Almost 70 million Americans were on Medicaid as of December last year, an increase due to the Medicaid expansion that was part of the Affordable Care Act, Stacey Larson, JD, PsyD, told participants at the State Leadership Conference in March. And that number may increase even more, said Larson, director of legal and regulatory affairs for APA's Practice Directorate.
In addition to the 29 states that have already expanded their Medicaid programs, six more are contemplating expansion.
But while demand for psychologists and other mental health professionals is increasing, said Larson, several barriers stand in the way of psychologists fully participating in Medicaid. Larson's review of the traditional Medicaid programs — rather than Medicaid managed care — in all 50 states identified several problem areas:
- Limits to participation. Nine states don't allow private practitioners to participate in Medicaid, offering reimbursement only to those employed by community mental health centers or similar facilities. In Massachusetts, psychologists in private practice can do psychological testing but can only provide therapy services through licensed mental health clinics. In Rhode Island, psychologists in private practice can see kids but not adults.
- Reimbursement for health and behavior codes. These six codes were designed to give psychologists a way to bill for helping patients with medical problems, but only 13 states allow psychologists to bill Medicaid for the codes.
- Reimbursement for predoctoral interns. Interns' services generally aren't eligible for reimbursement under Medicaid. However, 12 states do allow it. In these states, state psychological associations, psychologists and licensing boards have worked with state Medicaid agencies to set up appropriate systems to ensure that interns are supervised by licensed psychologists and provide for reimbursement for their services.
Psychologists are working to overturn these and other barriers.
One major effort has been the creation of an APA web page. A collaboration among the Practice Directorate, Education Directorate and American Psychological Association of Graduate Students, the page offers tips and resources for psychology training programs and interns advocating for Medicaid and private insurance reimbursement for services provided by trainees.
"Two-thirds of all internships can't bill third-party payers for trainees' services," said Sharon Berry, PhD, director of training at Children's Hospitals and Clinics of Minnesota.
That contributes to the shortage of internships, said Berry. It's also a big reason why 30 percent of internship programs lack accreditation. When Berry surveyed internship training directors, she found that funding problems lay behind lack of accreditation.
In addition to the web page, APA is launching a new fellowship through its Education Directorate. The fellow will work with state, provincial and territorial psychological associations on strategies for allowing reimbursement and sustaining internship programs.
Other advocacy efforts focus on the health and behavior codes. In Oklahoma, for instance, psychologists waged a five-year fight that resulted in the codes being "turned on" in 2010.
But problems remain, said Stephen Gillaspy, PhD, associate professor of pediatrics at the University of Oklahoma Health Science Center. Oklahoma psychologists can only use the codes to bill Medicaid for services provided to kids, for example. And while private insurers' reimbursement rates for the codes have gone up and Medicare rates have stayed stable, Medicaid reimbursement has declined. To help other psychologists learn about the codes and their use in Medicaid, Gillaspy and other psychologists are developing a database with links to information on health and behavior codes in Medicaid programs that use the codes, plus information on minimum, maximum and average reimbursement.
In Missouri, psychologists are fighting a battle against a new state Medicaid rule that requires psychologists to undergo special training to use the health and behavior codes in health homes and to get recertified every two years, all at their own cost.
Several strategies help in these kinds of battles, said Chuck Hollister, PhD, executive director of the Missouri Psychological Association. Cultivate relationships with legislators to create champions. Enlist the help of APA, which discovered that Missouri was the only state with this kind of educational requirement. And remember that your scope of practice gives you the right to treat the psychological aspects of physical illness.
"We're not going to have our scope of practice compromised," said Hollister.
Rebecca A. Clay is a journalist in Washington, D.C.

