Low Reimbursement Exacerbating the Behavioral Health Worker Shortage

With minimum wage on the rise and unemployment rates at the lowest they’ve been in 50 years, it’s no surprise that a number of industries — from home care to education — are facing labor shortages. Behavioral health care is no exception.

However, low reimbursement from payers for behavioral health services is only exacerbating the problem, experts say, especially considering the much higher rates at which physical health services are typically reimbursed.

“We would love for our members to hire more psychologists,” Chuck Ingoglia, president and CEO of the National Council for Behavioral Health Care, said. “But can you imagine what’s the biggest obstacle to them? Being able to pay them competitive salaries that would compel them to want to work in the public sector.”


Ingoglia made those comments last week during a panel at the Payer’s Behavioral Health Management and Policy Summit, hosted by World Congress, a global provider of health care conferences, and the Association for Behavioral Health and Wellness (ABHW), a group that represents payers managing behavioral health insurance benefits.

Meanwhile, the National Council is a membership organization with more than 3,300 members, most of whom are safety net providers serving populations that largely consist of Medicaid beneficiaries and the uninsured.

“One of the things that we’re very keen on is trying to understand how other health professions have created programs to encourage people to go into them,” Ingoglia said. “The issue that seems to have the most promise is the ability to pay competitive wages.”


That’s an area where behavioral health care providers tend to struggle, largely due to reimbursement. Because physical health providers are typically reimbursed at higher rates than behavioral health providers, they’re able to pay higher salaries on average.

While many of the National Council’s members are reimbursed by Medicaid, which is characterized by low reimbursement across the board, the problem of insufficient payment extends into the commercial sector, too.

In fact, in 2014, insurers paid 13% to 14% less on average for in-network mental health services than fee-for-service Medicare did, according to data published in Health Affairs earlier this year.

However, for non-mental health physician specialties, the same data shows that commercial insurers paid up to 12% more than Medicare did for identical services.

Not only could those gaps worsen the worker shortage by preventing people from entering behavioral health care, researchers said, but they also create access issues for patients in different ways.

For example, the low reimbursement could prevent providers from partnering with insurers to begin with, meaning higher costs for patients.

It could also affect outcomes, according to Arthur Evans, CEO and executive vice president of the American Psychological Association (APA), a professional organization for psychologists.

“If we want to get good outcomes, we have to pay for it,” Evans, who was a panelist alongside Ingoglia, said. “It’s not only how much we pay, but it’s how we pay.”

Rather than free-for-service, more value-based arrangements could better reward providers for their outcomes and allow them to pay higher wages to attract and retain workers, he said. Evans used treatment for opioid use disorder as an example.

“If we want to get good outcomes, we have the incentivize things that we know are related to good outcomes,” Evans told conference attendees. “A lot of those things are not things that we pay for on a fee-for-service basis, so the quicker we can move to payment models that allow providers or provider systems to do what’s right, as opposed to what they’re going to get paid for, we are going to increase the kind of outcomes that we want.”

Meanwhile, Ingoglia pointed to certified community behavioral health clinics (CCBHCs) to illustrate the value of higher reimbursement for behavioral health providers in the Medicaid space.

CCBHCs are a newer type of Medicaid providers that offer a comprehensive range of mental health and substance use disorder (SUD) services for people, regardless of their ability to pay.

They were designed to address financing shortfalls in behavioral health by reimbursing clinics with a higher-than-usual Medicaid rate, which includes money for anticipated costs of expanding services and taking on new patients, according to a fact sheet from the National Council.

“When you’re able to pay competitive salaries, you can hire staff,” he said. “When you hire staff, you can actually serve more people. When you serve more people, you could actually do creative things. … I know that many of the clinics participating in this have seen tremendous increase in the number of people that they were able to serve.”

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