Blue Cross and Blue Shield of Minnesota has big changes in store for behavioral health providers. And they’re making small practices and solo clinicians question how they’re going to stay in business while still treating their poorest patients.
Earlier this year, Blue Cross announced its intention to outsource behavioral health management to Arizona-based Magellan, whose reimbursement rates are significantly lower. Initially slated to take effect months ago, that transition has been postponed indefinitely.
Meanwhile, Blue Cross started cutting its own reimbursement rates. Rates for 45- and 60-minute psychotherapy sessions were reduced in July, then restored a couple months later. Starting next year, rates for 60-minute therapy sessions will drop again, by about 18 percent.
In the midst of these changes, many Minnesota providers received bills from Blue Cross at the start of November, demanding recoupment ranging from hundreds to tens of thousands of dollars due to an error the insurer made in processing Medicaid claims. Blue Cross misclassified clinics and has been overpaying since 2015, the letters read. If providers don’t pony up and return 10 months’ worth of overpayment by the end of April, Blue Cross will forcibly recoup that money through future claims.
It's as though a store mislabeled something, then asked its customers to return and pay more.
Clinicians who received the requests say they have no choice but to pay if they want to stay in network, even though they've already been taxed on that income and did nothing to cause the mistake. Some worry the unexpected expense will drive them out of business, and have decided to drop Blue Cross patients in order to keep their doors open for others.
Lisa Cross, a marriage and family therapist in Maple Grove, found that she suddenly owes $1,000. She doesn’t have that kind of money sitting in her business account from month to month, she says, so her only recourse is to stop taking patients insured with Blue Cross because she won’t be paid for them.
“It’s hard for me because I work with mothers on Medical Assistance or Medicaid because they’re either single moms or from low-income families … with clinical depression and anxiety,” Cross says. “It breaks my heart to have to be restrictive.”
Therapists who have established relationships with longtime patients are facing a serious moral dilemma, says Rochester psychologist Tatyana Karpyak, who owes Blue Cross more than $1,300. That’s a lot of money for an individual practitioner, especially right before the holidays, she says.
Karpyak can’t bring herself to tell her patients to find another therapist because their insurance company won’t reimburse her. But she too is considering turning away those insured by Blue Cross in the future, especially since the insurer can’t guarantee it won't try to make others pay for its mistakes again.
Eric Hoag, the vice president of provider relations at Blue Cross and Blue Shield of Minnesota, says the insurer has already shown mercy. While contracts allow Blue Cross to recoup up to 12 months of overpayments, it is now asking for only 10 months' worth. And while normally providers would be expected to pay within 30 days, Blue Cross is allowing them six months.
Providers who are facing extreme financial challenges can reach out to negotiate more time, Hoag offered.
"We understand these providers play a very important role in our network, and manage the behavioral health conditions of members within that network," he says. "What we want to do is work with them to make sure they continue to participate in our network and see our members."
One northern Minnesota clinician, who asked not to be named because she fears getting kicked out of network, owes more than $20,000. She has already paid all of her providers based on Blue Cross' rates, and can’t ask for that money back. On top of the recoupment, Blue Cross has been withholding $9,000 in reimbursements to her clinic since July, she says.
“I don’t know how I’m going to do it. Overhead, rent, insurance, provider salary -- we’re really gonna struggle,” she says. “What happens when these big companies start taking your money is you have to go out and get a loan just to make payroll. You unexpectedly did all this work, and then they cut your rate and just start holding your money. It’s crazy.”
Tammy Otterson, who runs a mental health practice in Duluth, has also been hit with a $20,000 bill. At the same time, her clinic was recently notified that it would be dropped from network starting next year. Blue Cross' notification letter was explicit that the insurer did not have to give a reason.
That's a big problem for Otterson because Blue Cross is the biggest insurer in northern Minnesota, and the source of most of her income. But there's a silver lining. Since Otterson's clinic will no longer be allowed to bill Blue Cross, the insurer will have no leverage to recoup that $20,000 it wants.
Several of her patients are switching out of Blue Cross in order to continue seeing their therapists, Otterson says. For others, she is wracking her brain to calculate just how much she can afford to discount her services in order to continue to treat them. Her clinic sees about 30 patients whose conditions are so severe that they cannot be safely sent away.
"The reimbursement for some of these patients, you’re questioning whether this is a good business to be in anymore," Otterson says. "You’re giving your heart and soul to help others and at the end of the day, the paperwork, the hoops you have to jump through, they’re squeezing us financially. I think there’s a big question of what’s going to happen to mental health."