Missouri will allow Medicaid reimbursement for adult psychological services, a concession made after a long legal battle initiated by the Missouri Psychological Association (MOPA).

The Missouri Division of Medical Services (DMS) announced in June, through its Psychotherapy Bulletin, that psychological services for adults are to be covered by Medicaid when furnished by independently enrolled psychologists--that is, those who are strictly providing services out of integrated health services facilities, such as nursing homes. Previously, DMS only covered adult therapy services provided by psychiatrists.

The rule change comes a year after MOPA received a favorable decision on summary judgment in a case filed by psychologists in the Missouri state court and supported by the APA Psychology Defense Fund, which is separate from the APA operating budget and is supported solely by tax-deductible contributions. Plaintiffs in the case had claimed that DMS favored psychiatrists and discriminated against psychologists by blocking their full participation in the state's adult Medicaid program.

As many state Medicaid programs have been moving to reduce the services and people they cover to control spending, the suit and the rule change have been of interest nationally because they highlight provider discrimination as an illegal cutback, says Bridget Martin, PsyD, MOPA's president and a staff psychologist in student counseling at the School of Medicine at Washington University in St. Louis.

"The summary judgment in our favor sets a legal precedent for the fair and equitable inclusion of psychologists in a major health-care delivery system, for the importance of providing psychological services and more comprehensive mental health benefits to all Missouri Medicaid recipients and for the provision of reimbursement for services psychologists are licensed to provide in other current and future state-administered health-care plans," Martin says.

Missouri's challenge yields an important win

The Center for Medicaid and Medicare Services--the Department of Health and Human Services body that administers the federal Medicaid program--and Missouri statutes require DMS to create rules that define what the qualifications are to provide mental health services under Medicaid. But instead, and in violation of Missouri law, DMS issued informal bulletins proclaiming which mental health providers could provide certain services within the state's Medicaid program.

"The formal process for developing 'rules' ensures that there's a mechanism for public comment and sufficient notice for interested parties," says Rochelle Jennings, the APA Practice Directorate's legal research coordinator. "So when the state published the informal bulletins, they prevented psychology from having a voice in the administrative process."

DMS has historically reimbursed psychologists for services provided to children under Medicaid, but not adults. But if a child received services from a psychologist under Medicaid, the child was cut off from those services when he or she turned 21. This practice discriminated against psychologists because psychiatrists were allowed to treat the same patients from childhood through adulthood, says Martin.

"MOPA's central argument in this case was upholding the Missouri state statute outlined in the nondiscrimination clause of our practice act," Martin says. "This clause prohibits the state or its agents from denying payment to psychologists for services we are licensed to provide for which they pay physicians."

Current status

The new rule has taken effect and psychologists are beginning to be reimbursed for services such as diagnostic evaluation, psychological testing and psychotherapy--services that, prior to the summary judgment, were primarily provided by and reimbursable only for psychiatrists, Martin says.

This favorable development for psychologists in Missouri took place despite a growing trend for states to reduce Medicaid services, noted Jennings. The Kaiser Commission on Medicaid and the Uninsured recently reported that all 50 states and the District of Columbia have planned or taken steps to contain Medicaid costs for fiscal year 2004. While Medicaid enrollment is growing, Jennings added, the Kaiser commission reported that program-spending growth slowed for the first time in seven years.

Even in Missouri, psychologists will continue to be vigilant, said Martin. "We will need to continue to monitor reimbursement rates for the provision of such services to ensure that psychologists continue to be reimbursed at rates equivalent to those of psychiatrists," she said.