Primary Care Bonus Could Give Psychiatrists Boost

September 7, 2009
Stephen Barlas

Volume 26, Issue 9

The congressional drive to reform health care could result in a 5% Medicare bonus for psychiatrists because of a provision in a prospective bill that would also have an impact on private insurance payment. As the House and Senate struggle to turn concepts into legislative language, one thing Democrats and Republicans agree on is that primary care physicians should be better compensated, probably with money taken out of the pockets of some specialties.

The congressional drive to reform health care could result in a 5% Medicare bonus for psychiatrists because of a provision in a prospective bill that would also have an impact on private insurance payment. As the House and Senate struggle to turn concepts into legislative language, one thing Democrats and Republicans agree on is that primary care physicians should be better compensated, probably with money taken out of the pockets of some specialties.

Draft language from the Senate Finance Committee defines “primary care” in a way that seems to include psychiatrists. The Senate Finance Committee is considered the most likely to put together an affordable, bipartisan plan that would pass Congress and be signed by President Obama. Primary care physicians provide “at least 60% of their services in specified ambulatory settings.” This seems to favor physicians who are heavily office-visit oriented, such as psychiatrists. The only caveat is whether the bill itself, or some government body, would further define the word “specified,” which could make it either more or less likely that psychiatrists would fit within the ambulatory designation.

The 5% bonus would only be paid, however, on certain current procedural terminology (CPT) codes, including office visit codes 99201-99215, nursing home visit codes 99304-99340, and home visit codes 99341-99350. The bonus would apply to services furnished to both established and new patients. Key evaluation and management (E/M) codes for psychiatrists are the 99203-99205 series for new, outpatient office visits, according to Becky Yowell, deputy director, Office of Healthcare Systems and Financing of the American Psychiatric Association (APA).

In addition to tilting the Medicare payment field toward primary care, Congress is likely to endorse payment incentives steered toward what are called Accountable Care Organizations (ACOs). ACOs have become something of a watchword in the health care reform debate. The term implies a large group of physicians, both primary care and specialists, who band together to ensure that patients get coordinated care and who report results to some central body and practice according to evidence-based standards. ACOs who meet the organizational requirements in the bill would get some percentage of the savings Medicare would ostensibly reap.

Primary care bonuses and ACO incentive payments would be, in effect, add-ons to the base Medicare fee formula, which is based on a sustainable growth rate (SGR), a complicated formula used by Medicare and authorized by Congress. It determines whether the update (a percentage) to the conversion factor is positive or negative and by how much. The conversion factor is a dollar amount multiplied against the value of the relative value of each CPT code to get the Medicare payment for that service. The SGR depends heavily on volume of services, and because physicians increase volume every year, the SGR has been yielding progressively draconian conversion factor negatives. Congress has set aside the SGR formula for the past few years to prevent negative updates. But that action has just skewed the SGR equation more heavily against physicians, so much so that if left untouched it will yield a 21% reduction in Medicare physician fees beginning January 1, 2010, and additional reductions of roughly 6% annually for at least several years thereafter. The Senate Finance Committee has some proposals that would reform the SGR. There is also a possibility that Congress will allow the Medicare Payment Advisory Committee (MedPAC) to determine the update, which will entirely do away with the SGR.