Bad news: Medicare to cut fees in 2002; economy blamed
By Paula E. Hartman-Stein, Ph.D.
Reimbursement for all Medicare services by psychologists and other healthcare providers will decline in 2002. In mid-December, Congress was still scrambling to limit the reductions—thereby minimizing the impact, but the prospects were doubtful, hampered by the nation’s economic slump.
The reductions range from 2 to 11% and vary by both region of the country as well as specific service codes. These overall reductions are predicated on the conversion factor that is tied to the gross domestic product (GDP), current enrollment in the traditional Medicare program, and spending due to new laws or regulations.
Practitioners who conduct psychological testing stand
to be impacted the most because of 10 to 11% reductions in testing codes in
most regions. This returns the fees to 1997 rates. This reduction is primarily
due to the lack of work values for these codes, part of the equation in the
Resource Based Relative Value Scale (RBRVS) formula. A survey to determine the
work value of testing services, currently being developed by Tony Puente,
Ph.D. from Wilmington, N.C., will be circulated among practitioners in 2002.
“We did relatively well regarding psychotherapy compared to
some medical services,” said James Georgoulakis, Ph.D., APA’s
representative to the American Medical Association’s Relative Update
Committee,. By comparison, evaluation and management codes experienced 15% fee
Georgoulakis reported that the
Centers for Medicare and Medicaid Services (CMS) are “under pressure to
ratchet down reimbursement rates.”
Reimbursement for the initial diagnostic interview had formerly been
capped at $153 on average reduced to $145 in 2002. A 50-minute out-patient
psychotherapy session averaged $101 with a cut to $96, and a 20 minute
psychotherapy session was reduced on average from $68 to $64.
Reducing therapy fees has the greatest effect on psychologists who
treat Medicaid patients, a large portion of the population in nursing home
settings. Medicare pays for 50% of psychotherapy fees rather than 80% that is
reimbursed for medical services. Some state Medicaid programs do not reimburse
the practitioner the remaining portion of the allowed Medicare fee. With
indigent clientele even a 5% reduction in fees can have a substantial negative
impact on service providers.
Psychologists’ reactions to the proposed cuts vary nut are generally
negative. Joseph Casciani, Ph.D.
from California voiced strong concerns. “This is unconscionable, and no
matter how unintended these changes were due to the intricacies of the RBRVS
formulas they will have a very adverse impact on all Medicare beneficiaries.
If implemented, these fee reductions will only add another barrier to working
in our specialty area.”
Sara Qualls, Ph.D. from Colorado Springs, CO who is the in-coming President of APA Division 12, Section II related her concerns to fears about the future status of geropsychology. “As an academic trainer as well as provider, I find the reimbursement decrease very discouraging. How are we to attract top people to the field when the primary insurance carrier both lowers reimbursement from a below-market value to a farther-below market value?”
Upon learning of the possible fee cuts, some practitioners are glad
they took their accountants’ advice to diversify their professional work.
Michael Salamon, Ph.D. from Hewlett, NY noted that his center started
providing behavioral healthcare to all age groups for the last five years. “Even
though we built diversification in, we are still struggling,” he observed.
“The new Medicare decrease just makes it that much more difficult.”
Similarly, Margaret Norris,
Ph.D. from College Station, TX does not plan on giving up on working with
older adults. “My professional identity with and commitment to
geropsychology is too strong to surrender my specialization over completely,
but I am already starting to plan ways in which I might increase the
proportion of non-Medicare patients in order to partially compensate for this
possible fee cut,” she said.
Karl Knobler, Ph.D. from Berkeley, CA expressed concern that “social
policy is created such that senior citizens and their emotional lives are
being marginalized by decisions. It
shows that the government is not interested in valuing them—because it doesn’t
value the people who do the work. We are like teachers, venerated, but not
Meanwhile, the Medicare Physician Payment Fairness Act of 2001 has been
introduced by Senators Jim Jeffords (I-Vt.) and John Breaux (D-La), S.1707.
It would lower the 2002 cuts to .9% and similar legislation is pending
in the House Energy and Commerce Committee. It would also require the Medicare
Payment Advisory Commission which advises
Congress on Medicare issues to suggest ways to modify or replace the formula
in time for the 2003 update.
Hartman-Stein, Ph.D. is a clinical psychologist and consultant specializing in
assessment and therapy with older adults in Kent, OH. She teaches online
courses in geropsychology for the Fielding Institute in Santa Barbara. Her
website is www.centerforhealthyaging.com.