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Good news for Medicare providers

Good News for Medicare Providers

The Final Rule on the 2014 Medicare Physician Fee Schedule (the Final Rule) has good news for psychiatrists who provide care to Medicare beneficiaries.

When the new CPT coding went into effect in January 2013, the Centers for Medicare and Medicaid Services (CMS), which administers Medicare, declined to make a decision about the values recommended for the new codes by the AMA’s Relative Value Update Committee (the RUC). These values were based on surveys undertaken by the APA and the other mental health provider groups involved in the lengthy CPT code development process. In an unusual move, CMS said it would not finalize values for any of the codes until all ofthe new codes in the Psychiatry section of CPT had been surveyed (this included those codes that described new services, like the crisis codes, that had never been used before and which could not be surveyed until the codes were actually used in 2013). 

What this meant is that for 2013 the new coding largely failed to deliver on one of its goals—to increase payments to psychiatrists. The new format was established in large part to permit psychiatrists to be appropriately reimbursed for the evaluation and management (E/M) services they provide rather than having limited codes in the Psychiatry section to be used for all medication management (90862), no matter how complex the patient’s presentation, and for psychotherapy along with E/M services (90805, 90807, 90809), again, no matter how complex the E/M services required are.

With the publication of the 2014 Final Rule on November 27, CMS has announced that it has accepted the RUC recommendations for the new codes in the Psychiatry Section of CPT, and this is excellent news for psychiatrists since the APA’s representatives to the RUC, lead Dr. Ron Burd, Chair of the Committee on RBRVS, Codes, and Reimbursement, had worked long and hard on the crafting of those recommendations. The valuation of the codes has also corrected the anomaly in 2013  that had Medicare paying more for an initial evaluation without medical services (90791) than for the same evaluation with medical services (90792) has been corrected and the psychotherapy codes have been revalued to more accurately reflect the work required.

The Final Rule should mean that psychiatrists who see Medicare patients will be better reimbursed for their services next year.  Since most commercial payers base their reimbursements on the Medicare fee schedule this may also mean that psychiatrists will be receiving better reimbursements from commercial payers as well.  Unfortunately, judging from the way many commercial payers dealt with the CPT changes in 2013, in what appeared to be an attempt to maintain or minimize their reimbursements for psychiatric services, this is in no way a given for 2014.

There is one other caveat.  If you check your Medicare Administrative Contractor’s website for the 2014 fees right now, they will be much lower—about 24% lower than last year’s fees.  This is because of the SGR (Sustainable Growth Rate) law that Congress has overridden every year for over ten years now—and which Congress will most assuredly overrule for 2014 as well.  It should also be noted that serious work is underway to eliminate the SGR, and hopefully by next year we won’t have to wait for Congressional action to determine what the Medicare rates will actually be.

And, there’s one other piece of good news for Medicare providers beyond the new code values: 2014 marks the end of the outpatient mental health treatment limitation, which had psychiatric treatment reimbursed at a lower rate than other medical care.  Starting in January, psychiatric treatment will be reimbursed at 80%, which doesn’t change the Medicare fee but means that patients will have a smaller co-pay.

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