APA Practice Organization pushes for extension of Medicare psychotherapy payments

Psychology organization gives testimony to House hearing

By Government Relations Staff

September 30, 2011—The American Psychological Association Practice Organization (APAPO) submitted testimony at a September 21 House Ways and Means Subcommittee on Health hearing that examined expiring Medicare provider payment provisions. The APAPO requested support of legislation to extend through 2012 the law that restored cuts to Part B mental health services made by the Centers for Medicare & Medicaid Services in 2007.

Among the points made by APAPO in its testimony:

  • Every five years, the Centers for Medicare and Medicaid Services (CMS) looks at certain codes and determines whether they are overvalued or undervalued for Medicare payment. The valuation of psychotherapy codes in the 2011 Five Year Review has been delayed into 2012. Congress should pass new legislation to extend payments through 2012, until the current Five Year Review is completed. 

  • Under the Five Year Review rule, CMS increased payments for physician evaluation and management (E&M) codes, raising Medicare costs by $4.5 billion. Required by law to keep its costs budget neutral, CMS offset the higher E&M payments by reducing the work relative value units (RVUs) (PDF, 1.16MB) for all Medicare services. Mental health and psychological testing services were hardest hit by the Five Year Review cut since reimbursement values for these services are heavily weighted by RVUs. Psychologists and social workers are not eligible for E&M reimbursement and should not shoulder the burden for the increase in physician E&M payments. 

  • Extending psychologist payments cut by the Five Year Review is crucial to protecting access to Medicare mental health services. Psychologists and social workers provide almost all of the Medicare psychotherapy and testing services, but many psychologists have indicated that they may have to reduce their caseloads or leave Medicare if they are faced with these reimbursement cuts. 

  • Psychologists were saved from a second and even more devastating reduction when Congressional action halted the projected 25 percent Sustainable Growth Rate (SGR) cut through December 31, 2011. Since December 19, 2009, Congress has voted to postpone the SGR cut five times. The Medicare SGR payment formula, which adjusts Medicare provider payments based on factors related to the national economy, would have operated automatically to cut most provider payments if Congress had not acted yet again to postpone the scheduled cuts. A larger SGR cut is scheduled for January 1, 2012. Ultimately Congress must replace the flawed SGR formula with one that responsibly and permanently addresses provider payments.

The House hearing concerned a number of Medicare provider payment policies that expire on or before December 31, 2011. Many of these policies have been extended multiple times over several years, even if they were initially conceived as short-term or even one-time payment changes. The provisions touch many parts of the Medicare program.

Health Subcommittee Chairman Rep. Wally Herger (R-CA) pointed out that Congress has often changed the expiration date without actually closely examining whether the policy is still necessary or appropriate. The Subcommittee’s hearing allowed provider groups to explain the impact each of the payment policies has had and offer suggestions for improvements.

At the hearing the American Medical Association (AMA) specifically endorsed the five percent psychotherapy restoration and three other payment “extenders.” The AMA chairman of the board called the mental health add-on payments “important for ensuring access to mental health services.”

Read the testimony (PDF, 40KB)

For more information, contact the Government Relations office by email or at (202) 336-5889.