Social work providers, as well as other mental health providers, have received notice from the Magellen and Value Options managed care organizations (MCOs) that fees for mental health services are being reduced. NASW (City and State representatives) has joined with NYSPA (New York State Psychological Association) to address this latest development. As Currents goes to press NASW and NYSPA representatives have met with Magellen representatives; and, joint meetings of NASW and NYSPA members have occurred in NYC and Albany.

Claiming higher costs, Empire Blue Cross/Blue Shield and other insurers (managed care organizations, MCO's) are negotiating with behavioral health organizations to manage mental health benefits at a reduced contractual payment. In turn, Magellen and others are reducing payments to providers. Insurers and MCO's have been facing rising costs and declining profits for the past two or three years. Given the pressures of competition, increases in drug prices and other costs, the managed care companies have held prices down with difficulty and, in some cases, with severe financial losses. However, as these MCO's have sought to raise rates, as is now occurring all over the United States, the purchasers of the coverage, employers and government are resisting. Insurers are unable to raise their rates to purchasers as much as they hoped for and, in some instances, rates have been reduced. This clearly is a result of health care in a profit driven system. The MCO's are within the law to summarily reduce provider fees for mental health services. A rate reduction is a modification of contract and the provider had 30 days to reject the proposed modification. Although the time within which to respond is well over, it underscores the importance of being well versed in the contracts into which providers enter. Note that a modification of contract requires 30 days notification. The lower fee can only be instituted after that 30-day period. This is not to suggest, however, that individual protest would help.

At this time the NYC and NYS Chapters of NASW are organizing to combat this trend toward inadequate reimbursement for mental health services. It appears that there is no violation of law in these contractual changes. The issue is political and calls for an organized response and action program at the State and National levels.

Clients (patients) are adversely affected by these changes in reimbursement which will result in the loss of valued, experienced clinical social workers who are or will be leaving managed care. NASW members who are affected by these changes should document what they are experiencing, especially the impact on their clients. Note who the client's benefits are purchased by, i.e., name of employer. Mail documentation to Managed Care Fees c/o NASW, 50 Broadway, 10th fl., NY, NY 10004.