from Modern Healthcare.com
As part of year-end budget negotiations, Congress has temporarily blocked the scheduled 24% across-the-board Medicare provider payment cuts related to the Sustainable Growth Rate (SGR) formula, in order to give the House and Senate health committees more time to permanently repeal the flawed cost containment formula. The bipartisan budget deal, passed by the House on December 12th and the Senate today, averts the 24% cut until March 31st and replaces it with a modest 0.5% payment increase for Medicare services. President Obama is expected to sign the measure. APAPO has been meeting with and commenting on SGR proposals from the committees for several months, urging that the SGR formula be permanently repealed and responsibly replaced to help ensure appropriate reimbursement of psychologists’ services into the future.
Your voice was heard! Thank you for sending more than 6,200 letters urging Congress to block the SGR cut. With only a three-month reprieve we will again be calling on you to help us block the cut, if Congress does not repeal the SGR formula early in 2014.
More on the 2014 Fee Schedule
In a December 3rd information alert, we informed you that psychologists received the second largest increase in allowed charges in the entire Medicare program, with a combined increase across all billed services of approximately 8%.
This is a significant accomplishment given that large payment cuts for key mental health codes (see our November 8th information alert) were projected for 2014, and that this is the first year of increase after several years of decreases. Large losses were expected due to a significant anticipated lowering of the practice expense (overhead) associated with mental health services.
The following chart indicates the projected decreases and the actual changes:
|Code||Description||Projected change||Actual Change|
|90785||Interactive Complexity||No projection||
|90791||Psych. Diagnostic Evaluation||-24.2%||
30 min Psychotherapy
45 min Psychotherapy
60 min Psychotherapy
|90846||Family w/o patient||0.5%||
|90847||Family with patient||-1.9||
|90849||Multiple family group||0.0%||
How did psychology gain when such losses were projected? All Medicare services are valued relative to one another through two main components: work (cognitive effort and complexity) and practice expense (overhead). APAPO worked through the American Medical Association RVS Update Committee (RUC) process to get strong work values this year. We also have been meeting this year (as we have since 2007) with the Centers for Medicare and Medicaid Services (CMS) and with key members of Congress to discuss losses to mental health services’ payments in the program. With large projected losses this year, we believe that CMS was persuaded to raise psychologists’ services payments by recognizing the greater complexity involved in providing psychotherapy and assigning higher work values for the psychotherapy codes. These work values were then more heavily weighted relative to practice expense, and CMS apparently made adjustments to practice expense which lessened the impact of its reduced value.
Unfortunately, the psychiatric diagnostic evaluation code and several testing codes will have lower payments in 2014, due to adjustments in practice expense. For the diagnostic evaluation the deletion of clinical staff, an expense factor that had been carried over from previous psychotherapy codes from the 1990s, reduced the practice expense value so much that it erased the gains from the code’s higher work value. Payment for certain testing codes will be reduced because CMS reclassified some of their expense factors, changing them from direct to indirect practice expense in order to achieve greater consistency and relativity among all codes.
Congress has been attempting to contain Medicare provider payment increases for some time, as exemplified by the SGR formula. The Budget Control Act of 2011 now additionally requires automatic cuts in domestic and defense spending, known as “sequestration,” for several years and includes an across-the-board annual 2% cut for all Medicare provider services for 10 years. The first reduction occurred this year and an additional 2% cut will occur on January 1st. The budget deal this year extends this cut for two more years. APAPO, like other Medicare provider groups, are also fighting sequestration, which most in Congress recognize as unsustainable. However, sequestration is part of the larger partisan deadlock in Congress about how to deal with the federal government’s debt, and it is difficult to eliminate this Medicare cut. Nevertheless, with your help we will continue our efforts next year to end the SGR, eliminate the cut related to sequestration and to win better and more appropriate reimbursement for psychologists’ services in the program.