April 2, 1999

New York psychiatrists who told a huge managed care firm that they were mad as hell about a cut in their fees and not going to take it anymore are savoring the results of their successful protest.

United Behavioral Health (UBH), a managed mental health care carveout company, announced in a February 10 letter to participating providers that it has decided to rescind an announced cut in the fees it would pay clinicians who treat people with mental illnesses. The company also apologized for trying to reduce reimbursements.

Most of the proposed reimbursement reductions were aimed at outpatient psychotherapy services.

In the February letter, UBH explained that on January 1 it had begun managing mental health care in the New York metropolitan area for the HMOs operated by its parent company, United Healthcare.

"As part of our agreement with the local United plan, we adopted a provider fee schedule used for several years by the previous vendor," wrote Marie A. Schauland, Ph.D., UBH's senior director of provider services. "In hindsight, using a special provider fee schedule developed by a previous vendor and limited to the United Healthcare plan's New York metropolitan area was a mistake for which we apologize."

The company will instead adhere to payment rates listed in its National Provider Fee Schedule. It will also adjust payments made to providers since the beginning of the year to bring them in line with that fee schedule, Schauland stated. She thanked UBH-contracted psychiatrists and other clinicians for their "forbearance" as the company makes this "administrative change."

James Nininger, M.D., president of the New York State Psychiatric Association (NYSPA), credited this victory to an intervention campaign by that association and its individual members. "This result is encouraging because members can see that they have the power to bring about positive change when they intervene directly with managed care," he told Psychiatric News. This was one part of NYSPA's efforts to "respond forcefully and proactively" to its members' concerns, he added.

UBH was one of three large mental health carveouts that announced fee reductions effective January 1. The others were ValueOptions Behavioral Health and Magellan Behavioral Health Neither of those two companies has indicated it is contemplating following UBH's lead in backing off from planned cuts, said Seth P. Stein, J.D., NYSPA executive director and general counsel.

As soon as the NYSPA learned of the scheduled fee reductions, Stein immediately wrote letters to the three companies describing the consequences of their actions for New York's 7,000 psychiatrists and the people who are in treatment or contemplating it. Stein also alerted government agencies to the possibility that these announced reimbursement cuts, all of which were announced at about the same time and all to take effect on the same date, are in conflict with federal antitrust statutes.

In January Stein told Psychiatric News that with the economic climate being what it is, he didn't expect this onslaught of fee reductions to be the last implemented by managed care companies.

"I think future actions by these companies will depend on how this recent move is received," he said. With a split verdict at this point, the jury is still out on whether the companies will assume they can quietly impose further fee cuts on mental health care.

Nininger pointed out that NYSPA leaders were scheduled to meet with ValueOptions at press time to discuss psychiatrists' objections to the company's practice of encouraging bifurcated treatment in which psychologists and social workers are largely responsible for psychotherapy while psychiatrists are left to conduct medication management.-K.H.