In 1985 I worked for a small health plan setting up a mental health provider network in western Massachusetts. We contracted with psychologists for $58 for 90806, the most commonly reimbursed procedure code. This was a deeply discounted rate that led to some grumbling from providers who were used to a higher rates from Blue Cross Blue Shield and other payers. No surprise that some providers refused to join for that reason. I mention this because I read today that Humana and its wholly owned subsidiary LifeSynch have lowered reimbursement rates for 90806 to $58 for its Illinois providers.* Between 1985 and 2012 the cost of living has increased 78.2%! So if the 1985 rate had kept pace with inflation, providers today would receive about $103 for 90806. And Humana and LifeSynch are not alone. This year: Florida BCBS has reduced rates for the most commonly billed mental health procedure codes by 33 – 54%. Kansas BCBS and Kansas City BCBS have reduced rates by 18-35%. California Blue Shield reduced it’s already rock bottom rates by 9.1%–from $60 for 90806 to $55–when it changed managed care vendors. The responsibility for reducing these rates in each instance was off loaded from the health insurer–Humana, Florida BCBS and Kansas BCBS, Kansas City BCBS, and California Blue Shield–to a carve out managed care company–LifeSynch (Humana), New Directions (Kansas BCBS and KC BCBS), or Magellan (California Blue Shield.) Better that the carve out company take the brickbats than the parent company! These reductions hit clinicians hard. But they hit them even harder when you factor in that the **actual claims paid rate achieved by managed care companies tends to be significantly lower than for parent health insurance company**. But more about this in my next post when I present a data analysis of several hundred thousand mental health claims. *I just ran our reimbursement data for Magellan (n=7778) for 2011 and found that their mean payment rate for 90806 nationally was $58.65, with a mean payment for all codes of $48.12.