2013 Medicare payments for psychologists

Final fee schedule affects Medicare reimbursement rates and the commercial carrier market

Nov. 14, 2012—The Centers for Medicare and Medicaid Services (CMS) published on Nov. 1 the final rule on the 2013 Medicare physician fee schedule, which includes important information for psychologists who treat Medicare beneficiaries. This is the first publication from the federal government about factors affecting 2013 Medicare reimbursement rates. These rates often also affect the commercial carrier market.

Key highlights for our practitioner members include:

  • CMS has revised its previously announced estimate and is now projecting only a 2 percent average reduction in payments to psychologists for 2013, rather than the 3 percent decrease projected in the proposed Medicare fee schedule rule published in July. This reduction will affect all billing codes used by psychologists, including health and behavior and testing codes.

  • Regarding psychotherapy codes, CMS declined to make a final decision about the value of the professional work associated with the new family of CPT® psychotherapy codes that take effect on Jan. 1, 2013. The work “relative value unit” (RVU) is factored into the calculation of Medicare reimbursement amounts. Instead, CMS announced in the final rule that the agency has assigned “interim” work RVUs for the codes in 2013 that maintain work values comparable to the current psychotherapy codes. However, CMS decided to lower considerably the “practice expense” assigned to family and group psychotherapy codes. Practice expense – the overhead costs allocated to providing a service — is another component of the Medicare payment formula in addition to the work RVU. 

  • The CMS final rule does not include 2013 payment amounts for psychotherapy services. Based on our initial analysis of the nearly 1,400-page CMS rule, psychologists generally should not suffer an additional loss in psychotherapy payment amounts for 2013 beyond the 2 percent average reduction expected for all psychological services, except for family and group psychotherapy codes. The national payment rates for the family and group psychotherapy codes likely will decline significantly effective Jan. 1, 2013 — perhaps in the range of 10 or more percent lower than 2012 Medicare reimbursement levels.

Medicare reimbursement amounts ultimately paid to individual practitioners will reflect geographic adjustments applied to national payment rates. Check your Medicare Administrative Contractor (MAC) website (see list below) for 2013 payment schedules, some of which have already been released. If applicable, you may also wish to visit private insurance carrier websites for information about their 2013 payment rates.

Independent of the CMS final rule, all health care providers face a 26.5 percent payment cut across-the-board for Medicare services that will also take effect on Jan. 1, 2013 unless Congress takes action on the Sustainable Growth Rate (SGR) problem. This precipitous cut is reflected in 2013 Medicare payment schedules already published on some MAC websites.

Congress already has blocked the SGR payment cut 14 times since 2001. Given current economic and political circumstances, there is no guarantee that Congress will postpone the SGR cut from taking effect on Jan. 1, 2013. APAPO and virtually all other health care organizations are advocating aggressively to prevent the SGR cut.

Future issues of our PracticeUpdate e-newsletter will contain further details about the 2013 Medicare fee schedule rule, including other important aspects of the rule such as the Physician Quality Reporting System (PQRS). Our Practice Central website already contains extensive information about the new psychotherapy codes for 2013. Visit the Billing and Coding page regularly for updates about these codes.

Medicare Administrative Contractor (MAC) list

* 2013 payment schedule has been posted as of Nov. 14

If you have any questions please email us or call the toll-free Practitioner Helpline at (800) 374-2723.