Method of Payment Influence Psychologists
How Does Clients’ Method of Payment Influence Psychologists’
Diagnostic Decisions?
Amy M. Kielbasa, Andrew M. Pomerantz, Emily J. Krohn,
and Bryce F. Sullivan
Department of Psychology
Southern Illinois University, Edwardsville
To what extent does payment method (managed care vs. out of pocket) influence the
likelihood that an independent practitioner will assign a Diagnostic and Statistical
Manual of Mental Disorders (American Psychiatric Association, 1994) diagnosis to
a client? When a practitioner does diagnose, how does payment method influence the
specific choice of a diagnostic category? Independent practitioners responded to a vignette
describing a fictitious client with symptoms of depression or anxiety. In half of
the vignettes, the fictitious client intended to pay via managed care; in the other half,
the fictitious client intended to pay out of pocket. Payment method had a very significant
impact on diagnosis such that relative to out-of-pocket clients, managed care clients
were much more likely to receive diagnoses and more likely to receive adjustment
disorder diagnoses in particular. We discuss implications involving informed
consent and other ethical issues.
Keywords: diagnosis, managed care, independent psychotherapy practice, ethics,
payment
The effects of managed care and other forms of third-party payment on the independent
practice of psychology have been studied via numerous empirical surveys
of practitioners (e.g., Bell, 1999; Murphy, DeBernardo, & Shoemaker, 1998;
Phelps, Eisman, & Kohout, 1998; Rothbaum, Bernstein, Haller, Phelps, & Kohout,
1998). Additionally, numerous authors have published nonempirical commentarETHICS
& BEHAVIOR, 14(2), 187–195
Copyright © 2004, Lawrence Erlbaum Associates, Inc.
Requests for reprints should be sent to Andrew M. Pomerantz, Southern Illinois University,
Edwardsville, Campus Box 1121, Department of Psychology, Edwardsville, IL 62026. E-mail:
apomera@siue.edu
ies on the impact of managed care on psychotherapy (e.g., Karon, 1995; Miller,
1996). These surveys and commentaries have focused on the effects of managed
care on many aspects of the therapy process, including duration, quality of care,
confidentiality, and to some extent assessment, but limited attention has been paid
to the effect of managed care on specific diagnostic decisions made by clinicians.
Thus, our purpose in this study was to examine two specific questions involving
the relation between payment method and diagnosis: To what extent does payment
method (managed care vs. out of pocket) influence the likelihood that an independent
practitioner will assign a Diagnostic and Statistical Manual of Mental Disorders
(4th ed. [DSM–IV]; American Psychiatric Association, 1994) diagnosis to a
client? When a practitioner does assign a DSM–IV diagnosis, how does payment
method influence the choice of a specific diagnostic category?
Restrictions imposed by insurance companies and managed care organizations
have resulted in a decline in payment for psychodiagnostic testing in recent years
(e.g., Butcher, 1997; Cashel, 2002; Piotrowski, Belter, & Keller, 1998), but it is not
entirely clear how truncated assessment procedures might influence the likelihood
of psychologists assigning diagnoses at all, and if they do, how they influence the
choice of a particular diagnostic category. Murphy et al. (1998) found that Division
42 members (Psychologists in Independent Practice) of the American Psychological
Association strongly believed that managed care has led to inadequate or inappropriate
assessment and also that managed care influences psychologists to alter
diagnoses to ensure reimbursement and protect patient confidentiality. Danziger
and Welfel (2001) similarly found that mental health counselors report problems
accurately diagnosing clients in a managed care system. Epstein et al. (2001)
found that the probability of a psychiatrist diagnosing a patient with major depression
depends on the percentage of patients who pay that psychiatrist via managed
care. Beyond these few studies, however, the literature lacks empirical studies exploring
the relation between payment method and diagnosis by mental health professionals.
Particularly absent are quasi-experimental studies in which clinicians
are presented with descriptions of clients who pay differently but are otherwise
identical. This study represents an attempt to fill this void in the literature.
METHOD
Participants
Members of Division 42 of the American Psychological Association were randomly
selected and surveyed via mail. Of the 750 members who were surveyed,
188 respondents provided usable data, representing a 25.06% return rate. Mean
age of participants was 54.81 years (SD = 9.16), and mean number of years in private
practice was 20.21 (SD = 8.41). Respondents were primarily men (65.45%)
188 KIELBASA, POMERANTZ, KROHN, SULLIVAN
and White (97.40%). Most had earned PhD degrees (88.00%) as opposed to EdD
(6.80%) or PsyD (5.20%) degrees, and most specialized in clinical psychology
(86.50%) as opposed to counseling psychology (12.00%) or other areas (1.50%).
Eclectic orientation was most frequently endorsed (45.50%), followed by cognitive
(28.30%) and psychodynamic (14.70%). Most (63.40%) worked primarily in solo
independent practices, whereas some (29.30%) worked primarily in group independent
practices.
Materials, Design, and Procedure
Each participant received a survey that included two vignettes, one describing a
client with depressive symptoms and another describing a client with anxious
symptoms. For participants in the managed 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 with a problem commonly seen
by independent practitioners, the severity of which was near the threshold for a
DSM–IV diagnosis. Specifically, the anxious client was described as demonstrating
just enough symptoms of generalized anxiety disorder to consider the assignment
of this diagnosis. The depressive client was described as demonstrating several
of the symptoms of a major depressive episode but not quite enough to merit
the diagnosis. The description of the depressive client’s symptoms also lacked any
mention of symptom duration, which according to DSM–IV, must exceed 2 weeks.
The vignettes also included additional (nonsymptomatic) background information
about each client (gender, marital status, work, activities, etc.) to “flesh out” the
character and make him or her seem more like an actual client rather than an abstraction
or mere list of symptoms. The blend of symptoms with nonsymptomatic
background information was intended to match the actual presentation of clients in
independent practice.
After reading each vignette (which included presenting problem, symptoms,
and some background and demographic information), participants were asked
“Would you assign this client a DSM–IV diagnosis?” (“yes” and “no” choices provided),
and “If you answered yes to the previous question, what specific diagnosis
would you provide?”(blank space rather than specific choices provided).
RESULTS
Tables 1 and 2 display the frequencies of yes and no responses to the item, “Would
you assign this client a DSM–IV diagnosis?”As the tables illustrate, assignment of
PAYMENT METHOD AND DIAGNOSIS 189
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 example, in the first
vignette (anxious client), 77.6% of participants assigned a diagnosis to the managed
care client, whereas 22.4% of participants did not assign a diagnosis to the
managed care client. These percentages were used to calculate an “expected n” for
the out-of-pocket condition, which was used in the chi-square test for goodness of
fit. For the first vignette, χ2(1, N = 188) = 182.29, p < .001. For the second vignette,
χ2(1, N = 188) = 45.96, p < .001. These highly significant chi-square statistics indicated
that the likelihood of a participant assigning a diagnosis to a 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.
The item “If you answered yes to the previous question, what specific diagnosis
would you provide?” generated a wide variety of responses from participants. Specifically,
11 distinct diagnoses were offered for the anxious client in the first vignette,
and 10 distinct diagnoses were offered for the depressive client in the second
vignette. This wide variety of responses was then divided in a binary manne
