Florida psychologist has won a victory that may hearten practitioners across the country who have been waging battle for Medicare payments: After a two-and-a-half year struggle, a federal administrative law judge has agreed with practitioner Marie DiCowden, PhD, that the Florida Medicare carrier should pay her for providing cognitive rehabilitation services for brain-injured and neurologically impaired patients.

"Psychology owes Dr. DiCowden a debt for persevering in this fight," says Anthonio Puente, PhD, Medicare reimbursement specialist who testified for DiCowden. "The case shows not only that psychologists can sometimes win against the federal pressure on reimbursing for their services, but that the discipline can educate other people--in this instance, an administrative law judge--on what we do."

DiCowden is founder and executive director of Biscayne Institutes of Health and Living Inc. in Miami, which provides, among other services, cognitive retraining and psychotherapy. She says both she and the business faced bankruptcy in 1998 when Blue Cross Blue Shield of Florida (the "carrier" or administering agent for Medicare in that state) told her that its policy prohibited payment for many of her agency's services because they were medically unnecessary. In fact, Blue Cross said, she had to pay back more than $140,000.

Among other statements, the carrier said that cognitive training should be used only for a short time after an acute episode, that services should be reimbursed only if "drastic improvement occurred" and that the efficacy of traumatic brain rehabilitation has not been established.

For example, in one of the rejected claims, Biscayne Institutes had treated a 39-year-old multidrug user with a history of violent behavior, who had been brain injured in a motorcycle accident 16 years before, but never treated for the injuries, although his mental status had declined. After treatment at Biscayne, he increased his problem-solving abilities, had several drug-free tests and received help in controlling his impulsivity.

The carrier found that there is no Medicare provision for cognitive retraining on an ongoing basis. It also said DiCowden's services were not reimbursable because the focus of the group psychotherapy that the man attended was building social skills.

DiCowden says that these restrictions severely limited the scope of her practice, requiring her to "cut 50 percent of our staff with only one week's notice." She emphasizes with pride that the remaining staff continued to treat the full number of patients enrolled in the program.

Taking on the system

But, DiCowden says, "I don't die easily."

She immediately moved to take the carrier into the Medicare appeals process and got significant support in her contentions. First, she was lucky enough to find an attorney familiar with Medicare, Valerie Eastwood, JD, of Washington, D.C., who took the case pro bono because she believed in the cause.

In addition, as DiCowden's appeal was beginning, APA wrote to the carrier reminding it that a National Institutes of Health consensus statement on traumatic brain injury said that psychotherapy is "an important component of a comprehensive rehabilitation program," and that "rehabilitation should include cognitive and behavioral assessment and intervention."

And last year, during hearings on the case, both Puente and emergency medical physician William Benda, MD, said that--among other issues--the carrier's standard for "drastic improvement" in patient functioning is unreasonable.

"'Drastic improvement' is not a medical term that I have heard used by any of my colleagues in medicine in my entire career," said Benda. "By that criteria, a Medicare patient who undergoes surgery and dies on the table has not experienced drastic improvement....I believe this criteria was developed specifically to deny benefits to patients."

In addition, in what DiCowden terms "a nice turn of events," psychiatrist Richard Cohen, MD, who was called as an expert witness for Medicare, found that most of the services were medically necessary. After hearing that, Social Security Administration law judge Thomas W. Snook ruled that the carrier had been incorrect in denying coverage for the great majority of the services. His decision also noted that the carrier had never defined "drastic improvement" but that all the patients had made more than "subtle" or "slow" progress, as the carrier has required for payment.

In the example of the man injured in the motorcycle accident, Judge Snook said, "the evidence demonstrates a disturbed man who greatly benefited from his various treatments at Biscayne Institutes."

In late June, DiCowden was negotiating with the carrier to be reimbursed for services that her agency provided for free to its Medicare patients so that they could finish therapy, as well as a possible change in the "drastic improvement" standard.

An APA-championed code

Although administrative law cases do not set legal precedent, DiCowden's case was one test of a set of psychological services that the health-care system had recently recognized officially--a recognition APA has pushed hard for.

In the early 1990s, the APA Practice Directorate and the American Speech, Language and Hearing Association successfully worked to get a code for cognitive rehabilitation included in the American Medical Association's Current Procedural Terminology (CPT) manual, the basis for recognition of the health-care procedures in the United States. APA then pushed to have Medicare reimburse for the code. In 1995, Medicare announced that the code (CPT 97770) was a covered service.

But, as with much of Medicare payment, that is where it got complicated. Carriers in various states can set their own payment policies for different services. And in DiCowden's case, the Florida carrier established its controversial standard of "drastic improvement." There have also been indications of problems in other states with the CPT 97770, says Puente.

DiCowden also points out that with the current pressure on Medicare administrators to find cost savings, state carriers can be put in a competitive position of trying to ensure that they don't have higher costs on a particular code than other carriers. That kind of demand is why she sees her case as a parable for continuous vigilance on recognition and reimbursement for mental health services.

"We can get any number of good codes," she says, "but if the state carriers administratively strangle them, we will still not be able to give clients the services."