Most Payers Aren’t Accounting for Behavioral Health Services As Part of Pricing

Despite the growing demand for behavioral health care, the bulk of payers are not accounting for related services as part of their forward-looking pricing.

That’s according to a recent report by PwC Health Research Institute, which found that payers’ behavioral health costs remain relatively lower than their other medical costs. Looking ahead, this suggests most payers are doing a poor job factoring in behavioral health when looking at what their total cost of care will be next year.

“In most cases, while the dollars associated with these services are growing, they are still low and do not materially impact the trend development compared to other inflators,” the PwC report notes.


PwC Health Research Institute is an independent research group focused on providing analysis on trends impacting health providers, payers and others.

This report comes as the U.S. continues to face a national behavioral health crisis. Roughly 1 in 5 adults have a behavioral health condition, with 1 in 25 living with a serious mental illness, according to the CDC. In turn, payers of all shapes and sizes have rolled out initiatives to promote access to behavioral health care.

Additionally, PwC’s report found that the number of behavioral health visits was 16.8% above pre-pandemic levels in the first quarter of 2022.


That growth is projected to continue moving forward, with consumers also accessing behavioral health (BH) services via telehealth.

“This large increase has been sustained across all types of BH services, whether it be in-person or telehealth and virtual care,” the report explains. “When it comes to BH, plans reported a significant push from their consumer base for telehealth services during the pandemic that has continued since, growing from 32% pre-pandemic to 60% of all BH visits in the first quarter of 2022. The growing focus on access to care improvement further motivated the use of telehealth services.”

Payers are also looking to shift care to more outpatient settings to drive down costs and improve care, according to PwC. Their reasoning: Recent studies have shown that promoting outpatient behavioral health (OPBHT) as a part of a population health strategy can lower total cost of care.

“Results indicate that health care costs for patient groups with OPBHT use were 10%-15% lower compared to those without OPBHT visits,” the report states. “These findings support the cost-effectiveness of OPBHT utilization, which can act as a deflator on overall medical cost trend in the long term.”

As behavioral health utilization has increased over the last few years, so has the number of in-network providers. The number of in-network behavioral health providers has increased by 48% among commercial health plans, according to PwC, citing data from America’s Health Insurance Plans (AHIP).

AHIP is a political advocacy and trade association that represents health care payers.

While the behavioral health industry has had some new wins, the PwC report does note that the industry has struggled with fraud, waste and abuse concerns – specifically, a lack of oversight in the cost and quality of care.

“A common example has been out-of state behavioral health facilities that are covered by health plans to allow access to care but have limited, if any, oversight on the cost, quality and quantity of services being rendered,” the report reads. “Striking the balance between network adequacy and fraud, waste and abuse will be a challenge for health plans going forward.”

Historically this has been a major issue in behavioral health.
For example, Medicare improperly paid an estimated $580 million for psychotherapy services during the COVID-19 public health emergency, according to an audit from the Office of the Inspector General (OIG). The main reason that the visits did not meet the Medicare requirements was that the psychotherapy time was not documented.