May 1st, 2012

Medicare cuts may spur withdrawals

Reimbursement for Medicare outpatient psychotherapy services was slashed 5 percent as a result of recent payroll tax legislation passed by Congress and signed into law by President Obama.

The Centers for Medicare and Medicaid Services cut Medicare psychotherapy payment rates in 2006, but since then, due to persistent pressure from the APA Practice Organization and grassroots psychologists, four laws successfully restored 5 percent of that payment. But the “Middle Class Tax Relief and Job Creation Act of 2012” effective March 1 did not include that provision.

Katherine C. Nordal, Ph.D., Executive Director for Professional Practice, American Psychological Association Practice organization, said these cuts impact funding not only for psychotherapy outpatient services, but community behavioral health centers, state hospitals and private hospitals with mental and behavioral health units.

“That unfortunately has a trickle-down effect in the sense that when reimbursement rates are cut, it means institutions have to come up with other ways of meeting their budgets,” Nordal said. “It could mean staff layoffs in very important programs. It could adversely impact psychology post-doctorate positions or psychology intern positions. There’s not any part of the psychology community that doesn’t see an impact when you see a rate cut in Medicare.”

Nordal said in addition to the economic impact to psychologists, the cut will negatively impact patient care and recovery if qualified, licensed mental and behavioral health providers leave the Medicare program.

“It could reduce the provider pool and could make access to care more difficult for people,” and that could disproportionally affect rural or suburban areas where the provider pool is not large to start with, she said.

A 2008 APA survey indicated that 11 percent of practicing psychologists reported they withdrew from their participation with Medicare, citing low reimbursement rates as a primary cause. The APA estimates that more than 3,000 psychologists who once participated have left the Medicare program.

Cheryl Pelletier, Ph.D., a clinical psychologist in Bangor, Maine, said she thinks more psychologists will leave Medicare as a result of the recent legislation.

“I have been struggling with this decision myself,” Pelletier said. She said approximately 20 percent of her patients are in the Medicare program. She said she polled a group of Maine psychologists about the percentage of their clients on Medicare and respondents said that 20 to 50 percent of their caseloads are Medicare clients.

Pelletier said that if psychologists continue to leave the Medicare program, she fears there will be a hole in treatment available to patients. “Our services are unique and proactive,” she said. “Our clinical work and the research we do provide important contributions to the progress of mental health treatment.”

For example, according to Pelletier, psychological and neuropsychological assessments provide specific information regarding diagnostic factors and recommendations for treatment. “We are able to tap into multiple aspects of cognitive functioning and diagnostic criteria leading to clear treatment plans; which are often connected to evidence based practice,” she said.

She said her elderly clients tend to present with multiple issues. “For example, an individual diagnosed with dementia may also have depression,” Pelletier said. “Many seniors are treated primarily with medication. Medication alone does not provide a robust outcome without some form of psychotherapy and behavior management. When medication is helpful, it provides added energy and optimism to do the psychological work. In my experience, without the psychological work, there is rarely significant change and life enhancement.”

Nordal indicated that reimbursement cuts and diminished access to care may push more people onto medication as a short-term or primary option, or they may end up in crisis resulting in more visits to Emergency Departments. “That lack of access to good quality outpatient care leads to leaning on those systems that are much more costly,” she said.

Prior to the legislation being passed, Federal Advocacy Coordinators for the APA Practice Organization prompted a grassroots effort that generated thousands of emails and letters to elected officials, and face-to-face meetings with them, about the importance of maintaining the increased psychotherapy payments.

“We were really proud of our grassroots network,” Nordal said. “It was a wonderful show of advocacy by our members. They made a big impression.”

In fact, advocates were assured that the restoration was in the bill, she said. “It literally came out at the very last minute.”

The new legislation does, through 2012, avert the Medicare Sustainable Growth Rate payment cut of 27.4 percent that was scheduled to take effect.

“I think that kind of rate cut really would be a tipping point for providers across the country, and I think Congress realizes that,” Nordal said.

Nordal said advocates are pushing for better solutions. “A good part of our effort now is going to be on the Sustainable Growth Rate,” she said. “That particular formula, that is used to help determine reimbursement rates for providers under Medicare, is something that has been a problem for a number of years, and it’s something that congress needs to deal with.

“We do have to find a way to control Medicare costs, but the balance is we need to do that and still be sure we have an adequate provider pool of qualified people that can perform services that Medicare beneficiaries need.”

By Pamela Berard

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