2013 Medicare payment rate update

Several factors related to Medicare policy could impact reimbursement rates for all psychological services

By Government Relations staff

Oct. 25, 2012—In the coming weeks, the Centers for Medicare and Medicaid Services (CMS) is expected to release the final rule on the 2013 Medicare fee schedule, which will include important information for psychologists who treat Medicare beneficiaries. There are four factors related to Medicare policy that could impact actual reimbursement rates for psychologists, three of which affect the entire range of services provided by psychologists.

The first factor relates to the recently revised psychotherapy family of CPT® codes. For the past three years, APAPO represented the psychology practitioner community in the CMS Five-Year Review, a process in which codes are reviewed to assess their valuation. Our participation gave professional psychology an important opportunity to report on what practicing psychologists’ work entails — both the complexity of the services and the time it takes to provide them. CMS will decide whether to accept any changes in code values recommended through the process when setting 2013 Medicare reimbursement rates, which could impact rates throughout the private sector as well.

Secondly and as previously reported, psychologists are already projected to incur on average a 3 percent reduction in their Medicare payments for 2013. This reduction results from the combination of the ongoing practice expense adjustment, the offsetting of costs associated with reimbursement for “transitional care management” (TCM) services, and other factors. In an Aug. 28 comment letter to CMS (PDF, 77KB), we took strong issue with the fact that only physicians and other health care professionals who bill Medicare for evaluation and management (E/M) services are eligible to use the new TCM codes, even though psychologists provide transitional care management services. This projected decrease is for all psychological services and is expected to take effect on Jan. 1.

The third factor is the Medicare Sustainable Growth Rate (SGR), which continues to threaten provider payments. In late February, Congress failed to permanently replace the flawed formula and instead patched the problem temporarily through the end of 2012. Because of this, the SGR’s impact, which has compounded year after year, is now calculated to reduce payments for all providers and all facilities by up to 32 percent in 2013. The final rule is expected to reflect this draconian cut, though Congress may step in again and avert it.

The final factor is the August 2011 Budget Control Act, which mandates $1.2 trillion in automatic cuts to the federal budget scheduled to take effect on Jan. 1, 2013. Unless Congress intervenes in the coming weeks, an across-the-board cut to all Medicare provider payments of up to 2 percent will occur due to this act.

Given challenges to Medicare payment associated with the SGR and Budget Control Act, the APA Practice Organization and grassroots psychologists will have to work particularly hard in the coming months due to the short timeline, crowded congressional schedule and escalating Capitol Hill partisanship. Your grassroots communications to your elected officials about the impact of these potential cuts on your patients, practice and profession will be crucial. Please be prepared to take action in the weeks ahead.

APAPO will continue to keep members up-to-date with information about the final fee schedule and related developments as they become available throughout the remainder of 2012.

Current Procedural Terminology (CPT®) copyright. 2011 American Medical Association. All rights reserved.