Addiction and Mental Health vs Physical Health: Widening Disparities in Network Use and Provider Reimbursement

A deeper analytical dive and updated results through 2017 for 37 million employees and dependents

Executive Summary


The Bowman Family Foundation engaged Milliman to use robust, third party administrative claims data to assess non-quantitative treatment limitations associated with behavioral healthcare services. This report is an update to and expansion of our December 2017 report, which analyzed commercial preferred provider organization (PPO) health plans during calendar years 2013 through 2015 for the following:

  1. Disparities in out-of-network utilization rates for behavioral healthcare services compared to medical/surgical (physical health) services for (a) inpatient facility, (b) outpatient facility, and (c) professional office-based settings.
  2. Disparities in provider reimbursement rates of behavioral healthcare providers compared to primary care and specialty care medical/surgical providers for office-based services.


This update adds analyses of claims for calendar years 2016 and 2017, and expands our prior report to include details of spending on mental health and substance use treatment as a percentage of total healthcare spending. This report also provides separate details for:

  • Mental health conditions vs. substance use disorders
  • Children vs. adults
  • Multiple types of inpatient facilities

KEY FINDINGS

On an overall basis for commercial PPO health plans, disparities have increased since our December 2017 report in both areas studied:

Out-of-network use disparities
  • Consumer out-of-network utilization rates for behavioral healthcare providers were higher than for medical/surgical providers in all five years. Disparities for out-of-network utilization in 2017 were greater than in 2015 for all services analyzed.
  • From 2013 to 2017, the disparity between how often behavioral inpatient facilities are utilized out of network relative to medical/surgical inpatient facilities has increased from 2.8 times more likely to 5.2 times more likely, an 85% increase in disparities over five years.
  • Over the same five years, the disparity for out-of-network use of behavioral outpatient facilities relative to medical/surgical outpatient facilities has increased from 3.0 times more likely to 5.7 times more likely, a 90% increase in disparities.
  • Over the same five years, the disparity for behavioral health office visits relative to medical/surgical primary care office visits has increased from 5.0 times (500%) more likely to 5.4 times (540%) more likely, an 8% increase in disparities.
  • In 2017, 17.2% of behavioral office visits were to an out-of-network provider compared to 3.2% for primary care providers and 4.3% for medical/surgical specialists.
  • In 2017, the out-of-network utilization rates for behavioral health office visits were between 7.0 and 11.5 times higher than for primary care office visits among the 11 states with the largest disparities. Disparities existed in 49 states.
  • In 2017, the out-of-network utilization rate for behavioral health residential treatment facilities was over 50%.

Reimbursement rate disparities

  • Average in-network reimbursement rates for behavioral health office visits are lower than for medical/surgical office visits (each as a percentage of Medicare-allowed amounts), and this disparity has increased between 2015 and 2017. As of 2017, primary care reimbursements were 23.8% higher than behavioral reimbursements, which is an increase from 20.8% higher in 2015. Analyzing disparities in provider network use and contracted reimbursement rates 6 November 2019 Observed differences between physical and behavioral healthcare MILLIMAN RESEARCH REPORT
  • In 2017, for 11 states, reimbursement rates for primary care office visits were more than 50% higher than reimbursement rates for behavioral office visits, an increase from nine states in 2015. Another 13 states in 2017 had reimbursement rates for primary care office visits that were between 30% and 49% higher than reimbursement rates for behavioral office visits.

Substance use disorder (SUD) disparities analyzed separately

  • Disparities in out-of-network use for SUD care compared to medical/surgical care are stark and have increased over the five-year study period.
  • The disparity between how often SUD inpatient facilities are utilized out of network relative to medical/surgical inpatient facilities increased from 4.7 times more likely in 2013 to 10.1 times more likely in 2017. ◼ For outpatient facilities, the same metric increased from 4.2 times more likely to be utilized out of network in 2013 to 8.5 times in 2017.
  • Out-of-network utilization rates for SUD office visits were 5.7 times that of primary care medical/surgical visits in 2013 and increased to 9.5 times that of primary care medical/surgical visits in 2017.

Disparities for children vs. adults

  • Disparities in out-of-network utilization for office visits are greater for children than for adults, even as disparities related to reimbursement levels are greater for adults than children.
  • In 2017, a behavioral healthcare office visit for a child was 10.1 times more likely to be to an out-of-network provider than a primary care office visit—this was more than twice the disparity seen for adults. By 2017, disparities in reimbursement rates between behavioral healthcare office visits for children and primary care office visits for children have narrowed, yet the out-of-network use for behavioral health office visits for children were higher in 2016 and 2017 than in 2015. This data highlights that reimbursement parity alone may not be sufficient to achieve parity of access to in-network care.

Spending on mental health and substance use disorder as a percentage of total healthcare spending.

  • Spending for mental health treatment (excluding prescription drugs), as a percentage of total healthcare spending, has been consistent, between 2.2% and 2.4% in the study period.
  • Spending for SUD treatment (excluding prescription drugs), as a percentage of total healthcare spending, has increased from 0.7% in 2013 to 0.9 % in 2017.
  • The percentage of total healthcare spending that is attributed to both mental health and SUD healthcare combined, including prescription drugs, was 5.2% in 2017, a slight decline since 2015. Improved access to behavioral healthcare services could reduce overall healthcare spending because, as shown in a separate Milliman study,1 spending on “physical health” (i.e., medical/surgical) is approximately two to three times higher for patients with any ongoing behavioral health diagnosis.

CONCLUSIONS 

The federal parity law, the Mental Health Parity and Addiction Equity Act (MHPAEA), which has been in effect for the five-year period covered by this report, has rules that encompass provider payment rates and network adequacy. Our findings indicate that disparities exist in both network use and provider reimbursement level when comparing behavioral healthcare to medical/surgical healthcare. While MHPAEA federal rules state that disparate results are not in and of themselves definitive evidence of noncompliance, significant disparities, such as high out-of-network use of behavioral health providers and/or lower reimbursement for behavioral providers, could point to compliance problems. Health plans should carefully review their processes in order to ensure compliance. A separate Milliman white paper discusses a set of guidelines that has emerged as an approach increasingly being used for such compliance review processes. Reimbursement rates are impacted by many processes and factors, and Milliman is not providing an opinion on whether any particular reimbursement rates are appropriate or fair. 

It is important to note that claims data, such as that used in this report, does not reveal those consumers who received no treatment whatsoever, due to unavailability or unaffordability of care or for other reasons. 


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