APA Practice Organization mobilizes on Medicare payment cuts

Psychologists are opposing Medicare reimbursement reductions that will put providers' bottom lines at stake and jeopardize access to care for millions of the nation's elderly and disabled

by Government Relations and Communications Staff

September 13, 2006 — Under current law, the Medicare payment formula will trigger a 5.1 percent reimbursement cut in January 2007, with additional reductions forecast for later years. Add to that a proposal issued in June by the Centers for Medicare and Medicaid Services (CMS) that would reduce by 10 percent the work “relative value units” (RVUs) pertaining to all professional services under Medicare — also targeted to take effect this coming January. Along with RVUs for practice and malpractice expenses, work RVUs factor into reimbursement amounts for Medicare services.

The potential impact could put Medicare providers’ bottom lines at stake. Nearly all will face major reimbursement cuts in January. However, between the scheduled 5.1 percent reduction along with the proposed work RVU cut, mental health professionals appear to be particularly hard hit. Psychologists and social workers, for example, could face Medicare payment decreases of as much as 14 percent in January.

At the same time, the combined payment reductions could jeopardize access to care for millions of the nation’s elderly and disabled. “The proposed cuts undermine Congress’ goal of having a Medicare payment system that preserves patient access and achieves greater quality of care,” says Marilyn Richmond, JD.

In response, the APA Practice Organization has mobilized to fight the cuts and their adverse impact on both practitioners and Medicare beneficiaries who need psychological services.

Under the June 2006 proposal, CMS will increase payments to physicians for evaluation and management (E & M) services. These services include taking a patient's history, reviewing the patient's symptoms, conducting patient examinations, medical decision making, counseling, drug management, interpreting laboratory and other studies, and coordination of care.

Boosting payment for E & M services will increase Medicare’s cost to the federal government. Under federal law, CMS is required to maintain “budget neutrality” for the Medicare program. So to offset the higher outlays for E & M services, the federal agency proposes cuts in work RVUs for all provider services.

The APA Practice Organization is setting its sights on combating the substantial proposed Medicare cuts while also seeking to remove the prohibition against psychologists providing E & M services.

CMS has historically taken the position that psychologists cannot bill for E&M because they are not authorized to deliver all of these services. Yet psychologists routinely provide many of the elements of E & M services, including decision making to establish a diagnosis and treatment options, analysis of tests, records and other information, counseling, and coordination of care. Further, licensed psychologists may provide medical consultation with a patient and/or the patient’s physician in 11 states.

The APA Practice Organization believes a good case can be made to allow psychologists to bill for the appropriate level of an E & M service to ensure that practitioners are properly recognized for the “face time” and care management services that they provide to their patients. “Given the CMS recommendations for cuts to offset E & M increases, combined with the fact that the issue of reimbursement cuts will be put squarely before Congress, presents an opportunity for us to take the issue of psychologists having access to the E & M codes directly to Congress,” said APA Executive Director for Professional Practice Russ Newman, PhD, JD.

The organization is joining forces with social work and other interested groups to bring to Congress the problem of the work RVU cut on many services provided to patients, and particularly its impact on access to mental health services. A grassroots campaign underway to bring this message to Congress thus far has elicited more than 6,000 emails from APA members. In addition, legislative advocacy staff for the APA Practice Organization are meeting with several key members of Congress to see what may be done to ease the impact on Medicare mental health services.

“While there is no guarantee, we may be able to successfully overcome the scheduled 5.1% payment reduction, as we have in past years,” said Doug Walter, J.D., legislative counsel for the APA Practice Organization. “Nearly every health care provider group is united in working to stop this cut, and we have a good shot at it again this year.”

At the same time, Walter cautions, the RVU cut will be much more difficult to stop. Some physicians will benefit from increased E & M reimbursement, while other physicians appear willing to accept the cut in hopes that their own payment issues will be addressed in later years. Nonphysician providers also have varying interests related to the CMS rule, even though they also face cuts.

Medicare Payment Reminder: Local Medicare carriers will not issue payments for Medicare claims from September 22 through September 30. As mandated by the Deficit Reduction Act of 2006, payments that would have been made during the nine-day period by mail or direct deposit will be held until October 2, 2006.

Interest will not accrue nor will late penalties apply to these payments. However, claim denials will continue to be processed during the nine-day period.