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Rant-o-Rama: Blue Cross’ end run around the mental health parity law

insurance and mental health

I know it’s only September but I think it’s safe to say that Blue Cross and Blue Shield is the undisputed winner of the 2011 If-At-First-You-Don’t-Succeed  Award.

After losing the decades-old mental health parity battle with the passage of the Mental Health Parity and Addiction Equity Act in 2008, Blue Cross and Blue Shield has orchestrated a very clever end run around the new law.

Here in Florida, it will work like this: As of Nov. 30, BCBSF will cancel is contracts with mental health care providers and switch to a new managed care vendor – New Directions Behavioral Health of Kansas City, Missouri. Providers – psychologists and mental health counselors – will have to decide if they want to sign a contract with New Directions in order to continue treating their Blue-Cross insured patients.

This may look like nothing more than common-sense corporate housekeeping but it is shaping up to become a devious scheme to deny mentally ill patients the treatment they are legally entitled to under the new parity law.  Here’s the rub: in some cases New Directions is paying counselors 30 percent less than Blue Cross for the same services.

Here’s what puzzles me: How can New Directions claim its reimbursement rates are “usual and customary” when BCBSF was paying mental health providers 30 percent more for the same services? Whose “usual and customary” rates are we supposed to believe? New Directions or BCBSF?

You could argue that New Directions’ “usual and customary” data are more accurate because the company specializes in mental health case management. I might even believe that except for one little problem: Blue Cross and Blue Shield and New Directions are partners.

This seems a little sketchy, doesn’t it? Especially when you consider that BCBSF sent out notification letters earlier this summer and gave providers between 15-30 days to sign on with New Directions. What’s the rush? Connie Galietti, executive director of the Florida Psychological Association, expressed the same concern, along with five other disturbing requirements in the contract, in her Aug. 10 letter to Kevin McCarty, Florida’s insurance commissioner, and Jeff Atwater, the state’s Chief Financial Officer.

“We are concerned that this short time frame is designed to scare psychologists into jumping quickly to accept the unfavorable new ND contract before they have had time to consider its significant implications. The contract, with attachments, is 28 pages long.”

The FPA asked the the regulators to order BCBSF and New Directions to give Florida psychologists 30 more days to make their decisions. The FPA also suggested that BCBSF’s new mental health claims process violates the Mental Health Parity Law “because these substantive and/or unusual changes are being applied to BCBS’ mental health services but not its medical or surgical services.”

In response, the insurance commission’s office had a discussion with BCBSF. The insurance company said it did not intend to enforce the 15-day deadline. However, a new deadline was not given, leaving providers up in the air.

As for reimbursements rates and assurance that there will enough providers in a given area, BCBSF “has robust standards to ensure that reimbursement rates and numbers of participating providers will be adequate,” according to the commissioner’s office.

Finally, the commission passed the buck on the alleged parity violation: “BCBSF states it is reviewing the matter with its outside counsel to ensure compliance with federal law. I will note that the office of insurance regulation has no jurisdiction with respect to enforcement of federal law.”

True, but the commissioner certainly could have referred the matter to the Justice Department. Of course that would be asking a lot of a politician. We should know by now that politics and insurance don’t mix.





Photo by Hannaford, available under a Creative Commons attribution license.

Rant-o-Rama: Blue Cross’ end run around the mental health parity law

Christine Stapleton

Christine Stapleton has been a journalist for 35 years. She is now an investigative reporter for The Palm Beach Post. In 2006, began writing a blog for PsychCentral called Depression on My Mind. Her latest blog, Addiction Matters, draws on her 19 years of sobriety and her coverage of the drug treatment industry in South Florida.

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APA Reference
Stapleton, C. (2011). Rant-o-Rama: Blue Cross’ end run around the mental health parity law. Psych Central. Retrieved on September 28, 2020, from


Last updated: 12 Sep 2011
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