Prioritizing The Elimination Of Prior Authorizations For Inpatient Psychiatric Care

“Approximately one in five adults and one in six children experience mental illness each year in the U.S. [..] Patients who require admission to a psychiatric hospital are either acutely suicidal or homicidal due to a psychiatric condition or have experienced a significant decline in their ability to function such that they cannot safely care for themselves in the community due to psychiatric illness. [..] Mood disorders are the most common reason for hospitalization for individuals in the U.S. under the age of 45, aside from hospitalizations related to pregnancy and birth.

[..] to provide coverage for inpatient psychiatric hospitalization, nearly every insurance company requires clinicians to obtain a prior authorization. [..] Patients awaiting admission for surgical or non-psychiatric medical reasons face no such obstacle, reinforcing the stigmatizing notion that the patient with a psychiatric emergency is not as desperately ill or in need of care as, for example, the patient with a systemic infection.

[..] under the MHPAEA [Mental Health Parity and Addiction Equity Act] and ACA [Affordable Care Act], health plans are not permitted to impose a quantitative or non-quantitative limitation of mental health benefits unless such a limitation is comparable and no more strictly applied than the corresponding limitation of medical or surgical benefits. Yet, while required for mental health inpatient admissions, mandated prior authorizations are not required for medical or surgical admissions by most insurance companies, which suggests a differential non-quantitative limitation of mental health vs medical or surgical benefits.

[..] Perhaps insurance companies worry about the value of inpatient hospitalization? Yet, studies have shown that all or nearly all prior authorizations for inpatient psychiatric admissions are approved, meaning they may well be a time and resource sink incentivizing away from a costly but optimal level of care, rather than an actual dispute of necessary care.

[..] concerns have previously been raised that mental health parity would increase total costs of mental health care; however, these theories have been largely dispelled such that, per Barry et al., “opposition to parity on the basis of increased total spending no longer constitutes an evidence-based objection.” Yet, Barry et al. go on to discuss how managed care tactics, such as utilization review, may nonetheless be a way for insurers to “discourage enrollment by people with mental illnesses.” Insurers may also resist the elimination of the prior authorization requirement because inpatient stays require a larger expenditure up-front.

[..] We call for improved oversight and enforcement of federal parity laws and urge other states to follow suit with the recent steps taken in Massachusetts and New York. Moreover, improvements in outpatient systems of care for psychiatric patients could prevent more costly inpatient stays in the first place. While a short supply of psychiatrists has often been touted as the limitation to outpatient psychiatric care, a recent study suggests that under-reimbursement and increased administrative burden relative to other physicians – likely violations of the parity laws as well – drive psychiatrists out of insurance networks.”

Full blog post, Becker J, Accordino R and Hazen E. Health Affairs Blog 2020.10.23