Update on Medicare payment and mental health parity

APAPO continues to prioritize Medicare payment problems and mental health parity in private insurance coverage by lobbying Congress and pursuing relevant multidisciplinary data to present to CMS

by Government Relations Staff

February 14, 2008 — The APA Practice Organization's (APAPO) top legislative priorities for 2008 involve confronting Medicare payment problems facing psychologists and achieving mental health parity in private sector insurance coverage. Members have asked us for regular updates on what we are doing to pursue these priorities.

This article summarizes briefly several related issues the APAPO is addressing and the actions we are taking on behalf of professional psychology.


The issue:
A 10.1 percent Medicare payment cut was originally scheduled to take effect at the beginning of 2008. At the behest of APAPO and other health professional societies, Congress acted in December 2007 to avert the cut for January 1. However, the legislative action simply delays the scheduled cut for six months - until July 1, 2008.

APAPO action: The APAPO is lobbying Congress to make permanent the delay in this Medicare cut and avert further payment reductions for 2009.


The issue:
Despite the delay in the 10.1 percent Medicare cut, many practitioners still face lower Medicare reimbursements in 2008 compared to 2007. There are a number of reasons involved. One factor is that in 2007 the Centers for Medicare and Medicaid Services (CMS) began using a new methodology to determine values for the "practice expense" component of Medicare reimbursement. Some services, such as diagnostic interview, now have higher practice expense rates. But practice expense rates for other services that psychologists commonly bill, including the 45- and 75-minute psychotherapy codes, were lowered. (The change in methodology for calculating practice expenses was applied to all Medicare services, not just behavioral health.)

APAPO action: We believe that many practice expenses are undervalued by the new CMS methodology. The APAPO is taking part in a large, multidisciplinary survey organized by the American Medical Association in order to provide CMS with new practice expense data that we believe more accurately reflects the cost of running a psychology practice.


The issue:
In 2006, CMS released the results of a five-year review of Medicare services. Because of changes that resulted from this review, psychologists and other health professionals experienced substantial payment cuts that took effect January 1, 2007.

APAPO action: We have lobbied members of the House and Senate extensively on this issue and continue to do so. Last year, APAPO mobilized our grassroots-psychologist constituents who sent more than 18,000 emails to legislators demanding that funds be restored. The House passed a provision in 2007 that would raise reimbursements for psychotherapy services by $30 million a year for four years. APAPO is urging senators on the Senate Finance Committee to support similar legislation when that committee of jurisdiction takes action this spring.


The issue:
In November 2006, CMS finalized a proposal to increase Medicare payments for "evaluation and management" (E&M) services effective January 1, 2007. However, psychologists are not eligible to bill using the E&M codes.

APAPO action: E&M services include functions such as establishing diagnosis and treatment options and coordinating care. As psychologists are well qualified to provide an array of E&M services, we are advocating with both CMS and Congress to make psychologists eligible to provide E&M services. This activity includes ongoing dialogue with Senator Jeff Bingaman's (D-N.M.) office to include psychologist E&M eligibility language in the Senate Finance Committee's Medicare bill (see the preceding 'action').


The issue:
Last September, the Senate passed a mental health insurance parity bill that would extend full parity protections to 113 million Americans. The issue is now before the House.

APAPO action: APAPO strongly supports the Senate bill that passed last September, having engaged in a year-long effort to secure backing for that bill from employer and insurer organizations. Our negotiations greatly lessened the chance that traditional opponents would block the legislation. APAPO is seeking passage of the House version in an effort to move the bill to House-Senate negotiations for final passage this year.