified by the Institute of Medicine (IOM) of the National Academy of Sciences in its recent report Retooling for an Aging America: Building the Health Care Workforce. The IOM report is a clarion call for urgent action. Unfortunately, current healthcare financing policies remain inimical to building the needed workforce.
According to the IOM and the Medicare Payment Advisory Commission, a body charged with providing advice about the Medicare Program to Congress, inadequate reimbursement is the major reason for the inadequate supply of geriatric specialists. Medicare payments are too low to support the complex, demanding practice of clinical geriatrics, including geriatric psychiatry. The treatment older patients need is not available for the simple reason that providers with the requisite expertise can’t get paid to deliver the services.
Eliminating the fifty percent co-payment will not solve this problem. Lowering the co-payment to 20% eases the burden on patients, but this does them no good if they still can’t find qualified and available specialists. Whether the patients’ co-payments are 20% or 50%, a too low fee is still a too low fee. Inadequate reimbursement for geriatric psychiatry creates severe access problems for patients, and amounts to de facto rationing of geriatric mental healthcare. This state of affairs is far from parity.
Watch for future posts to this blog discussing the geriatric psychiatry workforce crisis and reforms needed in the geriatric mental healthcare system.