Mental Health Issues

Overview | NY State | Federal Legislation | Perspectives | Resources | Scope of Practice

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"Managed Care" policies, it has been argued, often fail to ensure patients' rights to appropriate treatment, with a provider of their choice, for a duration sufficient to fully address the presenting problem.

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New York State

Recap: A Brief History


In the mid 1990's a broad coalition of physicians, psychologists, HMO's, business and consumer groups, worked diligently to promote the passage, in New York, of the "Health Care Bill of Rights". Intense debate raged on through June 1996, with lobbyists and constituents descending upon Albany, until eventually the Budget bill was finally agreed upon, an historic 100 days late. Some of the provisions which were sought were in fact enacted.

The law now provides Consumer protections such as disclosure requirements, grievance procedures for patients, and an end to the "gag rule" which punished health care providers for being honest with their patients about the quality of care within an HMO. However, legislators failed to enact safeguards which would ensure "point-of-service" options for patients seeking treatment with a doctor of their choice, outside a Managed Care network.

Throughout 1997-1998, despite a booming economy and record corporate earnings, standard fees to health providers plummeted, causing many to leave Managed Care panels, and denying consumers choice of qualified providers. Where psychotherapy is still available under Managed Care, it has become severely restricted in terms of allowing the doctor rather than the telephone clerk to determine what is in the patient's best interest, both short-term and for the long-term.

1998 In Review

New York State became eligible for $256 Million in additional money for the Child Health Plus program which, in theory, allows for up to 60 outpatient visits per year, but in practice only allows 20 for treatment. There are efforts underway to make these benefits "convertable", and this is seen as an excellent area in which individuals and organizations might be pro-active.

Who is eligible for Child Health Plus? Dr. Frank Goldberg explains: "Any child NOT eligible for Medicaid, not insured, and with a family income up to 222% of the poverty level". Bringing the floor up to 300% would, if this could be attained, provide "near universal" mental health coverage for children.

Managed Care providers (e.g., Oxford) have been issuing proclamations recently of how certain "mental illnesses" such as PDD, ADD, OCD, and schizophrenia are completely "medical" in origin and thus amenable only to the "treatment of choice": medication. Naturally, this will be fought by organizations and advocates. Advocates of the Mentally Ill (AMI), in particular, have been very supportive of providing choice with regard to non-medical therapeutic modalities. However, the Medical Society of New York has been openly and persistently opposed.

1999 Highlight: Mental Health Licensing Bill Re-Introduced!

The NYS Legislature re-introduced a Mental Health Licensing Bill (S. 2990 A. 5410) in late February, 1999. It was felt to be imperative that legislators pass this law as presented, so that consumers and psychologisists could be assured that psychology and psychologists are a specific and distinct discipline, one finally clearly defined and qualified under law by a scope of practice. As the law was written, only a licensed psychologist can use the title, or engage in psychological diagnosis and treatment, but beyond that the scope of practice has never been defined.

The proposed law would have allowed the growth of several bachelor's and masters-level professions, with both appropriate scope and limitations to protect the consumer. It was also very clear in its definitions of both psychological and medical treatment, so that unless one profession feels the need to defend against the other, there should have been no ensuing "turf" wars in the immediate future...which would have been good for everyone-- professionals, consumers, and MCO's too. However, the Medical Society of NY waged a massive financial and political crusade to defeat the entire bill. The bill was next re-introduced in the Year 2000 legislative session.

Year 2000

In a year which saw more election politics than legislation, NY State legislators did not go forward in pursuing an omnibus bill which would have defined a scope of practice for psychology. Moreover, the state psychological association NYSPA and it's new affiliate, NYSUT (teachers' union), gave mixed messages to members as to whether its lobbyists would be supporting the omnibus bill or the "stand-alone" scope of practice bill. Neither passed.

2001: A Healthcare Odyssey

This was a very strange year in terms of how the omnibus bill, defining a number of professions, rose and fell and rose again. As the legislative session ended, absolutely nothing had changed in terms of either healthcare delivery or patients' rights, in New York State. However, what has changed is the political climate, nationwide. Health Care was now on the front burner of the national agenda! Still, the psychological health of our children in schools was ignored, as the system of mental health delivery in large urban schools remained far worse than even Managed Care, in the opinion of many who experience it daily.

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Federal Legislation

On June 29th, 2001, the United States Senate passed a Patients Bill of Rights. President George W. Bush, however, has promised to veto the legislation.


On a Federal level, the Domenici-Wellstone Amendment, providing for "mental health parity", was attached to the larger health bill known as The Kennedy-Kassebaum Health Care Reform Bill (S. 1028), and overwhelmingly passed by the Senate in April 1996. Of particular importance, the bill would remove both lifetime and annual caps specific to mental health coverage. The amendment's authors remained adamant about retaining these provisions, thus giving mental health the same status as physical health ("parity"), clearly a very desirable outcome. However, the previously-passed House version did not contain the "parity" provision.

There remained strong support for parity of mental health insurance coverage, as well as increasing discussion in such public media forums as 60 Minutes. Eventually, the compromise bill which emerged was the Domenici-Wellstone mental illness parity amendment, adopted overwhelmingly by the Senate and House as part of the FY '97 VA-HUD appropriations bill H.R. 3666.

The Mental Health Parity Act of 1996 (P.L.104-204) was signed into law by President Clinton on September 26, 1997. Passed with broad bipartisan support, the legislation was hailed by the National Alliance for the Mentally Ill as the beginning of movement toward " the process of ending the long-held practice of providing less insurance coverage for mental illnesses, or brain disorders, than is provided for equally serious physical disorders".


The Mental Health Parity Act of 1996 took effect on January 1, 1998.

Key Provisions Of The Law

What’s Not Covered

In accordance with this new Federal Law, many individual States have been enacting Legislation of their own since 1997 to protect consumers beyond the provisions of the the parity amendment. In New York State, several coalitions representing consumers and health care providers has been formed to "fight to end health insurance discrimination against persons living with mental illness and chemical dependency."

Click Here to See NYSPA's Statement of Support for the MEND Coalition

Into the 21st Century...

The task still remains to remind employers, employees, legislators and mental health professionals alike, that mentally healthy workers are more "productive" workers,with better morale, lowered sick days, etc. Consumers already know that the fabric of society is shaped by the mental health of our friends, family, neighbors and political leadership. The fight for true mental health "parity" continues. A list of national organizations and resources is provided below.

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The Patient/Provider Perspective

Psychology's Future under Managed Care?
A provocative interview with Nicholas Cummings, pioneer advocate of industrialized managed behavioral healthcare, and former President of APA. Was he right?

Mental Health Bill of Rights
600,000 Mental Health Professionals issue this proclamation of basic healthcare rights. (3-97)

Risk Management for Practitioners
An Interview with Bryant Welch, J.D., Ph.D. (11-2000)
Overview of legal and quality-of-care issues, ranging from liability insurance to nuances of online practice.Part of an excellent Professional Interview Series directed towards health professionals. (

Suing Managed Care
Bryant Welch, J.D., Ph.D. (3-97)
A short list of compelling arguments when seeking redress from MCO's.

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The Corporate Perspective

Large corporations are beginning to review the evidence of how managed care typically benefits the insurers more than either the companies or the employees. (In fact, as one company learned, the costs associated with managed care administration and fees often surpass the cost of uncapping mental health services, and letting morale and productivity improve as a result.) The story of one very successful corporate move away from managed care, follows, courtesy of Frank Goldberg, Ph.D., Alliance for Universal Access to Psychotherapy:

Motorola Rejects Managed Care

Because a behavioral managed care organization did not produce much savings in outpatient mental health costs (due to clerical, executive staff and overhead costs, and the expenditures necessary to sustain micro management controls) the Motorola Corporation, a large nationwide electronics firm based in Texas, decided to implement their own self-insured plan. In effect, since January, 1996, Motorola provides unlimited outpatient psychotherapy benefits to its employees with no yearly or lifetime cap. There is a panel of providers, but an employee can recommend a non-panel provider of their choice, who, if meeting the necessary professional credentials and submitting two sample treatment cases, will usually be accepted as a provider. There is no pre-certification. Fees vary depending on location.

There is a quality check case review after 20 sessions, with no impact on the continuation of treatment. Mr.Tom Schmitt, Regional Manager for Employee Benefits, explained that the program was initiated "to get away from the watchdog, paranoid attitude of managed care companies micro managing benefits, to a more collaborative relationship among the employer, the employee and the provider." The company realizes that most patients stay in treatment for a relatively short period of time (e.g., 5 to 8 sessions, or 12 to 20 sessions). Motorola does not want to erect barriers to treatment and is promulgating this model (with planned follow-up and outcome survey) to improve the mental health of their employees, which they believe has intangible positive morale consequences and translates to increased productivity.

Above article by Dr. Frank Goldberg, 1997-98 President of NYSPA

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The Medical Perspective

As the following announcement by the American Psychiatric Association suggests, dissatisfaction with the quality of care under "Managed Care" extends across the allied Mental Health Professions.

APA Announces Legal Actions To Protect Patients

The American Psychiatric Association is going to court to protect the right of patients to receive optimal care for their mental illnesses, APA President Harold I. Eist, M.D., announced today. In a three-pronged attack, the APA is:

  • Challenging managed care profiteering by joining as a plaintiff in an antitrust lawsuit filed in New York State on behalf of all psychiatrists, psychologists, and social workers in the U.S. against nine of the nation's largest mental health carve-out organizations. (U.S. District Court for the Southern District of New York, Docket #96 CIV 7798)

  • Seeking to protect patients from discrimination under the Americans With Disabilities Act by joining with the New York State Psychiatric Association in providing financial support in a suit against an employer that provided fewer benefits for people disabled by mental disabilities than with other disabilities. (Leonard F. v. Israel Discount Bank)

  • Opposing arbitrary and capricious denials of medically necessary care through financial support of class action lawsuits against Blue Cross Companies which use Green Spring Health Services to review the medical necessity of psychiatric and substance abuse treatment decisions.

The actions were approved by the APA Trustees Friday March 14, 1997. They are part of the Association's proactive litigation strategy and are supported through a special fund created in 1995. "Our members have demanded that we take strong legal action to forcefully defend against any organization which denies patients access to high quality and medically necessary psychiatric care," said Dr. Eist. "Today, in accord with our time-honored responsibility as patient advocates, we are launching the first in a series of actions against abuses of our patients' right to essential quality care," he added.

(From American Psychiatric Association.)

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Another Presidential Perspective

From President Bill Clinton's State of the Union Address, January 27, 1998:

"One hundred and sixty million Americans are in managed-care plans. These plans can save money and can improve care. But medical decisions should be made by medical doctors, not insurance company accountants. So I urge the Congress to write into law a Consumer Bill of Rights that says this: You have the right to know all your medical options, not just the cheapest. You have the right to choose the doctor you want for the care you need. You have the right to emergency room care, wherever and whenever you need it. You have the right to keep your medical records confidential. Traditional care or managed care, every American deserves quality care."


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Resources - For Those Concerned About "Managed" Care

Congressional Testimony on the "Malpractice" of Managed Care

Testimony of Congressman Ganske regarding Health Care Reform, from the Congressional Record, March 28, 2000. Poignant testimony from this former surgeon turned legislator.

Health Administration Responsibility Project (HARP)

The Home Page of a large and activist group of doctors, lawyers and consumers, opposed to Managed Care. Many resources, articles, list-servs, and more.


New York State Bill to enact Single Payer Health Insurance:
(March 2001) Assembly Bill A04700: Summary | Full Text

Physicians for a National Health Plan (PNHP)

Includes a Q&A about Single Payer National Health Insurance, information on alternatives to "Managed Care" and discussion of Why the U.S. Needs a Single Payer System.

Psychologists' Guide to Advocacy

From the American Psychological Association, features updates on important issues relating to national mental health policy.

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Last Updated: Monday, 29-Jul-2019 22:54:54 EDT

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