Whether Psychiatry Is Up to ‘Dirty Tricks’ Is Question In Proposed State Parity Laws

By John Thomas
May 1, 1998



Washington–Psychologists run the risk of being the “bad guys” if they overtly attempt to kill proposed state parity laws limited to Severe Mental Illness (SMI) diagnoses, several state psychological association leaders were told here recently.

Still, Ronald E. Bachman, an actuary at Coopers & Lybrand in Atlanta, told the state leaders there are dangers involved in accepting state parity laws that are limited to SMIs.

But many states have adopted the SMI model in their parity laws, often when it appears the choice is between no law and an SMI.

Under an SMI parity law, only certain diagnoses would be recognized as eligible for reimbursement from insurance companies. And, since such diagnoses are genetically or biologically based, the bulk of reimbursement would go to physicians, not other mental health professionals, including psychologists.

SMI diagnoses include schizophrenia, schizoaffective disorder, bipolar disorder, dementia, autism, panic disorder, obsessive compulsive disorder, manic depressive disorder, major depression and other disorders thought to be biologically based.

No other mental health diagnoses would be eligible for insurance reimbursement in states that adopt the SMI model.

States that have adopted the SMI model include Delaware, South Dakota and Louisiana, although many more states, including Hawaii, have SMI parity bills pending. In Utah, an SMI parity bill failed to make it out of committee last year. Robert Gabriele said that 40 state parity bills had been introduced in 20 states during the current legislative session. More than 20 of these proposals are broad-based parity bills.

The National Institute of Mental Health estimates that there are about five million non-institutionalized Americans with Severe Mental Illness diagnosis.

To date, no state psychological association has come out in direct opposition to SMI parity bills, mainly because such opposition puts psychologists in the position of killing any parity bill.

However, there was no clear consensus among the state leaders on either how to tackle the tricky problem of undermining SMI parity bills or whether it made sense to accept an SMI in hopes of amending the law in later legislative sessions to include diagnoses of less severe mental problems.

In Delaware, both the governor and the legislative leadership told the state psychological association that “it was SMI or nothing.”

And, even though there were some who advocated for killing SMI parity legislation and trying to obtain a broad-based parity law later, it was agreed that psychologists would have a hard time doing it on their own. Most agreed that coalitions be formed in favor of broad-based parity and that they maintain unity when attempting to derail SMIs.

However, Bachman, while taking neither side of the argument, warned there are at least three drawbacks to the Severe Mental Illness approach to parity laws.

He said “diagnosis creep” would occur under SMIs. In order to get insurance reimbursement, more and more mental health professionals would make a diagnosis of Severe Mental Illness. And, going to a SMI model would send the message that mental health problems other than SMI are “not important.”

Bachman noted that the SMI model “is being sold as a way to show that mental health treatment won’t cost employers or insurance companies more money and that later on other-than-SMI diagnoses could be incorporated into the law.

However, he explained that once an SMI parity law was on the books, it might even be harder to expand the range of diagnoses than it was to pass the initial SMI parity law.

Meanwhile, during coffee breaks and other informal discussions at the APA Leadership Conference in March, concern was being expressed about physicians being part of state coalitions in support of state parity laws. Most of that concern centered around the experience of a few who said psychiatrists would withdraw from the coalitions once they obtained what they wanted all along–an SMI parity law that reimburses biological illness while leaving reimbursement for other mental illnesses in a quandary.

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