State Leadership Conference

Recent changes to Medicare mean good news for psychologists, said Diane Pedulla, JD, director of federal regulatory affairs in APA's Practice Directorate, at the 2004 State Leadership Conference. Instead of facing years of payment rate cuts as steep as 5 percent per year, psychologists and other health-care providers will see a 1.5 percent increase in Medicare payments for 2004, and at least a 1.5 percent increase in 2005.

More importantly, said Pedulla, Congress has changed the Medicare payment formula to make payment rates more stable from year to year. The rates are linked to the U.S. gross domestic product (GDP), and so, in the past, could rise or fall sharply from year to year based on the health of the economy. Now, Pedulla explained, rates will be linked to a 10-year rolling average of the GDP, so providers won't be hit as hard when the GDP is low.

Also in psychologists' favor, noted Pedulla, is the fact that Congress has directed the Centers for Medicare and Medicaid Services (CMS) to increase consistency in reimbursement policies among local Medicare carriers.

"Right now, there are some things that beneficiaries are entitled to in, say, Colorado, but not in Florida," Pedulla said.

She advised psychologists to comment on their carriers' draft local medical review policies (LMRPs) because those LMRPs could become models for the rest of the country. Particularly important, she said, are local carriers' decisions about the new health and behavior Current Procedural Terminology (CPT) codes. So far, only three carriers have issued LMRPs on the health and behavior codes: Empire, covering New York and New Jersey; HGS Administrators, covering Pennsylvania; and National Heritage Insurance Company, covering Maine, Massachusetts, New Hampshire and Vermont.

Coding for reimbursement

The codes, introduced in January 2002, allow health-care providers to bill for health and behavior assessment and intervention services that address physical health issues--like patient adherence to medical treatment, symptom management and adjustment to physical illness.

Medicare now reimburses for health and behavior codes in all states except Florida, Pedulla said, and private insurers are making slow but steady progress toward reimbursing for them as well. In March 2003, only one private insurer--Carefirst Blue Cross/Blue Shield--was known to be reimbursing psychologists for the codes. By March 2004, at least six more had joined Carefirst.

Though the progress is positive, panelists emphasized that psychologists should not take the codes for granted. James Georgoulakis, PhD, APA's representative to the American Medical Association's Relative Value Update Committee and Practice Expense Advisory Committee, explained that reimbursement rates could change. CMS has set the initial reimbursement rates for the codes, but it will review those values periodically.

In the meantime, it's important that psychologists use the codes whenever appropriate, said Randy Phelps, PhD, APA's deputy executive director for professional practice. If, relative to lesser-trained health professionals, psychologists seldom bill using these codes when treating Medicare patients with physical health problems, then the reimbursement values could drop at the next review.

Phelps said that the health and behavior codes affirm psychologists' expanding roles as health professionals who provide health services beyond traditional mental health care. "These codes represent a paradigm shift," he said. "Right now we're in the important implementation phase, and it's a 'use it or lose it' situation for psychology."