Episode 245 | Are Insurance Companies Taking Over Mental Health Practices? Here’s What You Need to Know

Maureen Werrbach (00:00:02) – Welcome to The Group Practice Exchange Podcast, where we talk about all things related to group practice ownership. I’m your host, Maureen Werrbach. 

 

This episode is sponsored by Therapy Notes. Therapy notes is my favorite EHR, and it’s one that I’ve been using in my own group practice since 2014. They’ve got everything you need to be successful in your group practice, and they’re constantly making updates and have live support. If you want two free months of therapy notes, go to therapynotes.com/r/thegrouppracticeexchange. 

 

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Maureen Werrbach (00:01:06) – Hello. Hello.

 

Maureen Werrbach (00:01:07) – Today I want to talk about issue two of The Visionary and share some of the topics that were included, and talk a little bit more in depth about one specific article inside the Visionary magazine. So I know I spoke a few months ago about what the process was like of building a Visionary Magazine, and I’ve been super excited and just given a lot of energy in creating these magazines and being able to connect with other visionary leaders in the health care world.

 

Maureen Werrbach (00:01:40) – And so too, it’s a little different from issue one, and there’s just so many really cool topics. We talked about mental health in the metaverse, a new frontier of mental health care in the metaverse. We had someone who came in and talked about finding brand clarity and changing times. We had someone come back in who was in our first visionary magazine talking about embracing the exhale, the art of letting go in group practice, ownership, a very timely topic, especially in our industry. I wrote an article about global advocacy for liberation. As visionary leaders, we had someone write an article on ten ways to work ten hours less every single week as business owners, very timely as well. As I know, a lot of group practice owners are feeling overworked. We had an article about leading from a grounded presence. Five things that we can stop doing and start doing as a leader. And then I wrote two more articles, one called Health Care Hijack navigating the murky waters of insurance owned mental health practices and Navigating the aftermath, the change, health care, cyber attack.

 

Maureen Werrbach (00:02:47) – And then lastly, we had a great article written by someone who specializes in psychedelic therapy trends and pathways. And that essentially was all of the second issue of the Visionary. Now, if you don’t know anything about the visionary or you’re interested in getting the next issue, we do it every single quarter. It’s in print and digital format. You can go to the group practice exchange.com and you’ll see it right on our homepage, the visionary. And you’ll be able to jump in there and grab your copy of the next issue. So I want to talk today specifically about insurances coming in and starting to own mental health practices, and just share a little bit of my thoughts on it, the reasoning behind it, and what we can do. This article is built on an article that I wrote in the first issue of The Visionary called The Future of Mental Health Care, and a lot of people had questions and wanted more insights into what I know and what I’m thinking and what I’m forecasting based off of the research that I’ve been doing.

 

Maureen Werrbach (00:03:53) – And so that’s what this article had. And so in the first issue, I talked about intercompany eliminations and the increasing trend that health care insurance companies are engaging in using intercompany eliminations in order to acquire good practices. And so if you want more information on that, you can get issue one of the visionary as a way to see sort of what it looks like in that article will be in there, but it essentially involves insurance companies owning their own health care providers, including mental health group practices, where they can manage how health care dollars are spent. And what it’s doing is circumventing the Affordable Care Act’s requirement that at least 80% of premium health care dollars be spent on member health care. So the ACA has a requirement that insurance companies use 80% of their premium health care dollars that they get from members spending, you know, hundreds of dollars every month on their premiums. That 80% of that those dollars have to be spent on member health care, right? It can’t be used towards profit. So profit can only be around 15 to 20%.

 

Maureen Werrbach (00:05:04) – But they’re circumventing that through this idea of intercompany eliminations. So I was thinking about the impact that it has on the general public and what the implications are for it. So on one hand, the insurance companies can argue that owning health care providers helps them streamline services and reduce costs. And theoretically, it can lead to improved care and coordination and maybe lower premiums or out-of-pocket costs for patients. But there are so many concerns that this could also lead to reduced choices for patients, as insurance companies essentially own all of the practices, you know, with time. And they’re obviously going to be prioritizing cost over quality, and it potentially can influence the type of care patients received based on financial considerations rather than medical necessity, which I think is one of my biggest concerns as a consumer who has health insurance and a provider who accepts health insurance. There are some legal and regulatory implications. So legally this trend is testing the boundaries of ACA’s medical loss ratio and also called MLR provision, which was designed to ensure that a majority of the premium dollars are spent on patient care rather than on profits or administrative costs.

 

Maureen Werrbach (00:06:22) – So by acquiring health care providers and practices right with they own good practices, they are essentially then owning the providers within those practices because they own the health insurance company, and now they’re putting their money into the group practice, which allows them then to have a higher profit margin in the practice. So by acquiring health care providers, insurance companies can arguably shift more expenses into the patient care category, even if the money stays within the company and doesn’t actually go to the patient’s right, it’s going to the group practices that they own, which they are considering the health care providers. In reality, it’s just owned by the same insurance companies and is not going to the providers. So it can make it really challenging for regulators to ensure that the funds are being used in the way that they’re expecting it to be, as intended by the law. And I’m assuming that it’s definitely going to be revisited by the government at some point. And I know they’re already starting to look into it as a way to, you know, ensure that they maybe rewrite the law or add a little bit more clarity into it so that insurance companies can’t be doing this.

 

Maureen Werrbach (00:07:37) – The effects that I think it has on small mental health group practices is pretty big. I think small, independent mental health practices can find it increasingly difficult to compete with insurance owned groups, ones that are owned by insurance companies, which can leverage their size and financial resources to negotiate better payment rates. They can invest in technology, they can offer a broader range of services. And so all of this could lead to further consolidation in the health care system, which reduces diversity and competition, which is essential for innovation and quality improvement. Smaller practices might be forced to sell to larger entities or to close, which limits patients access to diverse care options. And one of the things I think is really important is that we as consumers, right? We also have health insurance outside of being providers. We’re consumers. We should be able to have a choice in choosing who we see. And if one company like UnitedHealthCare or one health insurance company owns pretty much all of the mental health care landscape, it takes away our choice and being able to invest our dollars in specific providers or companies.

 

Maureen Werrbach (00:08:48) – So forecasting with the future, when I think about, like looking ahead, the trends of insurance companies acquiring mental health and other health care practices, because this is happening outside of health care, too. Insurance companies own hospitals like whole hospitals already, and we might not be aware of it because it’s just outside of our purview, because we’re focused as health care business owners on mental health care. But this has been happening for some time now, and it’s just now starting to reach the mental health care landscape. But as it’s likely to continue, and it’s driven by financial incentives and a potential for increased control over health care delivery, I think this can lead to further consolidation in our mental health industry, which I think has really significant implications for access to care, quality of care, and the cost of health care services altogether. Also, I think this trend could prompt a push for stricter regulations and oversight to ensure that the spirit of the ACA’s MLR provision is upheld. So policymakers already are looking into this, and they might introduce new laws or regulations that are aimed at preserving competition in the health care market and protecting patients rights to high quality care.

 

Maureen Werrbach (00:10:02) – Also, I think there could be more emphasis on transparency requiring insurance owned practices to disclose more information about how they’re allocating resources and making care decisions. So these are just some things that I think we should be on the lookout for. And it’s important, as visionary business owners that were taking time every couple of weeks to really sit in our visionary seats and do some research, simple things we can do is to Google insurance companies and mental health insurance companies and group practice ownership, even using ChatGPT and asking these questions and saying, share with me some resources and some articles on this that can also help. There’s also a really good Substack account that I follow that is called Health Care Uncovered, that you can end the health care breakdown. So there’s two of them, the health care breakdown and health care uncovered that are sub stacks that articles that you can follow and the. Or sharing new information, usually every few weeks from the health care perspective. And there’s such a high focus on mental health care right now within those Substack accounts.

 

Maureen Werrbach (00:11:11) – So just as a a closing sort of thought is, if you haven’t been sitting in your visionary seat and haven’t been prioritizing, researching kind of what’s happening in our industry when it comes to insurance companies purchasing group practices, now might be the time to start dedicating, you know, ten minutes or reading of one article every week so that you can stay informed. It can help you make sure that you’re pivoting how you might need to pivot as this trend continues, and so that it helps you stay afloat as a small, independently owned group practice. I’ll see you next week. 

 

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