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Insurer to Raise Psych Payouts: BlueCross to Cover Consultations With Primary Care Doctors

Posted on: Friday, 31 March 2006, 06:00 CST

By Jeremy Olson, Pioneer Press, St. Paul, Minn.

Mar. 31--Minnesota's largest health insurer is raising rates for psychiatric care -- a move mental health advocates have said is long overdue to address the state's shortage of psychiatrists.

The increase by Blue Cross and Blue Shield of Minnesota will raise payments to psychiatrists by 20 percent per year for each of the next three years. In addition, Blue Cross will start paying psychiatrists to consult with primary care doctors on mental health care.

The idea of the consultations is to prevent unnecessary psychiatric appointments that could otherwise be handled by family doctors with a little guidance over the phone.

"It's a bold first step," said Colleen Reitan, Blue Cross' president and chief operating officer.

The move comes despite intense competition among health plans to cut costs and lower premiums for employers offering health benefits to their workers. Blue Cross officials declined to comment on the initial cost of raising rates, but Reitan said that in the long term, she expects no cost increase for consumers.

Minnesota's shortage of psychiatric care providers means some patients wait months for outpatient appointments and increases the risk of crises that force them into hospital emergency departments and expensive inpatient psychiatric care.

If psychiatrists can handle simple cases through cheaper consultations, they will have more appointments for people urgently awaiting care, Reitan said. That should reduce the need for and cost of emergency psychiatric care.

Mental health makes up only 5 percent to 6 percent of Blue Cross' spending, so the increase will have a minimal overall effect. However, Reitan said Blue Cross would look to cut costs on medical specialties it has overpaid in the past.

Other health plans said they are addressing mental health costs. Medica, for example, reported increasing psychiatric rates by 30 percent between 2003 and 2005.

Last month, Gov. Tim Pawlenty recommended a mental health reform package that included $7.5 million to increase provider rates. Public funding is particularly important, because as many as 60 percent of people with mental illnesses qualify for low-income public health benefits.

Blue Cross' payment hike will help if it doesn't come with additional requirements that will add expenses, said Dr. Eric Larson, president of the Minnesota Psychiatric Society.

He was less enthused by Blue Cross' encouragement and funding for consultations. While it is important for psychiatrists to talk with family doctors -- especially doctors in small towns with no mental health care -- the consultations raise liability concerns, he said.

The increased payment rates won't directly benefit the two dozen psychiatrists employed by Park Nicollet, because large health care providers negotiate their own rates with insurers. However, increased rates will make Minnesota a more attractive destination for psychiatrists, said John McGreevy, Park Nicollet's administrator for behavioral health services.

"It will make the recruiting of psychiatrists easy for large systems and small systems," he said.

Jeremy Olson can be reached at jolson@pioneerpress.com or 651-228-5583.

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Copyright (c) 2006, Pioneer Press, St. Paul, Minn.

Distributed by Knight Ridder/Tribune Business News.

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Source: Saint Paul Pioneer Press (St. Paul, Minn.)

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