In Brief

As its last act before adjourning for 2006, Congress passed the Tax Relief and Health Care Act (H.R. 6111) on Dec. 9. The massive bill included a section eliminating the 5 percent sustainable growth rate (SGR) Medicare cut that would have been imposed on all Medicare providers beginning Jan. 1. The scheduled SGR cut resulted from a controversial automatic annual payment formula for Medicare services designed to contain program costs.

"Preventing the SGR cut is an important victory for psychology and the other provider groups that worked on the issue in the closing hours of the 109th Congress," says APA Executive Director for Professional Practice Russ Newman, PhD, JD.

In addition to halting the SGR payment cut, the Tax Relief and Health Care Act also allows for a 1.5 percent bonus-incentive payment for providers who voluntarily report quality measures in 2007. Psychologists are among the Medicare providers who will be eligible for these payments.

The bill language refers to a preexisting "physician reporting system" regarding quality measures that has not previously been applied to nonphysicians. Psychology leaders say it's unclear how the bonus payment will be implemented for psychologists. "We will need to closely monitor and work with the Centers for Medicare and Medicaid Services (CMS) as they implement this provision," says Newman.

Despite considerable effort, psychology was unable to gain inclusion in the legislation a provision to block the additional 9 percent Medicare payment cut for mental health services effective Jan. 1. This reduction is part of a federal regulation resulting from a "five-year review" of Medicare payment that CMS published in mid-2006. "We knew from the start that turning back the five-year review cut prior to Congress adjourning was an uphill battle," explains Newman.

As a result of its review, CMS scheduled an across-the-board cut for 2007 in one component (the work relative value unit) of Medicare reimbursement for all provider services in order to enable the federal agency to increase payment for evaluation and management (E&M) services. The E&M payment hike is intended to increase physician "face time" with patients.

By law, CMS must maintain budget neutrality in the Medicare program. So in order to increase reimbursement for E&M services, CMS is decreasing payment for other Medicare services.

"While it is of little comfort, all Medicare providers-not just psychologists-are facing these cuts to varying degrees," explains Doug Walter, JD, legislative counsel for the APA Practice Organization. Unfortunately, the effect may extend beyond Medicare. Walter says that because many commercial health plans follow Medicare's lead, payments for psychologists who don't treat Medicare patients could also be lowered.

Although the proposal for E&M payment increases originated with CMS, legislators are poised to take up the issue. "This gives us an opportunity to work with key members of the new Congress to advocate for either taking psychologists out of the E&M cut since we cannot currently use the E&M codes, or granting psychologists access to these codes," observes Dr. Newman.

Psychologists perform many E&M functions now, including establishing diagnosis and treatment options, analyzing tests and coordinating care. Yet CMS thus far has barred psychologists from receiving payment for E&M services. Its argument: Since psychologists cannot bill for each and every E&M code that exists, they should not bill for any of these codes.

Removing mental health-services providers-psychologists and social workers-from the five-year review cut of 9 percent would have a negligible effect on Medicare outlays, reducing by only $30 million the $4.5 billion that CMS must make up in budget neutrality dollars to allow for the E&M reimbursement increase.

According to Walter, the APA Practice Organization already has gained congressional support to stop the Medicare cuts that apply to mental health. "We've met with many members of key committees to assist us in this effort. We're building bipartisan support for 2007."

Grassroots activity also remains vital to the profession's advocacy efforts. Psychology advocates are emphasizing the adverse effect on Medicare patients if their access to mental health care is reduced because of steep cuts in payments for mental health services. From the summer of 2006 through November, psychologists sent approximately 20,000 emails to their members of Congress using the online Legislative Action Center at the APA Practice Organization Web site.

-The APA Practice Organization