Therapy in L.A.


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August 2000
By Joyce Parker, Ph.D.

August 2, 2000: The Los Angeles Times headline carried the news that the Catholic Healthcare West chain of hospitals which operates 43 hospitals and 2 medical groups in California and the independent St. John's Hospital and Health Center in Santa Monica will not renew their contracts with Blue Cross because the company does not pay them enough to cover the cost of patient care. Ruth Given a health economist, who studies the California market said, "There is a huge amount of push-back on the part of providers that we did not see last year. They're canceling contracts and they're not bluffing." Since Blue Cross switched about a decade ago from a not-for-profit to a for-profit organization when they became part of bottom-line oriented Wellpoint, the company has done well financially. Wellpoint has reported hefty profits and has rewarded executives with multimillion-dollar bonuses. This development is also significant because it involves not only the Blue Cross Health Maintenance Organization which pays notoriously low fees to providers and hospitals but also the Preferred Provider Organization products which have also been cutting doctors and hospital fees in the last several years.

Recently, I am noticing a new development in my psychotherapy practice that follows this trend by health care providers. I am on several preferred provider organizations that have cut their fees significantly in the last two years. Specifically Managed Health Network and Aetna have reduced fees to some of the lowest in the industry. Now I receive several calls a week from patients who cannot find a therapist who will accept them into their practices. I don't know whether these people realize why they are having such a difficult time finding a therapist. The reason is that the reimbursement rates are so low now for these insurance companies that it is no longer profitable to commit to these patients and do the paperwork and telephone calls required to handle these cases. The provider contracts signed by therapists prohibit them from charging their full fee to these patients. Therefore even when a patient is willing to pay full fee, the therapist cannot agree to accept those terms. Also the contract excludes therapists from seeing patients outside their insurance who are referred by the insurance company. If a patient is seeing a therapist through the insurance plan, even after all sessions are used up for the year (most P.P.O. plans provide between 20-30 sessions per year), the therapist must see the patient for the fee that was contracted by the insurance company. These provisions have left therapists with little control over their practices and their finances. So it is not surprising that more and more therapists are avoiding managed mental health care patients.

The author of this article, and founder of the website, Joyce Parker, passed away in 2011. To honor her we are keeping her articles posted at this website.

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