Message from the Executive Director
Mental Health Clinics, Facing Financial Pressure, Change the Way Social Workers are Employed
There are major changes going on in mental health clinics in New York. Funding for clinics has been changed, requiring agencies with clinics to question their very existence, and several are expected to close. Gene Aronowitz, who has worked closely with agencies to anticipate these changes, reports in the article that follows that not-for-profits have estimated losses totaling $80 million.
One of the major implications of these funding changes has been cost cutting, primarily in terms of how social workers are employed. Based on what the Chapter has learned, social workers are now being employed in many clinics on a fee for service basis, without benefits or leave time.
In this newsletter, Currents is focusing on what has brought this form of employment about and identifying some of the implications for clients and social workers as employees. It has been our intention to present a balanced view of what is taking place, reflecting funding pressures on agencies as well as the experience of social workers in these clinics.
Typically, fee-for-service work is thought of as contracted services, not as employment. In such situations a private practitioner or a group practice would agree to provide services to an organization for a set fee. While some clinics have been doing this, the fee-for-service model now being utilized in a growing number of clinics is based on employing social workers but paying them only for each session with a client.
If clinics were to utilize social workers on a contracted basis, there are limitations that emanate from both the Internal Revenue Service and legal restrictions based on how social workers might qualify for the LCSW. For example, the IRS does not permit organizations that work with consultants or contracted service providers to receive supervision. And according to the social work licensing law, contracted service provision, specifically for psychotherapy, can only be done by a LCSW.
Clinics that employ social workers, on the other hand, may utilize LMSWs provided that they are supervised, and the hours that the LMSWs accumulate, along with the supervision, can qualify them for obtaining the LCSW. Given this, clinics may remain a potential setting for social workers to obtain their clinical license.
Social workers comprise 65 to 70% of all professionals who provide mental health services in the United States, and this statistic likely reflects the percentage of social workers in New York, as well. And while social workers work in many service delivery systems, more social workers are employed in mental health than anywhere else, with clinics being an important setting.
According to agency administrators that Chapter staff have spoken with and social workers who have contacted the Chapter office, payment for this fee-for-service employment ranges from $35 per session up to $55, but it is possible some settings are paying more than this (or less, on the lower end).
Some of our contacts say that these fees represent a higher rate than would be the case for normal employment, compensating staff in recognition that they will have to purchase benefits themselves. However, social workers are telling NASW-NYC that their out of pocket costs for benefits exceeds this differential.
Another point where different sources give somewhat different perspectives is in regard to time for paper work. Social workers are reporting that they are responsible for doing documentation on their own time and are not being paid for it, while this has also been explained as being built into the fee for the session and that a session includes time for paperwork.
An agency administrator shared that staff are eligible for benefits once a certain threshold number of sessions have been held, but questions remain as to how many agencies might be doing this as well as the number of sessions that must be achieved, over what period of time. Social workers have shared that providing benefits on the basis of the number of sessions exerts pressure to achieve this threshold.
In order to better understand what has led mental health agencies to change their employment model, Currents approached a long time social worker and administrator of mental health agencies, Gene Aronowitz. Mr. Aronowitz was closely involved in anticipating the impact of funding changes for mental health agencies and provides us with a detailed understanding of what led to this development.
Concerns about these employment changes first came to the Chapter’s attention from members who were long time employees in clinics, all seasoned LCSWs. We have compiled a list of the concerns that they have shared with us. These concerns relate to employment and the expected impact of fee for service work on clients.
Responses to the issues presented here are welcomed. We welcome additional information about what agencies are doing and the impact on clients and social work employment. We will not publish anything we receive without your permission. Please send us an email at firstname.lastname@example.org.
A Brief (But Explosive) History of Pay-Per-Session Social Work Practice In Mental Health Clinics
Eugene Aronowitz, PhD, MSW
Eugene Aronowitz has been a management consultant in Community Mental Health over the last 20 years. He has served as the Commissioner of Community Mental Health and Deputy Commissioner of Social Services in Westchester County and as Deputy Director of Public Welfare in Ohio. Mr. Aronowitz has a BA in Education from the University of Delaware, an MSW from New York University, and a PhD from the University of Chicago.
Making Sense of Funding Changes for NY State Clinics
In early 2010, the New York State Office of Mental Health (OMH) announced its intention to change the regulations for the operation of mental health clinics. The impetus, OMH said, was the threat by the federal government to withdraw financial support for COPS (Comprehensive Outpatient Program Services).
The COPS program was implemented in the early 1980’s primarily to utilize federal dollars to reduce the amount of state aid then being provided to mental health clinics under the 1954 New York State Community Mental Health Services Act. COPS took the place of state aid and for agencies included in the COPS program up through 2010, Medicaid payments for services consisted of two components: the Medicaid base rate for the service and the supplemental COPS payment. For example, if the Medicaid rate for psychotherapy was $80 and an agency received a COPS supplement of $100, the payment for a session with a client on Medicaid would be $180.
COPS rates varied from agency to agency, depending on how much state-aid the agency received before the COPS program was implemented. Clinics with high COPS rates received a large supplement for every Medicaid unit of service while those with low COPS rates got a lesser amount. It was assumed that the COPS supplements would enable the clinics to provide services to clients who were uninsured just as they were expected to do earlier with state aid.
According to the new regulations (Part 599 of the Mental Hygiene Law), which went into effect on October 1, 2010, the COPS supplements were to be phased out over four years and new higher Medicaid rates were to be phased in during the same period.
As OMH moved toward implementation of the proposed regulations, it developed a projection tool that agencies could use to estimate their Medicaid revenues throughout the four-year period. After information regarding the anticipated service configuration was entered into the tool, it projected how much Medicaid revenue a clinic would generate in the new system and compared that with the amount of Medicaid revenue it generated prior to implementation. OMH offered a series of “how-to” sessions to help the agencies use the projection tool. These sessions were packed; no matter how big the room, there were never any unoccupied seats.
Organizations Project Funding Losses of $80 Million
The Coalition of Behavioral Health Agencies decided to sample a group of mental health clinics in the New York metropolitan area to get a broad view of the impact of the proposed regulations. Dan Still (Former First Deputy Commissioner of the NYC Department of Health and Mental Hygiene) and I were hired to conduct a “stress test” in which we reviewed the projections of 20 agencies with clinic treatment programs located in New York City, Westchester, Nassau and Suffolk Counties. The 20 agencies in this review collectively operated seventy-three mental health clinics and delivered a high proportion of all the mental health treatment sessions in the metropolitan area.
The 20 sample agencies projected that, in the aggregate, they would lose almost $80 million in Medicaid revenue over the four year phase-in period including about $33 million during the fourth year (and, presumably, every year thereafter), with funding losses ranging from a 7.6% to 60.6%. Agencies with high COPS rates would lose the most and those with low COPS rates would lose the least.
We assumed that these findings could be generalized to the agencies in the metropolitan area that were similar to those in the sample. All clinics in the sample were designated as COPS 1 providers, meaning that they received COPS supplements at the beginning of the COPS program. In 2000, in an attempt to partially equalize revenues, OMH designated other licensed clinics as eligible for COPS supplements although this latter group, designated as COPS 2 providers, had much lower COPS rates than most of the COPS 1 agencies.
Reimbursement and Hiring Practices
The extra revenue that resulted from having a high COPS rate allowed the agencies to hire salaried clinicians with often costly fringe benefits. Some of the agencies with strong union contracts had fringe benefit costs exceeding 50% of salary expenses. Most of the COPS 2 agencies simply could not afford that kind of staffing pattern and a high proportion of their clinicians were paid only after they completed a treatment session and did the required paperwork (although some agencies paid extra for supervision and training).
I am calling these clinicians pay-per-session workers for the sake of clarity. Many terms have been used to describe them: some were called independent contractors and they received a 1099 tax form; some were called part-time or hourly employees, but their hours were only counted when they completed a session rather than employing the usual method of counting consecutive hours at the agency. Other terms were also used, among them fee-for-service workers and contracted clinicians. The terms of engagement were usually carefully crafted so as not to run afoul of the Internal Revenue Service which closely monitors how agencies distinguish between independent contractors and employees. Whatever they were called, these clinicians generally did not receive fringe benefits.
The following table shows the hiring practices of COPS 1 and COPS 2 clinics prior to the implementation of the new regulations. As can be seen, virtually all of the MSWs in COPS 1 agencies were salaried as compared to only 39% in COPS 2 agencies. The rest were paid per session or contracted.
We did not have access to the projections of those who predominantly employed pay-per-session clinicians but all of those with whom we spoke said they would do fine under the new regulations because of the higher Medicaid rates. While they previously had very low Medicaid revenue per unit of service compared to their COPS 1 counterparts, they also had relatively low expenses, primarily because of the absence of fringe benefits. COPS 1 agencies were well aware that COPS 2 agencies were looking forward eagerly to the implementation of the new rules.
Fearing for Survival, Agencies Move to a Pay-Per-Session Model
During the four year phase-in period, there were increases in payments for services to clients covered by Medicaid Managed Care that resulted, in part, from advocacy by the Coalition of Behavioral Health Agencies, based on the conclusions of the “Stress Test.” Therefore, the anticipated losses did not turn out to be as draconian as originally projected but for most, the financial picture continued to be extremely problematic. Some clinics had to be closed and others, fearing for their very survival, concluded that they would need to reduce their expenses dramatically and, for most, that meant minimizing their fringe benefit costs. Some agencies changed full-time salaried positions into part-time slots that did not qualify for fringe benefits. Others decided to change their hiring practices from salaried to pay-per-session clinicians.
For some organizations the change was swift. In addition to normal attrition, many salaried employees were laid off and replaced with clinicians without fringe benefits. For others, there was little or no change in their hiring practices; some chose not to make changes but others, particularly those whose employees were protected by strong unions, were not able to do so.
Whether they changed or not, agencies facing deficits understood that shifting from salaried to pay-per-session clinicians would be a prudent approach to budget management. Not only could the agencies minimize fringe benefit costs, but they could also pay a clinician considerably less than they could charge for the session. For example, clinics generally paid their clinicians under $60 for a 45 minute psychotherapy session and could expect a Medicaid fee of about $125. In addition, agencies might not be impacted by no-shows; if the client did not appear for the session, which unfortunately happens quite often, most clinicians would not be paid at all. It was a good business model that helped many agencies avoid the debilitating crush of excessive deficits.
Implications of Services for Clients
I don’t know what implications the use of pay-per-session clinicians has or will have on the quality of service in mental health clinics. It seems to me that there can be a lapse in continuity of care when a client experiences a crisis at a time when their pay-per-session clinician is not at the agency, whereas a salaried employee might be available more often or a knowledgeable salaried colleague might be available to cover. I also understand that there is a high turnover because many clinicians do pay-per-session work only until a regular job becomes available. That can’t be good for clients. Notwithstanding these impressions, I’m not in a position to decide if clinics with salaried employees are “better” than those without and I don’t know of any empirical evidence that resolves this question.
The Future of Stable Employment and Benefits
However, I do know that the implications of this change are huge for today’s clinical social workers unless they happen to be in private practice and, even that is becoming problematic. When I became a social worker 50 years ago, I did not expect a very high salary. However, I did expect stable employment and I believed I would be provided health insurance, be enrolled in a pension plan, get vacations, sick time, and other forms of paid leave. These benefits were a part of every job I had throughout my salaried career until I became a private consultant in the 1990’s. When pay-per-session compensation entered the mental health clinic landscape, it was my impression that most of these clinicians were moonlighting – working extra hours to supplement the wages they got from their day-job which provided the benefits they needed. Then, I began to hear that almost none of the available jobs in mental health clinics were salaried and I believe that that is the current reality. Most social workers operating in mental health clinics – a large proportion of social work practitioners - can no longer look forward to stable employment with benefits as I did when I entered the field. I think this is deplorable even though I have advised my clients to adopt a pay-per-session model in order to be able to stay in business.
I can hear guidance counselors saying to their graduating students: If you want to do piecework, get into the garment industry or become a clinical social worker.
Readers are invited to respond to the issues and concerns raised here. Please email email@example.com.
What Social Workers Are Saying About Fee-For-Service Employment in Mental Health Clinics
Chapter members have contacted NASW-NYC expressing their concerns regarding the employment of social workers in mental health clinics. Numerous themes emerged and are listed below.
The purpose of creating this list is to identify key challenges and to invite a dialogue addressing clinical practice within the context of stark fiscal realities faced by mental health agencies.
They raise legitimate concerns that all stakeholders in the profession and human services more generally need to take seriously.
Readers are invited to respond to the issues and concerns raised here. Please email firstname.lastname@example.org.
One fundamental concern that members have reported is that clinics are under pressure to see a large number of clients each week. Requiring maintaining high client caseloads. For example, in order to meet quotas, social workers reporting that they often scheduling 60-80 clients per week with the assumption that there is a no-show rate of 50% with a psychiatrically vulnerable population. According to these social workers, requirements to schedule so many clients each week, in conjunction with the lack of guaranteed income and benefits, negatively impacts clinicians and the quality of care they can provide.
What Social Workers Are Reporting: Impact on Clients
- “High volume” caseloads, “ferocious” quotas and productivity requirements are causing social workers to question the quality of care they are able to offer. “Sometimes we all just hope nobody on our caseload dies because we were not able to follow up.”
- Social workers are not paid for outreach, required paperwork, supervision or collateral visits. Unreasonable client caseloads and expectations to work excessive hours, for which they are not paid, forces social workers to limit work that is necessary to do their jobs ethically and effectively.
- Untenable working conditions and unreasonably high productivity quotas create challenges regarding the time and energy to attend to the intricate and multifaceted needs of complex, psychiatrically vulnerable clients, including failure to adequately assess need and risk in clients, lack of time for adequate outreach, follow up, and case management needs.
- How do we assist clients with basic self-care when we are not guaranteed basic benefits ourselves?
- When social workers are only eligible for buying into health benefits if they meet 100% productivity requirements and are penalized due to client non-compliance, this impacts quality of care and the ability to form clinically sound therapeutic relationships.
Impact on Social Workers
- Unrealistic caseload requirements and lack of pay for non-client contact hours places an excessive burden on social workers and contributes to high burnout rates.
- Exposure to illness and secondary trauma is risky and at times unsafe. Without health benefits social workers are in potentially unsafe environments without the ability to tend to basic health and safety needs.
- The bar is too high for social workers to obtain health care for themselves or families.
- Social workers are not paid for the time they obtain needed supervision. Supervision of LMSWs is necessary to fulfill licensure requirements for the LCSW and is the existing standard for an LMSW to provide clinical services (Mental health agencies are currently exempt from many licensing requirements).
- Members are projecting that many social workers will not be able to afford to work within a fee-for-service model. They will choose to look at jobs in non-clinic settings.
- Social workers feel that they are working in environments that challenge professional ethics and principles regarding client care.
- There is not time for basic 10 minute breaks or lunch compromises ability to take care of basic needs.
Questions for the Profession
Given the changes in mental health clinics, questions for the profession need to be brought to the surface:
- How many clinics have adopted this model?
- Will the new reimbursement formula for mental health clinics be sustainable in the long term? Will clinics close and will clients find it more difficult to access services?
- Will other settings beyond mental health clinics adopt this “fee-for-service” model of employment?
- Will clinics remain a viable setting for social workers to move toward obtaining the LCSW? Will clinics remain a viable setting for social work interns to gain clinical experience?
- Are there ethical challenges as a result of the parameters of this model, and if so, how can they be addressed?
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