Unfavorable Changes to Medicare Pay Loom for Psychiatrists

January 5, 2012

The response of psychiatrists to Medicare’s continued inhospitability to psychiatrists in 2012 is cautious.

Asim A. Shah, MD, Executive Director, Psychotherapy Services and Intensive Outpatient Program at Ben Taub General Hospital and Baylor College of Medicine in Houston, used to have 1 group psychotherapy session each day, although that number has declined of late. Typically, he schedules 8 patients per session. That is the Medicare limit. But even if all 8 patients show up, Medicare reimbursement is insufficient. Shah is paid approximately $40 per patient for CPT (current procedural terminology) Code 90853.

But that isn’t the end of the story. Usually fewer than 8 patients show up. If 4 do, instead of billing Medicare $320, he bills $160, and does the same amount of work as he would for 8. That isn’t just the 45 minutes for leading the group session. He has to spend up to 10 minutes per patient doing paperwork to support his billing for each. So for an hour and a half of his time leading a group psychotherapy session with 4 patients, Shah or his hospital may actually earn, if they are lucky, close to $100, and that is before he has to contribute to staff costs. “And did I mention the time I have to spend on pre-authorization with insurance companies and then calling some of them to give reports!” noted Shah.

But wait, there’s even more! In some instances, Shah must collect a copay from the Medicare patient who has not met his or her deductible. Only some of those copays are ever collected (maybe 70%, if Shah is lucky), and he may have to fork over 10% to a collection agency for whatever the collection agency can get.

Sounds bad, right? Well, it may get worse. Medicare believes 90853 and 2 other related group-therapy codes are over-valued. New, lower values in 2013 for those 3 codes based on recommendations in 2012 from the AMA’s Relative Value Update Committee (RUC) are likely to be established by the Centers for Medicare and Medicaid Services (CMS).

In fact, psychiatrists face a number of specific and general Medicare reimbursement challenges in 2012 with looming new policies that range from distasteful to disastrous. Some of these changes negatively affect payment for CPT codes billed expressly by psychiatrists. Others, such as the 27% across-the-board reduction in reimbursement in 2012, affect all physicians.

The scheduled 27.4% reduction in all Medicare fees is the result of the Medicare fee formula that uses what is called the sustainable growth rate (SGR) to measure increases or decreases in total physician billings year to year. SGR-inspired reimbursement reductions have been proposed each year since 2002, and then they have been cancelled, always at the last moment, by Congress. This will probably happen again in 2012. However, Democratic and Republican bickering over reducing the deficit may make a congressional agreement on eliminating the 27.4% drop more difficult and any solution runs the risk of being somewhat distasteful to physicians.

What is likely to have a big impact on psychiatrists in 2012 is the CMS review of “high volume” CPT codes-the relative values of many may end up being reduced. The “hit” list includes numerous psychiatric codes, such as the popular 90801, 90805, 90806, 90808, 90809, and 90862. The CMS, in its final rule for 2012 published in November 2011, said that codes on the list may be “mis-valued,” since they had not been reviewed for at least 6 and in some cases 10 years.

Payment for 90805, 07, 09 codes-which describe various time periods for in-office psychotherapy plus evaluation and management (E&M)-is already skeletal. Kristin A. Kassaw, MD, Director, Baylor College of Medicine Psychiatry Clinic, said Medicare pays her $94 when she bills 90807. Third-party private payers reimburse her approximately $130. “There is a built-in disincentive for me to do that therapy when Medicare will pay me about $50 for 90862, which is medication management lasting 20 minutes or less.” Of course, reimbursement for 90862 may be heading south because of the CMS “high volume” code review.

Not only is Medicare reviewing payment for old codes, it has rejected reimbursement for new codes that can be used by psychiatrists. Last year, the RUC’s Chronic Care Coordination Workgroup (C3W) recommended that CMS pay physicians for the first time in 2012 for 4 non–face-to-face codes. Art Traugott, MD, a psychiatrist at the Carle Physician Group, Champaign-Urbana, Ill, chairs the C3W. The idea was to come up with new codes for specialists who mimic the kind of work that primary care physicians do. Traugott explained that psychiatrists and other specialists, such as cardiologists and rheumatologists, as well as primary care physicians could have used the codes, for example, to bill for a telephone encounter with a patient who called with a new problem. “The description of the codes was tightly written,” he stated. But in its final rule on the 2012 fee schedule, Medicare declined to reimburse for those codes.

The refusal to pay psychiatrists and other specialists for primary care–like service is especially worrisome as Medicare begins to transition to a “value-based” reimbursement system that emphasizes global payment and care coordination. That reimbursement system will be based on self-reported physician results to the Physician Quality Reporting System (PQRS)-the base version is already in place.

Kassaw explained that her psychiatry department at Baylor is not currently reporting to PQRS. “I could only find 2 measures that apply to psychiatry,” she explained. “Number 106 measures screening of patients with major depressive disorder for active symptoms and 107 measures screening of the same group for suicide risk.”

The lack of psychiatrist-related measures in the PQRS is particularly worrisome because the Affordable Care Act requires Medicare to establish a Physician Compare Web site no later than 2013 on the basis of physician reporting to PQRS in 2012. The CMS will come up with other measures as well, such as an assessment of a physician’s performance with regard to patient health outcomes and functional status of patient as well as continuity and coordination of care and care transitions. Physician scores will eventually be used in a value-based payment system.

The response of psychiatrists to Medicare’s continued inhospitability to psychiatrists in 2012 is cautious. Kassaw explained, “I have patients who ask me, ‘Are you going to continue to take Medicare?’ I say, ‘As long as I can.’ I no longer make any promises.”