Medicaid and the Making of a More Accessible Psychoanalysis

Flora E. Lazar

In 2020, as it became increasingly obvious that there was no end in sight for the Covid pandemic, letters from a seldom-seen name, the Center for Medicare and Medicaid Services (CMS), began to appear with some frequency in my inbox. In the urgent ramp-up to broad teletherapy use necessitated by the raging virus, many clinicians experienced a hurried introduction to CMS and its broad influence on mental health policy. The reason we needed to pay attention to CMS's actions quickly grew clearer as clinicians migrated their practices from in-person therapy to telehealth. An agency once all but invisible in psychoanalytic circles suddenly inserted itself into our consciousness not because of an interest in Medicare or Medicaid but because the actions of CMS often presage the direction of private insurers’ policies. At that early point in the pandemic, the question was whether and how long private insurers would reimburse telehealth visits at parity with office visits. Lost in any of this conversation were questions about Medicaid itself.

If, as Elizabeth Corpt persuasively argued in her 2013 paper “Peasant in the Analyst's Chair,” social class is a topic infrequently addressed in the clinical psychoanalytic literature, the question of who is able to access psychoanalytic treatment financially with the assistance of insurance is a topic of even less conversation in psychoanalytic circles.

The silence around Medicaid starts early in one's psychoanalytic career. I noted this during a recruitment presentation I participated in during a psychodynamic class at a local social work school. Students were interested in the usual early-career topics, such as licensure and postgraduate training. But when the topic turned to insurance credentialing—a sometimes helpful way to build a private practice—it was obvious we had traveled into terra incognita. Puzzled looks and polite incredulity marked the conversation about practitioners’ decisions to accept not just private insurance but also Medicaid.

Some incredulity may stem from an unarticulated assumption that treatments of depth and frequency inevitably produce an institutional divide between what happens in a clinic or outpatient facility and in a private office. Psychoanalysis was so private that many practitioners barely participated in private insurance plans much less in such public programs as Medicaid. (Indeed, a 2020 report by the actuarial consulting firm Milliman indicated that patients were forced to go out of network more than 4.2 times as often for mental health services than for medical services.) Was publicly funded psychoanalytic treatment thus a contradiction in terms?

Avoidance of Medicaid has often struck me as a cover for feelings about the broader issue of insurance among the clinical specialties comprising APsaA. “It's complicated,” a psychiatrist once said, dismissing the topic during a pre-pandemic task force meeting on APsaA's advocacy priorities. No doubt. However, psychiatrists, who account for well over half of APsaA's membership, have historically absented themselves disproportionately, it seems, from Medicaid and commercial insurance panels. The usual claim is what Norman Clemens and colleagues in a 2014 journal article called “scandalously low Medicaid payment scales.” Claiming psychiatrists cannot “afford to participate in third-party payment mechanisms,” the authors gloss over who can afford Medicaid reimbursement rates and who is responsible for the mental health of the indigent.

The assumption, it seems, in a self-serving mischaracterization of the migration of social work graduates from agencies to consulting rooms, is that tending to low-income patients is social workers’ work. Clinical social work was arguably the first clinical specialty to embrace psychoanalytic ideas on a large scale. However, social work's embrace of psychoanalysis in the context of care for children and young adults in state-sponsored institutions, such as Chicago's Juvenile Psychopathic Institute and child-guidance clinics, left it outside the growth of consulting room psychiatry as it professionalized from its roots in asylum care.

Certainly, the comparatively late arrival of social workers into APsaA and psychoanalytic institute leadership has helped foster the erroneous view that social workers are predominantly concerned with improving the welfare of marginalized groups. If the University of Chicago's Crown Family School of Social Work, Policy, and Practice—one of the earliest social work schools created with the goal of advancing social justice—is any indication, the overwhelming majority of students pursue clinical work rather than careers more historically aligned with social work's social justice roots. Indeed, this evolution from social work's roots in fighting broad systemic oppression is so pronounced within the profession that scholars of the field's history have referred to these clinicians as “apostates” and “fallen angels.” In the historical literature on social work, the embrace of psychoanalysis is often blamed for the field's chronic identity struggles.

Even though the social work code of ethics explicitly calls upon members of the profession to challenge social injustice, social workers have been no less silent than other clinicians on the broad issue of Medicaid. Social workers in community mental health centers, where psychoanalysis has traditionally had less prominence in the United States, were no different from the clinical social workers in private practice, as found by Sara Bachman and colleagues in their 2017 study of social workers’ roles in Medicaid reform.

Insurance aside, psychoanalysis has, over time, had a problematic and arguably misunderstood history on the question of care for the socioeconomically disadvantaged. As Elizabeth Danto's masterful account Freud's Free Clinics (2005) illustrates, treating the economically marginalized was a central preoccupation of the Berlin Institute. Freud, she shows, conveyed clearly his expectation that the field would concern itself with equal access to treatment for “the great multitude who are too poor themselves to repay an analyst for his laborious work.” Not infrequently—and perhaps unthinkably in today's analytic world— early analysts undertook their training analysis free of charge. In return, they were expected to see their control cases free of charge. This idea did not prevail by the time the center of gravity in psychoanalysis shifted, after World War II, to the United States, and the field's educational model and theoretical literature grew. As late as the 1970s, skepticism about the efficacy of psychoanalysis for the indigent went largely unchallenged. Departures from classical therapeutic techniques were considered necessary for working with individuals of low socioeconomic status, as Neil Altman argued in his now classic work on psychoanalysis and the urban poor.

In fact, on many fronts, Freudian theory proved poorly adapted to psychoanalysis with the indigent. The concept of analyst as blank slate proved incongruent with the multifaceted role analysts often played in the clinical settings in which many poor patients were seen. The poor were often thought to lack capacity for self-observation, to communicate what was observed, and to make use of the therapeutic alliance. What emerged was a two-tiered system where, to the degree they were addressed at all, the needs of the poor were met psychoanalytically outside of the organizational mainstream of the field's system of care where others were treated. This system assumed they would be treated in specific settings, not in private consulting rooms but in clinics like Chicago's Kedzie Center, and in specific ways that differed from those therapies applied to patients of other economic strata. It is consistent with the broader history of medicine where the needs of the poor were met in public settings such as “charity hospitals,” rather than in private offices.

The class bifurcation of psychoanalysis in consulting room and clinic did not begin to collapse until the reality of the “behavioral challenge” sank in and the efficacy and economic benefits of long-term, intensive treatments came under question by insurance companies. Only then did insurance, broadly speaking, become a reluctant factor in psychoanalytic treatment. Yet, a deafening silence on Medicaid prevails. The absence of conversation about Medicaid persists even as the field begins to confront its legacy of racial exclusion in clinical work and in the field's educational institutions. The surge in demand for mental health services during the Covid pandemic has done little to alter this trend.

The absence of conversation about Medicaid persists even as the field begins to confront its legacy of racial exclusion in clinical work and in the field's educational institutions.

Like the psychiatrists studied by Norman Clemens and the social workers in Bachman's qualitative study, social workers felt that Medicaid was a topic on which psychoanalysis could remain largely silent because, as Bachman's subjects indicated, it “affected” them less. But surely silence affects the psychoanalytic community. Research recently released by the Psychotherapy Action Network (PsiAn) suggests the relative neglect of insurance issues by the field may be short-sighted. In the group's multi-modal study, including in-depth interviews and a nationwide survey of 1,500 people, PsiAn found insurance coverage is the single most important factor in choosing which therapist to work with. If this shortage of in-network mental health services affects those with private health insurance, it affects those with Medicaid plans disproportionately.

Fortunately, the discussion of insurance coverage for intensive treatments was thrust into the open by several major legal and policy decisions that attempt to give teeth to the Mental Health Parity Act, passed in 2008 and amended in 2010. Routinely flouted by insurance companies processing claims for intensive treatments, this federal legislation aimed to ensure that mental health and addiction services were covered comparably to medical care by removing frequent limitations on the scope and duration of mental health care. After a 2019 California victory in which a judge declared it illegal for insurance companies to deny benefits for intensive treatments such as psychoanalysis, psychoanalytic advocates shifted their attention to state capitals, which regulate insurance coverage and Medicaid plans. Their goal is to prevent the denial of insurance coverage for intensive mental health services such as psychoanalysis.

It remains to be seen whether these changes will benefit those patients who rely on public sources of insurance like Medicaid as much as those with private insurance. Likewise, it remains unclear whether the ability of the economically marginalized to access psychoanalytically oriented care will become any less challenging. Will Medicaid move more broadly into private offices, where the overwhelming majority of psychoanalysts and psychoanalytic therapists practice?

Psychoanalytic group practices, of which there are still very few, may be more likely and better equipped than solo practitioners to empanel their clinicians in Medicaid and handle insurance submissions. While some solo practitioners undertake the empaneling process for private insurance—which, for example, in Illinois generally takes about two months—Medicaid can take longer, as much as six months. However, in states like Illinois the reimbursement rates are far from “scandalously low.” In fact, for social workers, rates lagged private insurance by only about $20 per session, or at least 30 percent more than the recommended—or even allowable—sliding scale fees in many group practices. Many times more than the fees charged by clinics.

Enabling more diverse populations to access psychoanalytically informed treatment will address a sustained criticism of psychoanalysis, namely its exclusion of patients with historically marginalized identities.

Groups that empanel their clinicians find other advantages as well. One clinician confessed relief that he would not have to rely on referrals to student interns for low-income patients. The director of another group practice saw it as a useful recruiting tool, explaining that some early-career professionals want to be able to transfer patients they see in community settings to their private practices. They view Medicaid as essential to this continuity of care and an opportunity to build their licensure caseloads. Some social workers exhaled at the prospect of achieving an easier balance between their own personal needs to optimize billings and the profession's historical roots in addressing poverty.

It remains to be seen whether greater awareness of Medicaid's reimbursement schedule will address the declining interest in psychotherapy among early-career psychiatrists on its own or whether payment scales will have to be addressed. As Norman Clemens acknowledges, the shortage of Medicaid psychiatrists—and especially those with psychoanalytic training—affects the most severely afflicted and underserved patients who typically are not seen in private practice settings. Some psychoanalytic training programs recognize the need to enrich their educational offerings by developing options to engage clinicians more directly in the outside community. Important as these initiatives are in expanding the types of patients psychoanalysts can knowledgeably serve, they run the risk of all targeted programs: they are financially and institutionally vulnerable and continue to marginalize those outside the reach of more universal benefits. Making Medicaid more universally available for psychoanalysis or psychoanalytic psychotherapy in private practice settings presents a learning opportunity likely to enrich the education of a broader range of psychoanalytic clinicians than those attached to clinics and hospitals or those who pursue community psychoanalysis tracks in their training.

For the field as a whole, narrowing the gap between the clinic and the consulting room through the expansion of Medicaid utilization in private psychoanalytic practice will have other possible benefits beyond impact on training. Enabling more diverse populations to access psychoanalytically informed treatment will address a sustained criticism of psychoanalysis, namely its exclusion of patients with historically marginalized identities. As numerous recent commentators on race and psychoanalysis observe, this lack of diversity in the historic psychoanalytic patient population has produced a body of clinical theory with serious and often painful biases that threaten to make psychoanalysis an irrelevancy in a modern, diverse world.

The inescapable fact remains that Medicaid is the leading payer for mental health services in the United States, especially for low-income individuals. The program paid for 25 percent of all mental health spending and 21 percent of total spending on substance use disorders in the United States in 2014, according to a 2018 report on mental health parity written by Elizabeth Edwards and Abbi Coursolle.

As with all basic social change, improved access to psychoanalytic services through Medicaid will likely require new systems and supports. Physicians in other medical specialties routinely expect to need administrative and insurance processing support. The need may become more pressing for solo practitioners if legal and regulatory changes that have taken place in recent court decisions and state policy succeed in expanding the number of solo practitioners accepting private insurance. Group practices routinely provide such benefits as billing support to their clinicians for Medicaid as well as private insurance.

As psychoanalysis continues its internal process of reconciliation with deeply problematic aspects of its theory, practice, and educational institutions that have impacted marginalized groups, the profession cannot and should not stop with issues of race, gender, or education, each of which has been the focus of specific apologies by the American Psychoanalytic Association. Reanimating the impulse that inspired Freud's free clinics will require an equally thorough and ongoing re-assessment of the class system that has undergirded who practices psychoanalytically informed therapies of depth and who is allowed to benefit. It is an irony that in continuing to marginalize the poor and those who rely on public systems of support to access mental health services, psychoanalysis has marginalized itself. APSAA


Flora Lazar, Ph.D., LCSW, is an historian and psychoanalytic psychotherapist who has worked at the intersection of research, public policy, and clinical practice. She has served on several APsaA task forces related to psychoanalytic advocacy. She works in the Berkshires.