TRICARE contractors propose reimbursement rate cuts for psychologists

Practice Organization opposes rate cuts and seeks feedback from members participating in TRICARE.

Psychologists who treat TRICARE patients could see decreases in reimbursement as high as 30 percent if the Defense Health Agency (DHA) adopts recently proposed payment changes for TRICARE mental health providers.

The payment changes were proposed by Humana and Health Net Federal Services (HNFS), the newly contracted TRICARE mental health insurance carriers, and could take effect this October or in January 2018.

The APA Practice Organization spoke with DHA staff and sent a letter (PDF, 92KB) on June 12 to the agency’s director opposing the proposed reimbursement rate cuts for psychologists who participate in TRICARE. The letter included data collected by the Practice Organization showing that similar large rate cuts often result in significant disruptions to patient care, limited networks and limited access for patients. In addition, for many practicing psychologists, providing services at lower rates is not financially feasible.

The DHA director responded, saying she has tasked her staff with investigating these issues.

Psychologists share feedback on contracts with lower rates

The Practice Organization has received multiple reports from psychologists attempting to independently negotiate with TRICARE contractors. The feedback provided shows how TRICARE is sending psychologists mixed messages about the reimbursement rate cuts. For example:

  • South and North TRICARE region psychologists reported receiving new contracts from Humana that included a 30 percent reduction from rates currently in effect. The new contracts do not go into effect until Oct. 1 or in some cases Jan. 1, 2018, but many psychologists were given only two weeks to consider whether to participate under the new contracts.
  • South region psychologists said they were either outright rebuffed or told to wait until contractors can assess adequacy of the network at a later time. Others received emails indicating that the rate cut was “a mistake” and would not be implemented.
  • Psychologists in the West region said they were offered similar contracts with lower rates from HNFS.
  • Psychologists in the North region were notified that Humana has abandoned the rate cut for the time being, with automatic transfer of providers from HNFS to Humana without any action needed.

In our letter (PDF, 92KB) to DHA Director Vice Admiral Raquel C. Bono, the Practice Organization requested that:

  • DHA assess whether Humana and HNFS are complying with network adequacy obligations, which require that a health plan provider deliver timely and efficient care to its beneficiaries. The Practice Organization also urged DHA to consider more accurate markers of adequacy, including the number of psychologists a beneficiary has to call before getting an appointment, how long it takes to get an appointment, and how far the beneficiary has to travel for treatment.
  • TRICARE order vendors to be clear in communications with providers regarding the status and changes under the agreements and review the contract selection process to ensure that criteria in addition to cost savings are considered when selecting vendors to manage the mental health benefit.

The Practice Organization will provide updates on the proposed rates as we continue to work with DHA.

Share your provider experiences with TRICARE or a TRICARE contractor. Email APA Director of Military and Veterans Health Policy, Heather Kelly, PhD.