Medicare payment requires intensive advocacy

Here's how the APAPO and grassroots psychologists are working to safeguard payment gains and minimize future reductions in Medicare reimbursement

by Government Relations Staff

September 30, 2010 — Anyone who has been keeping track knows there has been a dearth of recent good news about Medicare payment for psychologists. Facing the prospect of future payment cuts, representatives of the APA Practice Organization and grassroots psychologists continue their concerted advocacy work with the Centers for Medicare and Medicaid Services (CMS) and Congress.

Our goal: safeguarding payment gains and minimizing future reductions. 

Psychology’s advocacy efforts require considerable time and resources since the profession is faced with the prospect of Medicare payment cuts on several fronts. Here’s a wrap-up of where things now stand. 

The target: Medical Economic Index (MEI)

Background: Because policy changes related to Medicare must have a neutral impact on the federal budget, any CMS changes that result in payment increases for some services must be offset by corresponding payment reductions. The Centers for Medicare and Medicaid Services (CMS) has repeatedly made changes to Medicare payment formulas that have significantly devalued and reduced reimbursement for psychologists’ services, while bolstering payment for services involving high overhead expenses. The medical economic index (MEI) provides a recent example.

The MEI, one of many factors used to determine Medicare payment rates, is a means of measuring productivity based on two categories – the professional’s time and practice expense. Recently proposed revisions to the MEI would have a negative impact on psychological and other mental health services. As the agency has done before, CMS is proposing to disproportionately cut reimbursement for mental health and other services – by as much as 5 percent overall for psychologists – to offset the ever-increasing cost of equipment and other overhead in the health care system.

APA submitted a comment letter (PDF, 22 KB) objecting to the cuts and arguing that psychologists should not be penalized for providing cost-effective services with minimal overhead. APAPO persuaded an impressive bipartisan list of 22 Representatives to write to the CMS administrator strongly urging changes to the fee schedule in order to avert this additional 5 percent cut in reimbursement.

Read the letter to the CMS administrator from 22 Representatives (PDF, 115 KB).

Current prospect: Although we hope that CMS will reconsider the change in MEI before finalizing the 2011 Medicare Physician Fee Schedule (MPFS) Proposed Rule later this fall, the eventual impact on 2011 payment levels for psychologists is uncertain at this time. 

The target: Sustainable Growth Rate (SGR)

Background: The 2011 Medicare fee schedule reflects a substantial cut to all services as a result of the Sustainable Growth Rate (SGR) formula, which ties Medicare provider payments to factors related to the national economy. In recent years, the formula would have operated automatically to cut most provider payments if Congress had not acted to postpone the scheduled payment cuts – which it has done repeatedly.

On June 25, 2011, President Obama signed the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (H.R. 3962). That law postponed a 21.3 percent SGR cut in Medicare payments retroactive to June 1 and through November 30, 2010.

Current prospect: Senior congressional Democrats predict that SGR will receive another short-term extension through Medicare legislation that they expect Congress to pass later this year. 

The target: 5 percent payment restoration for Medicare psychotherapy services

Background: In January 2007, the Centers for Medicare and Medicaid Services (CMS) implemented across-the-board cuts to provider reimbursements as a result of the agency’s “five-year review” regulatory process. The CMS action had a disproportionately negative impact on psychological services.

But propelled by grassroots mobilization of practicing psychologists across the country, the APAPO was able to persuade Congress to restore 5 percent to Medicare psychotherapy services in 2008 and to convince both chambers to extend the provision again through the end of 2010.

Thanks to psychologists’ grassroots efforts, combined with strategic lobbying on Capitol Hill, psychotherapy services were the only services singled out for relief from the cuts resulting from the five-year review.

We continue to use a combination of grassroots advocacy and lobbying to keep the pressure on Congress to extend the psychotherapy payment restoration through 2011. For example, during the August congressional recess, psychologists throughout the U.S. used a combination of in-district meetings, the Legislative Action Center at Practice Central and phone calls to encourage their members of Congress to enact the necessary extension. Meanwhile, lobbyists for the APA Practice Organization regularly raise the issue during their meetings and other communications with members of Congress and their staff.   

Current prospect: Although there is no guarantee, extension of the psychotherapy payment restoration is likely to be part of Medicare legislation that Congress is expected to pass before the end of 2010.

The APAPO will keep members updated about emerging developments in these areas with postings on the Practice Central website and in this PracticeUpdate e-newsletter.

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