APAPO continues Medicare payment reform advocacy

Letter and meeting with CMS focused on addressing issues that continuously lower reimbursement for psychological services.

As part of the ongoing efforts to bolster declining Medicare reimbursement rates for psychologists, staff from the APA Practice Organization’s Government Relations Office and the Office of Healthcare Financing met with Sean Cavanaugh, deputy administrator of the Center for Medicare, and key members of his staff on Oct. 21, 2014. Held at the Centers for Medicare and Medicaid Services (CMS) in Baltimore, the meeting focused on addressing issues with Medicare’s payment formula that continuously lower reimbursement for psychologists’ services. A detailed letter outlining the problem (PDF, 267KB) was sent to the agency on Oct. 14 to facilitate the discussion.

Despite an 8 percent increase by Medicare in the total payment pool allocated for psychological services in 2014, psychologists are once again facing a projected decrease in 2015 due to practice expense changes in the Medicare fee schedule. Payment rates for psychologists’ services have fallen by more than 36 percent since 2007, when adjusted for inflation.

APAPO worked with Avalere Health, a leading health care research analysis firm, to identify two potential adjustments to the Medicare physician payment system, which would increase reimbursement rates for psychologists and stop the program’s slide away from adequately investing in mental health services. Each would work by limiting the unintended effects of Medicare’s practice expense payment formula on psychologists’ services. 

Both changes would involve directly adjusting psychologists’ payments for indirect practice expenses. APAPO hopes to work with CMS to implement adjustments to the Medicare physician payment system to restore and expand beneficiaries’ access to psychological services.

APAPO will continue to advocate on both the regulatory and legislative fronts to gain necessary changes to the Medicare payment formula. Look for regular updates about Medicare payment in future issues of this PracticeUpdate e-newsletter.