Senate continues to consider Medicare payment legislation

Negotiations are underway among Senate leaders to create a compromise package, after the Baucus-Snowe Medicare Bill falls five votes short of moving to the Senate floor

by Government Relations Staff

June 18, 2008 — Thanks to APA Practice Organization (APAPO) advocacy, a provision to restore Medicare funding of psychological services was included in the Senate Finance Committee's Medicare bill that came up for a vote last week. However, on June 12 the Baucus-Snowe Medicare bill (S.3101) fell five votes short of the number necessary for consideration on the Senate floor. Negotiations among Senate leaders for both parties began yesterday toward a compromise package.

The APAPO also succeeded in having a similar provision to restore Medicare payments included in the Children's Health and Medicare Protection (CHAMP) Act that passed the House last August.

"Over the past year, our strong grassroots efforts have succeeded in getting the restoration of Medicare funding for psychological services passed by the House and into the Senate Finance Committee's bill," said Marilyn Richmond, JD, assistant executive director of government relations for the APAPO. "As negotiators return to the table and face pressures to narrow the measure due to budget limitations, we'll continue to press this priority stance for psychology."

Members can visit the Legislative Action Center to send a letter urging their senators to support inclusion of Section 138 in the final Medicare bill.

While firm plans for how Senate Finance Committee leaders will proceed have not been determined, the APAPO will continue to advocate for passage of a final Medicare bill that:

Restores five percent to funding for psychotherapy and related services cut in 2007 as a result of the Centers for Medicare and Medicaid Service's (CMS) five-year review.
Every five years, CMS looks at certain codes and determines whether they are overvalued or undervalued. The decision was made to boost payment for "evaluation and management" (E/M) codes starting January 1, 2007. Budget neutrality requirements forced a reduction in all other codes. This payment cut hit psychologists the hardest because of their ineligibility for E/M reimbursement and the way in which Medicare calculates the value of psychological services.

Includes Medicare coinsurance parity.
Currently, Medicare beneficiaries are responsible for 50 percent of the bill for mental health services, but only 20 percent for other services. Under the coinsurance parity provision in the Senate bill, by 2014 mental health services would enjoy the same 80-20 percent split. This gradual change would help alleviate the financial shortfall suffered by many practitioners who are unable to collect the coinsurance from the beneficiary. The House, with strong support from the APAPO, last year passed legislation that includes immediate 80-20 percent parity for Medicare coinsurance.

Halts the 10.6 percent Sustainable Growth Rate (SGR) cut.
The SGR is a formula that determines each year if Medicare reimbursements will increase or decrease from the year before. For the last six years, the reimbursement rate has dropped, and every year Congress takes action to stop the cut from taking effect. In December 2007, Congress delayed implementation of the cut from taking effect for six months. That six-month delay ends on July 1; the Baucus-Snowe bill was the Senate's effort to further postpone the cut and implement a 1.1 percent update for 2009.

Please Note: While the Senate is working against a deadline, the possibility exists that a new law will not be in place before the six-month delay ends. Even if a bill is passed by Congress and signed into law before July 1, there may still be at least a temporary disruption in payment for health care providers, as Medicare contractors typically need at least two weeks to adjust their computer systems to reflect payment changes.

Because the contractors' systems are now set to apply this 10.6 percent cut to the conversion factor starting on July 1, claims filed on or soon after that date are expected to be paid at lower rates even if a new law simultaneously takes effect.

Psychologists intending to submit claims in July should carefully review any information from their regional contractor or CMS concerning how such claims will be handled. If CMS indicates the payment cut will be applied for only a limited time, psychologists may want to delay filing their claims until the transition period is over. If Congress halts the cut, claims paid at the reduced rate during the transition period will be paid in full by the contractor at a later date.

If you have further questions, contact government relations staff for the APAPO by sending an e-mail to the Government Relations Department or calling 202-336-5889.