CMS releases final rule on 2011 Medicare fee schedule

Centers for Medicare and Medicaid Services rule has disproportionately negative impact on mental health reimbursement

by Government Relations Staff

November 18, 2010—In July the Centers for Medicare and Medicaid Services (CMS) released its proposed rule on the 2011 Medicare fee schedule, which reflected an expected cut to all services as a result of the Sustainable Growth Rate (SGR) formula and changes to the Physician Quality Reporting Initiative (PQRI) payments, as well as revisions to the medical economic index (MEI) that would significantly negatively impact psychological and other mental health services. 

As it has done before, CMS proposed to disproportionately cut reimbursement for mental health and other cost-effective services, by as much as 5 percent overall for psychologists, to offset the ever-increasing cost of equipment, technology and overhead in the system. 

The Practice Directorate quickly went to work:

During the comment period, the American Psychological Association (APA) submitted a letter objecting to the cuts and arguing that psychologists should not be penalized for providing cost-effective services with minimal overhead (PDF, 22 KB).

In addition, the APA Practice Organization, with the grassroots support of the Federal Advocacy Network, persuaded a bipartisan group of 22 House members to signal their opposition to the MEI’s impact on mental health directly to CMS (PDF, 114 KB). 

Despite psychology’s demonstration of strong support on the Hill for more thoughtful consideration of the disproportionate impact on mental health, CMS this week published its final rule, which includes a chart showing a 4 percent cut resulting from the MEI rebasing. This reduction, slightly less than the originally proposed 5 percent, will be implemented on January 1, 2011, as will the final 2 percent reduction in practice expense resulting from the four-year phase-in announced in 2006.

Given the short timeframe and current political upheaval, there is very little chance that Congress would be willing or able to fashion a remedy during the upcoming lame duck session. As a result, APAPO has begun to confer with our allies on the Hill and among other affected specialties to devise a strategy to address this reimbursement change and/or the process that leads to changes like these early in 2011. 

However, this bad news from CMS further underscores the critical importance that Congress immediately address our other reimbursement priorities — halting the 23 percent SGR cut scheduled for December 1 and securing an extension of the 5 percent psychotherapy payment restoration we won for 2009 and 2010

APAPO will keep members updated about emerging developments on these priorities and will request your grassroots support with action alerts through the Federal Advocacy Network and with postings on the Practice Central website and in the Practice Update e-newsletter.

If you have questions, please contact the Government Relations Department at 800-374-2723, ext. 5889 or by e-mail.