Congress should restore Medicare mental health services cuts

by Government Relations Office

To protect mental health benefits that Medicare patients receive, Congress should extend for two years the restoration of reimbursement cut from psychologists' and social workers' services and also make psychologists eligible for E&M reimbursement for the services they provide within their licensure.

As Congress considers Medicare legislation in 2009, it should continue the restoration of reimbursement that was cut by the Centers for Medicare & Medicaid Services (CMS) Five Year Review in 2007. In Sec. 138 of the Medicare Protection for Patients and Providers Act, Congress restored the 5 percent cut by the Five Year Review. As this section expires on December 31, 2009, new legislation is needed to continue the restoration through December 2011, after which the results of the next five year review become effective.

The Centers for Medicare & Medicaid Services (CMS) slashed Medicare part B reimbursement for psychologists and social workers effective January 1, 2007. Because psychologists and social workers provide almost all of the Medicare psychotherapy and testing services, many senior citizens may lose access to these services, as psychologists and social workers have indicated they may have to reduce their caseloads or leave the Medicare program all together.

This cut is attributable to the CMS "5-year review" (71 Fed. Reg. 37170). Under the 5-year review rule, CMS increased payments for physician E&M codes, raising Medicare costs by $4.5 billion. Required by law to keep its costs budget neutral, CMS offset the higher E&M payments by reducing the work relative value units (RVUs) for all Medicare services.

The 5-year review cut is different from pay adjustments related to the Sustainable Growth Rate (SGR). Congressional action late last year to avert the scheduled 10.1% pay decrease under the SGR formula and replace it with a 0.5 percent increase through June 30th was critically important to keeping psychologists' and other provider payments from plummeting further. Congress should continue to stop cuts through this year.

Mental health and psychological testing services are hardest hit by the 5-year review cut since reimbursement values for these services are heavily weighted by work RVUs. E&M services are important, but E&M payments should not be increased at the sacrifice of Medicare mental health services. Psychologists and social workers are not eligible for E&M reimbursement and should not shoulder the burden for the increase in physician E&M payments.

CMS does not, but should reimburse psychologists for the E&M services they provide within their licensure. Psychologists perform many E&M services now, including providing consultations, establishing diagnosis and treatment options, analyzing tests and records, and counseling and coordinating care, but CMS prohibits psychologists from billing for E&M services under a vaguely described rationale that these are "medical" services. Since psychologists can and do provide some of these services now, they should be permitted to provide them to Medicare beneficiaries in accordance with their licensure. In this way, psychologists will be able to more accurately bill for the actual services that they provide.

The cost is very low to protect mental health. Removing psychologists and social workers from the cut would reduce CMS's budget neutrality adjuster by a mere $30 million per year of the $4.5 billion 5-year review costs associated with E&M payments. Making psychologists eligible for E&M reimbursement will increase Medicare costs by approximately $6 million per year.

To protect mental health benefits that Medicare patients receive, Congress should extend for two years the restoration of reimbursement cut from psychologists' and social workers' services and also make psychologists eligible for E&M reimbursement for the services they provide within their licensure.

As Congress considers Medicare legislation in 2009, it should continue the restoration of reimbursement that was cut by the Centers for Medicare & Medicaid Services (CMS) Five Year Review in 2007. In Sec. 138 of the Medicare Protection for Patients and Providers Act, Congress restored the 5 percent cut by the Five Year Review. As this section expires on December 31, 2009, new legislation is needed to continue the restoration through December 2011, after which the results of the next five year review become effective.

The Centers for Medicare & Medicaid Services (CMS) slashed Medicare part B reimbursement for psychologists and social workers effective January 1, 2007. Because psychologists and social workers provide almost all of the Medicare psychotherapy and testing services, many senior citizens may lose access to these services, as psychologists and social workers have indicated they may have to reduce their caseloads or leave the Medicare program all together.

This cut is attributable to the CMS "5-year review" (71 Fed. Reg. 37170). Under the 5-year review rule, CMS increased payments for physician E&M codes, raising Medicare costs by $4.5 billion. Required by law to keep its costs budget neutral, CMS offset the higher E&M payments by reducing the work relative value units (RVUs) for all Medicare services.

The 5-year review cut is different from pay adjustments related to the Sustainable Growth Rate (SGR). Congressional action late last year to avert the scheduled 10.1% pay decrease under the SGR formula and replace it with a 0.5% increase through June 30th was critically important to keeping psychologists' and other provider payments from plummeting further. Congress should continue to stop cuts through this year.

Mental health and psychological testing services are hardest hit by the 5-year review cut since reimbursement values for these services are heavily weighted by work RVUs. E&M services are important, but E&M payments should not be increased at the sacrifice of Medicare mental health services. Psychologists and social workers are not eligible for E&M reimbursement and should not shoulder the burden for the increase in physician E&M payments.

CMS does not, but should reimburse psychologists for the E&M services they provide within their licensure. Psychologists perform many E&M services now, including providing consultations, establishing diagnosis and treatment options, analyzing tests and records, and counseling and coordinating care, but CMS prohibits psychologists from billing for E&M services under a vaguely described rationale that these are "medical" services. Since psychologists can and do provide some of these services now, they should be permitted to provide them to Medicare beneficiaries in accordance with their licensure. In this way, psychologists will be able to more accurately bill for the actual services that they provide.

The cost is very low to protect mental health.
Removing psychologists and social workers from the cut would reduce CMS's budget neutrality adjuster by a mere $30 million per year of the $4.5 billion 5-year review costs associated with E&M payments. Making psychologists eligible for E&M reimbursement will increase Medicare costs by approximately $6 million per year.