Adjustment disorder,

The Influence of Payment Method

on Psychologists’ Diagnostic Decisions

Regarding Minimally Impaired Clients

Andrew M. Pomerantz and Dan J. Segrist

Department of Psychology

Southern Illinois University Edwardsville

Are psychotherapy clients who pay via health insurance more likely to receive Diagnostic

and Statistical Manual of Mental Disorders (4th ed. [DSM–IV], American

Psychiatric Association, 1994) diagnoses than identical clients who pay out of

pocket? Previous research (Kielbasa, Pomerantz, Krohn, & Sullivan, 2004) indicates

that when psychologists consider a mildly depressed or anxious client, payment

method significantly influences diagnostic decisions. This study extends the scope of

the previous study to include clients whose symptoms are even less severe. Independent

practitioners responded to vignettes of clients whose profiles deliberately included

subclinical impairment and a high level of functioning. Half of the participants

were told that the clients would pay via managed care; the other half were told

that the clients would pay out of pocket. As in the earlier study, payment method had

a highly significant impact on diagnosis such that relative to out-of-pocket clients,

managed care clients were much more likely to be assigned DSM–IV diagnoses. In

addition, a noteworthy percentage of participants assigned diagnoses regardless of

payment method. Ethical implications are discussed.

Keywords: diagnosis, managed care, independent psychotherapy practice, ethics,

payment

A recent study (Kielbasa, Pomerantz, Krohn, & Sullivan, 2004) found that the

method by which a private practice client pays for psychotherapy very significantly

influences both the likelihood that the psychologist will assign a diagnosis

and the specific diagnosis that the psychologist chooses. Specifically, when comETHICS

& BEHAVIOR, 16(3), 253–263

Copyright © 2006, Lawrence Erlbaum Associates, Inc.

Correspondence should be addressed to Andrew M. Pomerantz, Southern Illinois University

Edwardsville, Department of Psychology, Edwardsville IL 62026. E-mail: apomera@siue.edu

pared to identical clients paying out of pocket, clients paying via managed care

were much more likely to receive diagnoses and were more likely to receive adjustment

disorder diagnoses in particular. In the Kielbasa et al. (2004) study, the fictional

vignettes to which participants responded included mildly depressed and

anxious clients whose symptoms placed them very near the threshold for Axis 1

disorders in the Diagnostic and Statistical Manual of Mental Disorders (4th ed.

[DSM–IV], American Psychiatric Association [APA], 1994). The purpose of this

study was to replicate the Kielbasa et al. (2004) study using vignettes of clients

whose level of pathology was even less severe. In other words, when considering a

generally high functioning client whose symptoms may fall below the threshold

for any DSM–IV disorder, will psychologists be influenced by payment method

when making diagnostic decisions?

This study, as well as its predecessor (Kielbasa et al., 2004), stems from a growing

body of literature examining the effects of managed care and other forms of

third-party payment on the independent practice of psychology. This literature includes

numerous empirical surveys of practitioners regarding the impact of managed

care on their practices (e.g., Bell, 1999; Murphy, DeBernardo, & Shoemaker,

1998; Phelps, Eisman, & Kohout, 1998; Rothbaum, Bernstein, Haller, Phelps, &

Kohout, 1998), most of which have concluded that the impact has been quite negative.

In addition, the literature includes nonempirical commentaries on the impact

of managed care on psychotherapy (e.g., Karon, 1995; Miller, 1996), most of

which describe managed care as having a detrimental effect. However, diagnosis

has not been the primary focus of these surveys and commentaries. Instead, they

have focused primarily on the therapy process, and to a much more limited extent,

assessment techniques. Very few studies in this field have yielded conclusions regarding

diagnostic issues; these studies have found that independent practitioners

strongly believe that managed care influences psychologists to alter diagnoses to

ensure reimbursement and to protect confidentiality (Murphy et al., 1998) and that

accurate diagnosis in a managed care system is problematic for many mental

health counselors (Danziger & Welfel, 2001). Thus, with the exception of these

isolated studies and the Kielbasa et al. (2004) article, the impact of payment

method on specific diagnostic decisions made by clinicians has not been the focus

of empirical research, particularly for clients who present with mild or subthreshold

symptoms.

Kielbasa et al. (2004) considered numerous interpretations for the finding that

managed care clients are far more likely to receive diagnoses than out-of-pocket

clients, including the common requirement of a diagnosis by managed care companies

to justify reimbursement as described by Ackley (1997), Chambliss (2000),

and Kutchins and Kirk (1997), among others. Peck and Scheffler (2002) similarly

discuss “intentional upcoding,” by which clinicians exaggerate symptoms to increase

the chances or amount of reimbursement from third-party payers (p. 1094).

To the extent that the client falls below the criteria for a mental disorder, the clini-

254 POMERANTZ AND SEGRIST

cian engaging in such practices may be acting in a manner that violates the ethical

code of the APA (2002) or laws concerning insurance fraud. In light of this, this

study specifically sought to examine the impact of payment method on diagnostic

decisions regarding clients whose symptoms may fall below the threshold of a

DSM–IV disorder.

METHOD

Participants

Members of Division 42 (Psychologists in Independent Practice) of the APA were

randomly selected and surveyed via mail. Of the 1,000 members who were initially

surveyed, 91 surveys were returned as undeliverable. Of the remaining 909 surveys

that were presumably delivered, 275 respondents provided usable data, representing

a 30.25% return rate. Mean age of participants was 59.4 years (SD = 9.63) and

mean number of years in private practice was 23.8 (SD = 10.11). Respondents

were primarily male (63%) and White (78%). Most had earned PhD degrees (86%)

as opposed to EdD (6%) or PsyD (7%) degrees, and most specialized in clinical

psychology (74%) as opposed to counseling psychology (20%) or other areas

(4%). Eclectic orientation was most frequently endorsed (57%), followed by cognitive

(18%) and psychodynamic (16%). Most (62%) worked primarily in solo independent

practices, whereas some (22%) worked primarily in group independent

practices.

Materials, Design, and Procedure

Each participant received a survey that included two vignettes, one describing a client

with minimal depressive symptoms and another describing a client with minimal

anxious symptoms. The order of the two vignettes was counterbalanced such that

eachappearedfirstonapproximatelyhalfofthesurveys.Forparticipantsinthemanaged

care condition, both fictional clients were described as paying via managed

care. For participants in the out-of-pocket condition, both fictional clients were described

as paying out of pocket. The Appendix provides an illustration of these vignettes.

Participants also received a cover letter and a brief demographic survey.

Each vignette was intended to portray a client whose presenting problems fell

below the threshold for a DSM-IV diagnosis. They were similar to the vignettes

used in the Kielbasa et al. (2004) study in terms of the type of symptoms described,

but the severity and duration of the symptoms were deliberately subclinical, and

the level of functioning was deliberately high. Specifically, the minimally anxious

client is described as demonstrating some symptoms of generalized anxiety disorder,

but they are insufficient in number and duration (only a “couple of months”

PAYMENT METHOD AND DIAGNOSIS 255

rather than 6 months) to qualify for this diagnosis. Similarly, the minimally depressive

client is described as demonstrating some symptoms of a major depressive episode,

but they are insufficient in number and duration (only a week rather than 2

weeks) to qualify for this diagnosis. In both vignettes, the client was described as

“generally functioning well in all areas of [his/her] life,” and experiencing symptoms

that have “typically passed quickly and have caused only slight impairment.”

These two phrases closely mimic the language found in the “71–80” and “81–90”

range of the Global Assessment of Functioning scale of the DSM-IV. They were intentionally

incorporated into the vignettes to corroborate that, as the minimal

symptoms imply, these clients are subclinically impaired and are functioning at a

relatively high level. In addition, the vignettes included the statements that the clients

can identify “no specific triggers” for their symptoms; this statement was included

as an attempt to ensure that the clients could not qualify for adjustment disorder

diagnoses.

After reading each vignette, which included presenting problem, symptoms,

and some background and demographic information, participants responded to

four questions: (a) “Would you assign this client a DSM–IV diagnosis?” (“yes” and

“no” choices provided), (b) “If you answered yes to the previous question, what

specific diagnosis would you provide?” (blank space, rather than specific choices,

provided), (c) “Assuming that the client does not prematurely terminate, predict

the length of therapy, in number of sessions,” and (d) “What prognosis would you

give this client?” For the final question, participants were provided with a 5-point

Likert-type scale ranging from 1 (extremely poor) to 5 (extremely good).

RESULTS

Tables1and2displaythefrequenciesof“yes”and“no”responses,forbothpayment

conditions, to the item, “Would you assign this client a DSM–IV diagnosis?” As the

tables illustrate, assignment of a diagnosis was more common for managed care clients

than for out-of-pocket clients across both vignettes. The percentage of “yes”

and “no” responses to the managed care condition were used as comparisons for the

out-of-pocket condition in two chi-square tests for goodness of fit (one for each vignette).

For the first vignette (minimally anxious symptoms), χ2(1,N= 270) = 22.29

p < .001, and for the second vignette (minimally depressive symptoms, χ2 (1, N =

272) = 21.02, p < .001, there was a significant association between the method of

payment and whether or not the client would be diagnosed. These highly significant

chi-squarestatisticsindicatethatthelikelihoodofaparticipantassigningadiagnosis

to a minimally impaired client paying via managed care is significantly higher than

the likelihood of a participant assigning a diagnosis to the same client paying out of

pocket. Specifically, based on the odds ratio calculated from data in all four cells of

the chi-square, the client with minimally depressive symptoms paying via managed

256 POMERANTZ AND SEGRIST

care was 3.17 times more likely than an identical client paying out of pocket to be diagnosed

with a DSM disorder. Similarly, based on the odds ratio, the minimally anxious

client paying with managed care was 3.33 times more likely to be diagnosed

with a DSM disorder than an identical client paying out of pocket.

Anecdotally, it is noteworthy that 9.68% of participants in the managed care

condition who responded “yes” to the initial question (“Would you assign this client

a DSM–IV diagnosis?”) included unsolicited written comments about thirdparty

reimbursement. Specifically, these participants inserted comments to the effect

that assigning a diagnosis was a necessity for payment or reimbursement. Examples

of these comments include, “She has not had symptoms long enough to really

warrant the diagnosis but I would need to give her a diagnosis to bill her

HMO,” and “Need a code for insurance.” The appearance of these comments is especially

interesting because there was no request or designated space for comments

on the questionnaire.

The item “If you answered yes to the previous question, what specific diagnosis

would you provide?” generated a wide variety of responses from participants. TaPAYMENT

METHOD AND DIAGNOSIS 257

TABLE 1

Frequencies of “Yes” and “No” Responses to the Item “Would You Assign

This Client a DSM-IV Diagnosis?” by Payment Method Regarding Vignette

No. 1 (Minimally Anxious Client)

Yes No

Frequency % Frequency % Total

Managed care 90 72.0 35 28.0 125

Out of pocket 63 43.4 82 56.6 145

Total 153 117 270

Note. DSM-IV = Diagnostic and Statistical Manual of Mental Disorders (4th ed.; American Psychiatric

Association, 1994).

TABLE 2

Frequencies of “Yes” and “No” Responses to the Item “Would You Assign

This Client a DSM-IV Diagnosis?” by Payment Method Regarding Vignette

No. 2 (Minimally Depressive Client)

Yes No

Frequency % Frequency % Total

Managed care 79 63.7 45 36.3 124

Out of pocket 53 35.8 95 64.2 148

Total 132 140 272

Note. DSM-IV = Diagnostic and Statistical Manual of Mental Disorders (4th ed.; American Psychiatric

Association, 1994).

bles 3 and 4 display the frequencies and percentages of the specific diagnoses provided

for each vignette.

Regarding estimated number of sessions needed to treat each client, participants

predicted a mean of 9.97 sessions (SD = 9.92) for the minimally anxious

client, with a mean prognosis of 4.40 (SD = .65). For the client with minimally

depressive symptoms participants predicated a mean of 10.08 sessions (SD =

10.79) and a prognosis of 4.43 (SD = .62). Independent samples t tests indicated

that portrayed method of payment had no significant effect on estimates

of the duration of therapy or the prognosis of the hypothetical clients. Specifically,

there was no significant difference in the estimated duration of therapy

for the minimally anxious client paying for therapy through managed care,

M = 9.43, SD = 8.04, and the same client paying for therapy out of pocket,

M = 10.38, SD = 11.16; t(229) = –.72, p = .47. In addition, there was no significant

difference in the perceived prognosis of the minimally anxious client paying

through managed care, M = 4.35, SD = .71, and paying out of pocket, M = 4.45, SD

= .60; t(221.36) = –1.22 , p = .23. Similarly there was no significant difference in

the estimated duration of therapy for the client with minimally depressive symptoms

paying for therapy through managed care, M = 10, SD = 9.76, and the same

client paying for therapy out of pocket, M = 10.15, SD = 11.52; t(228) = –.13, p =

.90. There was also no significant difference in the perceived prognosis of the client

with minimally depressive symptoms paying through managed care, M = 4.41,

SD = .65, and paying out of pocket, M = 4.45, SD = .60; t(256) = –.58, p = .57.

258 POMERANTZ AND SEGRIST

TABLE 3

Frequencies and Percentages of DSM-IV-TR Diagnoses Assigned

to Vignette No. 1 (Minimally Anxious)

DSM-IV Diagnosis Frequency %

Adjustment disorder with anxiety 46 31.1

Anxiety NOS 41 27.7

Generalized anxiety disorder 22 14.9

Adjustment disorder with mixed anxiety and depression 20 13.5

Adjustment disorder NOS 5 3.4

Diagnosis deferred 5 3.4

Depression NOS 4 2.7

Dysthymic disorder 2 1.4

Major depression, recurrent, moderate 1 .7

Panic disorder with agoraphobia 1 .7

V code 1 .7

Note. DSM-IV = Diagnostic and Statistical Manual of Mental Disorders (4th ed.; American Psychiatric

Association, 1994); DSM-IV-TR = DSM-IV (Text Rev., 2000); NOS = not otherwise specified.

Sample (n = 148) composed of those participants who responded “Yes” to the question, “Would you assign

this client a DSM-IV diagnosis?”

"Is this question part of your assignment? We can help"

ORDER NOW