Payment for Psychotherapy Dips

Medicare 2013 updates:

National Psychologist January/February 2013, Vol 22, 1, p 5.

Payment for psychotherapy dips despite AMA recommendations for higher rates

By Paula E. Hartman Stein, Ph.D.

The Relative Update Committee (RUC) of the American Medical Association (AMA) has recommended increases in reimbursement for 10 of 12 Current Procedural Terminology (CPT) codes for psychotherapy following a review of the work values for these services.

But, despite these recommendations to the Center for Medicare and Medicaid services (CMS), psychotherapists who are paid through Medicare will receive lower rates of pay in 2013.

In a recent phone interview, James Georgoulakis, Ph.D., the APA representative to the RUC said, “Psychologists will not see improvements in psychotherapy reimbursement in 2013. We must keep in mind there are economic factors impacting the entire Medicare system, but nobody is crucifying psychology. In fact, the AMA has jumped behind us with full force.”

According to Georgoulakis, through the RUC the AMA has said that mental health services are paid too low and is willing to take reimbursement from other services in order to boost mental health reimbursement. “The federal government has not yet accepted the revised work values of psychotherapy because all of the family of codes were not surveyed.”

A table in the Federal Register from Nov. 16, 2012, displays the recommended new work values for psychotherapy alongside the interim ones that will be used in 2013. Only the work value for group psychotherapy has not changed. A CPT code, 60 minute psychotherapy when performed in conjunction with an evaluation and management service, had a recommendation for a lower work value.

A statement accompanying the table said, “We note that related specialty societies have not yet surveyed some of the new CPT codes, namely, codes for psychotherapy for crisis, interactive complexity, and pharmacologic management. The AMA RUC and Health Care Professional Advisory Committee (HCPAC) have recommended contractor pricing for these services until the surveys are complete. After the specialty societies have completed the survey process for all the codes in the new code set, we intend to review the values for all codes in the family again.”

Georgoulakis said that the individual Medicare carriers will determine the rates of payment until the surveys are completed. Professional organizations can make a recommendation to the Medicare carriers but payment variability for the same codes can occur.

Another factor behind lower reimbursement in 2013 is a decrease in the practice expense, one of the variables in the Resource-Based Relative Value System (RBRVS) formula. The practice expense amount had been higher in past years due to the cost of nurses employed in some psychiatric practices.

According to Georgoulakis, the APA and other specialty societies must move forward quickly to survey the codes. “We have different options available in the survey process, such as convening an expert panel, but figuring out the process to use cannot be debated for months. Otherwise it will be 2015 before increases occur. They have to move.”

 CPT code update

                In 2013 the CPT committee adopted a pharmacology management code to be used when performed with psychotherapy services. In the final rule published in the same issue of the Federal Register, CMS determined this CPT code is invalid for all psychologists under the Medicare payment system.

Georgoulakis said, “CMS is clear that although psychologists may have prescribing privileges in some states, they are not accepting that for Medicare. The RUC and the AMA do not deal with scope of practice issues.”

The process of revising and adopting new codes by the CPT committee is part of the process to improve reimbursement for psychology. According to Georgoulakis, “Battles are fought in the CPT committee but the war is fought in the RUC committee. A code without a work value attached does not result in payment. We need a code to start but when we see a work value which results in meaningful reimbursement, that is the time to celebrate.”

 PQRS update

                In order to avoid 1.5 percent financial penalties in 2015 for not participating in the Physicians Quality Reporting System (PQRS) beginning in 2013, CMS has made the criteria less stringent than that required to receive a bonus payment.

According to another explanation in that issue of the Federal Register, pp 311-312, an eligible professional or group practice needs to report on one measure, or for individual eligible professionals only, one measures group, for at least one applicable patient in order to avoid financial penalty in 2015. However, the expectation of CMS is that eligible professionals will still try to qualify for the 0.5 percent financial incentive by reporting three or more appropriate quality measures on 50 percent of their eligible fee-for-service Medicare patients.

Based on examination of the PQRS government website, in 2013 a total of 203 individual quality measures are available. Approximately 13 are appropriate for psychologists based on the CPT codes eligible for use by psychologists and social workers who utilize the individual claims-based reporting system. Eligible professionals choose the quality measures based on the age and diagnoses of the patient population served. Examples of quality measures that do not require a diagnosis but are appropriate for widespread screening are tobacco use, unhealthy alcohol use, pain assessment or elder maltreatment.

An example is measure number 134, screening for clinical depression and follow up plan, which is appropriate for patients age 12 years and older. In the future other third party payers in addition to Medicare are expected to require pay-for-reporting as codes for pediatric use have been added to the measure.

Psychologists who conduct neuropsychological testing on at least 20 patients with dementia diagnoses in one year can use the dementia group reporting system in order to qualify for the 2013 financial incentive. On behalf of the Professional Affairs and Information Committee (PAIC) of the National Academy of Neuropsychology (NAN), Jonathan Woodhouse, Psy.D., has compiled detailed information on the dementia measures group available for NAN members on their website (

                Paula E. Hartman-Stein, Ph.D., is a clinical geropsychologist and former chair of the Psychology and Social Work Expert Work Group to develop quality measures for PQRS in 2007. She has published six previous articles in The National Psychologist on the topic, conducts workshops on PQRS and offers archived versions of her webinars. She may be contacted through her website: