CPPNJ - The Center for Psychoanalysis and Psychotherapy of New Jersey


Insurance Battleground

by Karyn Reader, MSW, LCSW

There seems to be a never ending onslaught of how insurance companies intrude into our patients' privacy and limit reimbursement. Their intrusion into our work has been intensified since passage of the Paul Wellstone-Dominici Act, which is the federal parity law that went into effect January 1, 2010 for people working in companies that have 51 or more employees. This changes prior laws that excluded ERISA (self funded plans) from parity. Now, even self funded plans must comply. However, all members of unions do not reap any benefit of this law until their contract renews, whenever that may be. There are also some likely glitches to this new law. After the first year, any company or organization whose mental health costs go up more than 2% will be exempt from complying with the law for the following 12 months. After that, an increase of 1% will exempt them from the law for the next year. Clearly this is extremely short sighted as we all know that taking care of mental health needs significantly can impact other medical costs, but this is not taken into account in this formula. It will create major chaos in terms of knowing whether each one of our patients continues to be covered under this parity law, or not. Patients' benefits will have to be looked at every year even when their insurance plan seemingly does not change! It can jump back to 20 sessions per year instead of unlimited and we will NOT be notified! Be on the lookout come January 1, 2011 and every year after that!

Continuing with the privacy theme, I'm sure most of you already know that NJPA is suing Horizon BCBSNJ and Magellan for pressing them to breach their peer review law in order to authorize sessions. NJSCSW is watching carefully for how to join in this battle. LCSWs will not necessarily be included even if NJPA wins their suit since we have somewhat different requirements in our licensing law. However, it is clearly stated in our licensing law that we cannot give insurance companies more than a 5 Axis diagnosis. All the details that the insurance companies are demanding of us are, indeed, a breach of our LCSW licensing law.

Obama signed into law in February an interpretation of how the parity law should translate into practice. My understanding of this is that mental health cannot be "managed" any more than any other medical condition. How this will play out remains to be seen. It does not go into effect until the beginning of the next plan year, some of which would be July 2010, most of which would be January 1, 2011. The insurance companies get around this by the big gaping loophole called "medical necessity". That is still left in their domain and how that gets interpreted is clearly distasteful to all of us.

Another battle that was fought and partially won in recent months was the passage of A-132 in the NJ Legislature. This was an attempt to force Horizon BCBSNJ to send checks to out of network providers, which they had steadfastly refused to do. They would send the check to the insured, which when we were seeing the spouse, breached confidentiality, and sometimes resulted in our never getting paid, if we had agreed to wait for payment. It also put a financial pressure, often untenable, for our patients to pay us up front, out of pocket rather than having us wait for the insurance to send us a check. NJSCSW fought this battle and, as I mentioned, partially won. Starting January 1, 2011, patients will have the right to assign payment directly to those of us who are out of network. The catch, and there's a big one, is that they will send the check to us, but it will require not only our signature but that of the patient! So, if your patient is gone, you may never be able to deposit the check! This "compromise" is absolutely absurd, but it does offer more control than not being sent the check at all.

Karyn Reader, MSW, LCSW
41 Elm Street, Suite 1G
Morristown, NJ 07960
973 540-0049