Mental Health Providers, Families To Benefit From Health Insurance Changes

Feb 7, 2019

Many big employers are wrestling with the best way to get a handle on the rising cost of health care. The state of North Carolina is taking a step toward lowering healthcare costs for its roughly 720,000 employees, retirees and their families by changing how it pays for their care.

Many therapists in North Carolina like Amanda Crowder can expect to see the state start reimbursing them more to see state workers.
Credit Alex Olgin / WFAE

The Calming Waters Counseling office in Charlotte is beach themed. There is a painting with bluefish on the wall and a lamp with seashells. There are even wave sounds in the waiting room. That's to help relax patients, therapist Amanda Crowder said. 

“Therapy is a very vulnerable space," Crowder said, "We have to hold that to make the space safe.”

Crowder takes insurance, which among mental health providers isn’t always a given.

"As much as people pay for insurance, they ought to be able to use their insurance to get that good care," she said. 

It’s hard to find exact figures, but multiple studies find many therapists and psychiatrists do not take private insurance because of low reimbursement rates.

Crowder said therapists have long felt undervalued by insurers. "We don’t necessarily feel like we are getting reimbursed what we are worth,” she said.  

But for Crowder and other therapists who treat state workers, reimbursements will soon increase. The health plan for state employees is going to pay more to reimburse private mental health providers and primary care doctors. The details are still being worked out, but State Treasurer Dale Folwell said the increase will be between 5 and 25 percent. It’s part of an overhaul of health coverage for state workers.

Related Content: State Chooses Insurers For Medicaid Privatization

To fully understand the changes, here's a little bit about how it works now.

The state contracts with Blue Cross Blue Shield of North Carolina, and the company negotiates with doctors and hospitals to decide what to pay for x-rays or heart surgery. But those prices are confidential.   

"The range of what paying people now goes from below Medicare rates to eight times Medicare rates," said Folwell. 

So it’s not clear what each procedure costs at each hospital, a staple of private insurance Wendell Potter said. He’s a former senior executive at health insurer Cigna and he's since become a critic of the industry.

He said the big hospitals or doctors’ groups have a lot of power, as "they have more leverage at the bargaining table than the insurance company.”

Potter said they are typically getting paid more than the independent doctor down the road. Potter said with this process, the losers are the patients and their employers.

“The ones that make out most are providers and insurance companies," Potter said. "Because they make a lot of money. I know because of companies that I worked for. It’s a profitable business”

Here's how the new process is supposed to work:

The treasurer is cutting out the middle man and shifting the power dynamic. He’s telling providers how much they’ll get paid for a service and saying they can take it or leave it. Folwell is using Medicare rates — which are considered enough to cover the cost and sometimes a little profit – as a baseline but will pay on average 77 percent more.

While therapists like Crowder will see their rates go up, many large health systems and providers will see reimbursement rates go down.

That will hurt hospitals that treat a lot of state employees, like Carolinas HealthCare System Blue Ridge in Morganton. Kathy Baily is the CEO.  

“So we would be disproportionally impacted with the state treasurer’s plan," she said. 

The hospital serves a high number of state employees – with a prison and state hospital nearby. Bailey said about a fifth of patients are on the state health plan. And under the treasurer's plan, the hospital's reimbursements for state employees would be cut in half starting Jan. 1, 2020. A drastic cut like this one, she said, could lead to cuts in some services.

But she didn't specify which ones.

“I hate to name any because that potentially puts people into a panic,” she said.

Bailey and others — like the state North Carolina Healthcare Association, who strongly oppose the plan — say there are other ways to reduce spending. These changes to the plan are necessary to get spending under control, according to State Treasurer Folwell. Over the last decade, spending on healthcare for state employees increased by $1 billion.

Coverage is so expensive, he said  that some state workers can’t afford it

“No matter where they work, they have to work one week out of the work month just to pay the family premium for the state health plan," Folwell said. 

Probation officer Chenell Rose is excited to hear the plan is to lower family insurance premiums. She pays about a quarter of her monthly salary for coverage for and her daughter.
Credit Alex Olgin / WFAE

He said he expects to save about $300 million in the first year with these changes. Folwell plans to put the money toward reducing family premiums, but it’s not clear by how much. Still, it’s welcome news for probation officer Chenell Rose of Charlotte. She’s a single mom with a six-year-old daughter. Rose had her daughter on a different insurance for a while. 

"I had Medicaid at one point," Rose said. "But I started making too much money, so I couldn’t have Medicaid anymore.

So she ended up having to switch her daughter to the state plan. That made her monthly insurance premiums about $350 a month.  

“I guess I could only smile thinking about what it would look like long term," she said. 

Rose said the money she saves on insurance she plans to put toward buying a house.