Organized psychology raises urgent concerns with Florida insurance regulators

Key mental health groups support efforts to address urgent concerns with Blue Cross Blue Shield of Florida’s major changes to mental health and addiction recovery services

By Legal and Regulatory Affairs Staff

March 29, 2012—The APA Practice Organization (APAPO) and the Florida Psychological Association (FPA) have written (PDF, 322KB) to the Florida Office of Insurance Regulation (FLOIR) to address urgent concerns with Blue Cross Blue Shield of Florida’s (BCBS FL) major changes to mental health and addiction recovery services.

Issues raised in the March 23, 2012 letter include: 

  • Failure by BCBS FL to pay psychologists and other mental health professionals for more than three months, in violation of the state’s prompt payment laws 

  • Shortage of mental health professionals in  the company’s network in the aftermath of a large cut in reimbursement rates; and 

  • Inadequate and confusing information given to consumers/patients regarding major changes to their mental health and addiction recovery benefits.

Supporting the letter are key mental health groups: National Alliance on Mental Illness (NAMI), NAMI Florida, Inc, Mental Health America, American Academy of Child and Adolescent Psychiatry, and the TeenScreen National Center at Columbia University.

The letter was supported by data from an informal survey of patients and providers on which APAPO and FPA had collaborated with the American Psychiatric Association and some of the mental health groups listed above. The survey was aimed at gauging the impact of BCBS FL’s drastic changes to its mental health and addiction recovery services in order to provide information to legislators and enforcement agencies. The survey was launched in February 2012 and has so far elicited more than 450 responses.

Survey data provided the following information: 

  • 60.8 percent of psychologists and 70  percent of psychiatrists report patients dropping out of or slowing down their treatment.  

  • 65 percent of psychologists and 76  percent of psychiatrists report disruption in their patients’ care. 

  • 60 percent of psychologists and 73  percent of psychiatrists report that patients have stopped using their insurance coverage or have paid out-of-network fees as a result of the transition. 

  • 93.9 percent of psychologists do not think that the transition from BCBS FL to New Directions was handled in a manner that minimized impact to patients.

  • Nearly 98 percent of psychologists and 94  percent of psychiatrists do not think that patients were given clear and adequate information about the transition.


As reported in PracticeUpdate, last summer BCBS FL announced a major transition in its mental health care delivery system (hereafter referred to as the “transition”). The company was terminating its network of mental health providers and requiring them to reapply to contract with its behavioral health carveout company, New Directions Behavioral Health, LLC (New Directions) at substantially lower reimbursement rates and with restrictions on serving or referring patients out-of-network. 

New Directions, a partially owned subsidiary of BCBS FL, was to take over management of mental health and addiction recovery services, but BCBS FL remained responsible for paying claims.

In early August, FPA in collaboration with APAPO wrote FLOIR (PDF, 579KB) about initial problems with the New Directions contracts: New Directions seemed to give psychologists only 15 days to decide on a contract that had troubling restrictions on referring or serving patients out-of-network and a large rate decrease.

FLOIR promptly responded, assuring the associations that psychologists would have more time to consider the contracts and ordering BCBS FL to revise the troubling contract terms. But in response to FPA’s concerns about the rate cut’s impact on patient access to care, FLOIR cited BCBS FL’s assurances that it had “robust standards” to ensure that reimbursement rates and the number of participating providers will be adequate.

APAPO and FPA raised those concerns about patient access to care in their October 2011 letter to the federal parity regulators, arguing that a large rate cut applied only to mental health care violated the Interim Final Rules implementing the Wellstone-Domenici Mental Health Parity and Addiction Equity Act of 2008 (PDF, 56KB). [This protected content is available to Practice Assessment payers.]

Over the winter, the transition of mental health care proved to be even more chaotic than FPA had feared. Psychologists and their patients reported confusion as to whether psychologists were in the New Directions network, and whether and at what cost patients could continue to see their psychologist who had chosen not to accept the New Directions contract. Patients reported difficulty finding a psychologist or psychiatrist in the network.

FPA also heard that members had not been reimbursed for more than three months, creating enormous hardship because of BCBS FL’s dominance of the Florida market. Practices reported having to reduce staff or even being at risk for going out of business altogether.

In response to these urgent concerns, APAPO and FPA decided to return to FLOIR, which had provided rapid relief in the past. In contrast to the novel and factually complex parity issues before the federal regulators, the current problems, such as failure to follow prompt pay laws, presented much simpler and more straightforward issues of insurance regulation.

Appended to the letter is a sample of 27 individual comments from patients and psychologists regarding the impact of the transition on patients. That appendix is not included in the copy of the letter (PDF, 322KB) linked to this article in order to protect the confidentiality expectations of survey respondents.

“We are hoping that FLOIR can act quickly to prevent further immediate harm to mental health patients and the professionals who serve them” says APAPO’s Executive Director for Professional Practice Katherine C. Nordal, PhD. “We are pleased to have these important mental health groups joining us in this critical effort .”

For more information, contact the Legal and Regulatory Affairs department by email or at (202) 336-5886.

Florida psychologists are encouraged to participate in our survey. You need only answer the questions you feel comfortable answering. Your employer or provider will not know whether you have chosen to participate. All interested psychologists can sign a petition about this issue.