The Impact of Medicare Mental Health Cost-Sharing Parity on Outpatient Care for Beneficiaries with Serious Mental Illness

Background: Medicare has historically limited reimbursement for mental health (MH) services, resulting in higher beneficiary out-of-pocket payments for MH care versus other medical care. The Medicare Improvements for Patients and Providers Act of 2008 introduced coinsurance parity for outpatient MH services in Medicare for the first time since the program's inception, which gradually reduced beneficiaries’ coinsurance from 50% in 2009 and earlier, to the standard 20% coinsurance starting in 2014. Medicare is a major source of coverage for people with disabling mental illness, however, there is limited information on the impact of this policy change on use of MH services.

Objectives: We examined the impact of parity implementation on outpatient MH visits overall and by provider type among Medicare beneficiaries with serious mental illness (SMI).

Methods: We used fee-for-service claims data for a national sample of Medicare beneficiaries and identified beneficiaries that had diagnoses of schizophrenia, bipolar disorder, or major depressive disorder prior to 2008. We used a difference-in-difference design to examine changes in outpatient MH visit rates from 2008-2015 for those with cost-sharing reductions (beneficiaries with partial subsidies, income 101-135% of poverty) vs. no change in cost-sharing (beneficiaries with full cost-sharing subsidies, income<100% of poverty). We used linear regression models with beneficiary fixed effects, adjusted for annually updated comorbidity scores and quarterly time trends at the Hospital Referral Region level, to compare changes in monthly MH visit rates for partial vs. full subsidy beneficiaries in each year (2009-2015) vs. 2008. We examined changes in MH visit rates overall and by provider type, including psychiatrists, primary care providers (PCPs), non-physician providers (e.g., social workers, psychologists, nurse practitioners), and outpatient facilities (e.g., community health centers, hospital outpatient departments).

Findings: Among 3.24 million beneficiaries in our sample in 2008, 40% had an SMI diagnosis at baseline. In 2008, partial subsidy beneficiaries with SMI had an average of about 1.6 MH visits per year: 43% of visits to psychiatrists, 29% to non-physician providers, 16% to facilities, and 9% to PCPs. Overall MH visit rates did not change significantly during the parity implementation period (2010-2014) vs. 2008; however, visit rates increased significantly by 2.2% in 2015 vs. 2008 for partial vs. full subsidy beneficiaries. Relative changes in visit rates differed over time by provider type; for example, in the post- vs. pre-parity period (2015 vs. 2008) MH visit rates increased by 3.3% to psychiatrists, 16.0% to PCPs, 3.7% to facilities, and decreased by 3.9% to non-physician providers (all p-values<.05).

Conclusions: Coinsurance reductions for MH services in the Medicare program were associated with increases in MH visits rates overall in the first post-parity year for low-income beneficiaries with SMI. Although the cost-sharing reduction applied similarly across provider types, the effects of the policy varied with the largest increases in MH visits to PCPs and relative decreases in visits to non-physician providers. Additional work is needed to assess the effects of these changes in care patterns on quality of care and spending.