The Missouri Psychological Association (MoPA) has taken the unusual step of turning to the courts to end what it says is discrimination against the profession and restrictions on beneficiaries' access to psychological care under that state's Medicaid program.

After petitioning the Division of Medical Services (DMS) repeatedly to change the rules that prevent psychologists from being reimbursed for caring for certain Medicaid populations, last fall MoPA filed suit against the agency. It charged, among other things, that because psychologists are licensed to perform the mental health services in question, failure to reimburse for that care violates the guarantees of equal protection of the U.S. and Missouri Constitutions. The case is now in the early stages of legal proceedings, according to Lori Levine, MoPA's attorney.

The suit may be of interest nationally as many state Medicaid programs are expanding the services and people they cover, thus becoming a more feasible means for reimbursing for mental health service. According to a 1995 APA survey, psychologists can be reimbursed as independent providers for adult services under Medicaid in only 25 states.

Adding to the suit's significance, say both APA and MoPA officials, is the fact that it is a bold step for a relatively small state psychological association. It's unusual for a state association to file a legal suit and even rarer for one to take a state agency to court, according to Michael Sullivan, PhD, APA's assistant executive director for state advocacy in the Practice Directorate.

"MoPA should be commended for this assertive move," he says.

Jerry Morris, PsyD, past MoPA president, calls fellow members of the approximately 500-member association "the mouse that roared."

History of the case

The twists and turns of the case are rooted in the chronology of several decades. Psychologists in the state historically were not paid for services to adults under Medicaid--even though psychiatrists were--due in part to prototypes in regulations created before psychologists were even licensed in Missouri. (Psychologists are paid in most states for services to children under Medicaid's Early Periodic Screening, Diagnosis and Treatment Program).

For some years there was no strong challenge to the rules preventing reimbursement, according to MoPA executive director George Oestreich, due to the fact that program offered restricted reimbursement and covered limited populations. Then in the mid-1990s, in a number of "heated sessions," according to Morris, MoPA asked DMS to change the rules and pay psychologists for all services they are licensed to do and for which the program reimburses.

But that was a period of tremendous change for Medicaid. Under waivers from the federal government, nearly all states were creating managed-care plans under Medicaid. In Missouri, according to Morris, state officials assured psychologists that virtually the entire program would be transferred to the new managed-care plan and psychologists would be reimbursed under that plan. Thus, there was no need to change the old Medicaid rules.

As promised, the new managed-care plan does reimburse psychologists. But two things have modified the picture. First, the state agency kept the program for serving adults with serious mental illness under the old Medicaid rules, meaning that psychologists still cannot be reimbursed for serving that population. More recently, Missouri expanded the new Medicaid managed-care plan so that people with incomes up to 300 percent of poverty could be covered. But when DMS published the rules for reimbursement for those higher-income adult beneficiaries, psychologists were not included as providers for those people, either.

For psychologists, for the public

When DMS indicated it did not intend to change the rules, MoPA decided to file suit.

The case's outcome, Morris asserts, is important for the public as well as practitioners. He notes, for example, that the lack of Medicaid reimbursement cuts out a major payer source for psychologists who work in public service systems--including community mental health centers--and "don't just take the easy or well-financed patients."

He also says that in many geographic areas there are not enough psychiatrists for Medicaid patients. Further, he indicates, the lack of reimbursement becomes a problem for hospital and health facilities--or even for primary-care practices that want to add a psychologist--because when certain Medicaid patients walk through the door, a psychologist can't be paid for serving them.

The case is particularly crucial at this time for the profession and for beneficiaries, say MoPA officials, because Medicaid is beginning to cover more people, including middle-class beneficiaries. MoPA Executive Director Oestreich points out, for example, that in addition to the increase in beneficiary income levels under the managed-care plan, the new Child Health Insurance Program covers some adults in families.

The Missouri psychologists make an important addendum to the story of the suit's filing. Last fall, the state agency added a piece to what MoPA calls the pattern of discrimination. DMS made it clear that Medicaid would not reimburse provisionally licensed psychologists (those who have their doctorate degree and are getting the required one year of experience), although the state General Assembly had called for that recognition during its 2000 session and although provisionally licensed professional counselors and clinical social workers do get that reimbursement.

"We hit the ceiling," says Morris.

In response, MoPA amended its legal suit to cite that factor, as well.

It should be noted that, on each of the reimbursement constraints, MoPA does have a weapon for arguing discrimination that may not be available to psychologists elsewhere. In 1989 the Missouri General Assembly amended the psychology licensing act to prohibit state agencies from discriminating against psychologists--as compared with physicians--in the services they are licensed to do. That provision is probably unique among state laws, says Cherie Jones, JD, APA's director of legal and regulatory affairs, and the MoPA suit relies heavily on it.


Despite that provision and what MoPA considers the other strengths of the legal case, Morris says that it takes the fortitude that is characteristic of the association to do public battle with an agency holding some major purse strings. He says his fellow MoPA members "have been consistent in their advocacy for patients having access to psychological services. They have gone out on a limb. They have taken on big, big divisions of government. And now they are willing to go to court if they have to."

In recognition of that assertiveness, APA is supporting the legal action with a grant from the association's Psychology Defense Fund.