Knowledge is power. In my case, power grew from knowledge. I have been an inveterate warrior against managed care and was quoted in an article in the National Psychologist (Saeman, 1997) about my choice to continue participation in managed care plans, saying that, “You can’t blow up the bridge unless you can get under it.” Surprise of surprises, managed care companies that shortly afterward removed me from their panels had taken note of this article. By the way, I have been reinstated to all of the panels that removed me and both of the companies that removed me after that article appeared have recently given me a raise!

No, it’s not that they love me. Certainly not that! It’s that I know their dirty little secret; they have phantom networks. In order to document this, I performed some research in late 2003 and early 2004 (Holstein, 2004). While the research is now a bit dated, it provides a picture that I believe is still accurate. Indeed, I feel sure that the situation has gotten worse. The managed care plans that were studied continue to have an inadequate number of psychiatrists and psychologists serving their covered lives. In my research I contacted the offices of all allegedly contracted psychiatrists and psychologists in the two county area in and near where my practice is located (Monmouth and Ocean Counties, New Jersey). Each practitioner or a knowledgeable office staff was asked four questions. 1) Are you in the network(s) that allege your participation? 2) Are you taking new patients? 3) When is your first available appointment? And 4) Do you treat adults, children, or both?

The picture presented in my research documented serious deficiencies that have not been corrected. From my perspective as a managed care clinician, I find two problems that need to be addressed by managed care. First, they have too few psychiatrists, and that makes it dangerous for me to see new patients. Should a referral for a psychiatric consult for medication be necessary, I am in a dangerous position (Holstein, 2002). This has happened repeatedly in dealing with patients who may be or may become dangerous (suicidal, homicidal, or presenting other danger). It extends that danger to me, because I am powerless to get them to the in-network psychiatric help that they need. Second, managed care plans do not have a history of raising fees. Their fees are way below standard for psychologists.

The following is a template for negotiating yourself a raise.

Do Market Research. It’s simple supply and demand. If you are in short supply, you command more money. Do not be turned off by the term market research. Anyone can do this. As a matter of fact, the Interdivisional Task Force on Managed Care and Health Care Policy (Divisions 39 and 42) advocates to state psychological associations that they do this research in each state. Don’t wait for this. Survey your own service area. To do this, pick any of the plans that you participate in or that you would like to participate in. Go to their website and search for all practitioners within a given radius. Call the other psychologists on the list. And while you are at it, call the psychiatrists. Ask the same four questions that I asked (see above). This will give you a picture of the adequacy of the network(s).

If you live in a heavily populated area, such as a major city, sample the lists. Call every fifth name or every tenth name. In a city, use a distance of 5 miles. In suburbia, use a distance of 10 or 15 miles. In a rural area, use 25 miles as your radius. This can take a few hours. Consider it an investment in your professional business. There is no guarantee that there are phantom networks where you live. If you are in managed care plans and your practice runs pretty full, you should suspect phantom networks. If there are phantom networks in your area and you have documentation, then you are in a situation where you should try to negotiate your fees.

Negotiate Your Fees. Not all managed care companies will entertain a request for higher fees. In my case, two companies have accepted my request for higher fees. These are Aetna and ValueOptions. However, two requests to Managed Health Network have fallen on deaf ears. I believe that some companies will not negotiate fees. Even ValueOptions cannot negotiate fees for those contracts that are with large entities such as the Empire Plan covering State of New York employees, or GHI Behavioral Management which covers, among others, New York City employees. This would also be true for plans such as those managed by Magellan. Magellan is not a subsidiary of any large insurance company and it appears that many of their contracts with insurers do not permit giving selective raises to practitioners.

This is fine, since where networks are minimally adequate, demand for services will be such that one can fill a practice from one or two managed care companies. Therefore it is easy to select only those patients who have the better paying benefits. As networks fray, managed care companies will have to entice scarce professionals by making them offers they will not refuse. This is a situation that I call “designating prime professionals.” By this methodology, I am a “prime psychologist” with Aetna and somewhat with ValueOptions since they will pay me more than standard contracted rates. If I have an opening, I will obviously save it for a patient from one of these two benefits. I bluntly tell the other companies, when I contact them, that my practice is essentially full, with any opening going to the better paying companies’ covered lives.

To negotiate, contact a high level representative of provider relations of the company with which you wish to negotiate. Be clear that you want to talk to someone who can negotiate your contracted rates. It is important that you have your market research data in hand. Even with the data, the company will want to deny the information that you have. When you say that your research indicates that in your area (e.g. one or two counties, zip codes, etc.), with a population of X, Adequate Behavioral Health has 24 psychiatrists and 44 psychologists who are in-network and taking patients. Specifically in your immediate area, there are two psychiatrists and three psychologists available. This is clearly not adequate, and given the shortage, you would like an increase in your contracted rate so that you will continue to be available to their covered lives. They may dispute your figures, but as the trend continues to result in fewer contracted professionals, their allegations are more clearly false. Assuming that you are successful with one or two of the larger managed care companies that you are contracted with, you can pretty much not need to take patients from the companies who do not resolve the contracted rate issue in your favor. In my area the dearth of psychiatrists in-network is a very legitimate reason to not take patients. I have had upsetting experiences trying to get a patient to see a psychiatrist from some of the worst phantom networks.

Other Tactics. Locally, based on my phantom network research, a small ad hoc committee is being formed. It is made up of one psychiatrist, three psychologists, and hopefully one lawyer. The committee acts as patient advocates. It is hoped that we can communicate with the identified phantom network companies to ask them to remedy the situation. It is yet to be decided what action should be taken when the companies fail to remedy the situation. Among the possibilities are communicating with the large self-insured corporate benefits about the problems in their benefit with availability of mental health professionals. Another is to have the lawyer approach the agency that regulates insurance in your state to have them enforce them enforce regulations to make networks adequate.

After I published my phantom network research, I contacted the media. A front-page article in the Sunday edition of New Jersey’s second largest circulation newspaper, The Asbury Park Press (Mueller, 2005) was the result. As mentioned above, The Interdivisional Task Force on Managed and Health Care Policy has asked state psychological associations to sponsor statewide the phantom network research that I have done locally. This would put information into the hands of psychologists that could be useful in their negotiating more favorable reimbursement rates. Anyone reading this article can call their state association and press for them to arrange for such research to be done under state association auspices.

While it may not be true, it has been the official position of APA Legal and Regulatory Affairs that negotiating for more than one entity is illegal and in restraint of trade. When pressed, lawyers are not 100% positive of the APA position because some collective bargaining has taken place. However, where there has been union affiliation (e.g. New York State Psychological Association and United Federation of Teachers), collective bargaining with managed care has not taken place.

Assessing the Value of Negotiated Fees. Many psychologists have opted out of managed care. One reason is that they can set their own fees. This works for many. For those who for whatever reason do not feel they can thrive without managed care, negotiating fees is a viable alternative. Most of the psychologists who do not contract with managed care will arrange a sliding fee scale. If their top fee for a 90806 is $150.00, they will have many patients who will pay considerably less. With managed care fees that have been negotiated, none would be at the $150.00 full fee. However, with a number at or above $100.00 for a 90806 and a virtually full practice, the economic benefit may be as good or better than the person with a managed care free practice. Given the economic argument above, the compromises that one has to make with managed care still make the negotiated fee solution rather unpalatable for many psychologists.

References

Holstein, Russell, Managed Care Contracted Professionals: Are You Practicing Dangerously?: New Jersey Psychologist, 52 (2002) (4) pp 14-15.

Holstein, Russell Finding In-network Mental Health Care: A Phantom Network Odyssey, The Independent Practitoner 24 (2004)(4) pp 160-165.

Mueller, Naomi Therapists: Insurance Networks Deceptive, The Asbury Park Press, June 12, 2005 p. 1.

Saeman, Henry Psychologist ‘Whistleblower’ Savors Giving MCOs ‘fits.’ The National Psychologist 6 (5) pp 8-9.