April 2015

With the help of professional psychology’s advocacy efforts, Congress has repealed the Medicare sustainable growth rate (SGR) formula once and for all. Late Tuesday, the U.S. Senate passed H.R. 2, The Medicare Access and CHIP Reauthorization Act (MACRA) by a vote of 92-8. The U.S House of Representatives overwhelmingly passed MACRA in March, and President Obama is expected to sign the bill into law.

In the past month leading up to this historic vote, psychologists from around the country sent more than 13,000 letters to their members of Congress and visited more than 350 congressional offices during the 2015 State Leadership Conference. The APA Practice Organization (APAPO), along with several other health care organizations, has advocated on this issue for more than 10 years.

The bill will replace the flawed SGR formula with a 0.5 percent increase in Medicare reimbursement for all Medicare providers including psychologists starting July 2015 through December 2015, and includes annual increases of 0.5 percent through 2019. Additional measures to help the transition to a new Medicare payment system include:

  • From 2020-2025, reimbursement rates will stay at the 2019 levels.
  • In 2026, Medicare providers will receive an annual update of 0.25 percent and professionals participating in tests of alternative payment models would receive an annual update of .75 percent.

MACRA also establishes an incentive payment program called the Merit-Based Incentive Payment System (MIPS) which transitions the three existing incentive programs (the Physician Quality Reporting System, Value-Based Modifier, and Meaningful Use of electronic health records) into one consolidated program. Medicare physicians and certain primary care providers are eligible in 2019 for MIPS, and other health professionals will be added in 2021.

The law also encourages participation in alternative payment models (APMs). Eligible providers, including psychologists, who participate in APMs that include risk-sharing and quality measurement components will be eligible for a 5 percent bonus between 2019-2024 if they meet certain criteria. Providers participating in APMs are not eligible to participate in MIPS.

Besides repealing and replacing SGR, MACRA extends funding for the Children’s Health Insurance Program (CHIP) through Sept. 30, 2017. CHIP is authorized through 2019, but funding for the program only ran through September of this year.

“This is a huge victory for psychologists, their patients and the entire health care system,” said APA Executive Director for Professional Practice Katherine C. Nordal, PhD. “When professional psychology stands up for their patients, Congress listens. We couldn’t have done it without the tireless grassroots support of our members.”

Payment of claims submitted April 1-14

The Centers for Medicare and Medicaid Services (CMS) has been holding claims in anticipation of congressional action since the 21 percent SGR cut went into effect April 1. Congress retroactively repealed the SGR formula, so services that occurred on or after April 1 will be paid at the same rate as services furnished before April 1. According to an April 13 statement from CMS, the agency will begin processing held claims on April 15. Any claims paid at the reduced rate will automatically be reprocessed at the corrected, higher rate. Providers are encouraged to contact their Medicare Administrative Contractor if they have any questions about their claims.

Looking ahead

Because Medicare is subject to budget neutrality, services with relatively low overhead and practice expense costs — including psychologists’ services — are still unfairly reduced to offset increases in services with higher practice expense costs. APAPO has asked CMS to address this problem, which is separate from the SGR, and is developing legislative recommendations to reverse the steady decline in Medicare reimbursement rates for psychologists.

Now that the SGR formula has been repealed, the APA Practice Organization continues to focus on the rest of our legislative advocacy goals:

APAPO will continue to educate our members about this new law and how it affects their practice. Visit the Practice Central website for more information.