For years, Alan Gruber, PhD, DSW, MD, a psychologist in Hingham, Mass., has been stuck between a rock and a hard place with Medicare billing. Most of his patients are older adults in nursing facilities or hospitals. Some have dementia; others occasionally exhibit destructive behavior. Gruber provides assessment services and behavioral management, especially for patients suffering from Alzheimer's disease who may be noncompliant with medication--services that fall under the definition of Evaluation and Management, according to the Centers for Medicare and Medicaid Services (CMS).

But since 1992, CMS--formerly the Health Care Financing Administration--has maintained that psychologists may not use evaluation and management codes when billing Medicare.

So, Gruber and hundreds of psychologists like him are barred from billing Medicare for the activities psychologists in health-care facilities routinely do: reviewing activity therapy reports, supervising nursing and ancillary personnel, leading or directing treatment teams, and monitoring behavioral effects of medications or providing medication recommendations.

On top of that, Gruber's local Medicare insurance carrier--National Heritage--won't reimburse him for providing psychotherapy services, claiming that dementia patients' cognitive deficits bar them from benefiting from such services. So, he can't bill for evaluation and management at all and he can't bill for psychotherapy with certain patients.

"If I have a patient who I have seen on an emergency basis because of risk of safety to self or others, and I want to go back and see that patient when there's no imminent emergency, I can't. I have no CPT code to see that patient," says Gruber.

"It's really a Catch-22," says Russ Newman, PhD, JD, APA's executive director for practice. "Some local Medicare carriers say dementia patients can't receive psychotherapy services, but psychologists can't code for the services that Medicare allows patients to receive--evaluation and management services."

The irony to Gruber and others is that he is not being reimbursed for services that, under Massachusetts law, he is licensed to provide. Indeed, says Newman, "There are a number of evaluation and management activities that are within a psychologist's licensed scope of practice."

Tired of submitting claims and having them denied by National Heritage, Gruber legally challenged Medicare about three years ago.

"He decided to pick up the gauntlet," says Newman. Although the APA Practice Organization and state psychological associations have made headway with local carriers about psychotherapy for patients with dementia, he says, Gruber's case goes further by legally challenging Medicare's blanket ban on psychologists billing for evaluation and management.

So far, Gruber has had five hearings on the case. Above and beyond a grant from APA for $10,000, the battle thus far has cost his practice about $50,000.

Last January, an administrative law judge decided there was no reason why Gruber hadn't been reimbursed. Judge James Packer issued a "Recommended Decision" to the Medicare Appeals Council advising that the services rendered by the clinical psychologists in Gruber's practice should be allowed to be billed as evaluation and management.

"Basically, the bottom line is, he said we were right," says Gruber.

Now, it's up to the Medicare Appeals Council to decide if it will hear Gruber's case. If it decides to uphold the judge's decision, it could signal a big win for psychologists. If not, Gruber says he'll keep trying. "If we lose, we're planning on going into federal court," he says.

"The battle's not over yet," adds Newman.