APA calls on CMS to revise auditing practices after notices alarm psychologists

By Janine Weisman
August 26th, 2019
American Psychological Association

Image courtesy of Wikipedia

The letters psychologists starting receiving last fall from a Medicare contractor stated they were for “educational purposes.” No reply was necessary.

But they alarmed many who provide mental health care for those aged 65 and over and people with disabilities enrolled in Medicare, the federally-funded health insurance program overseen by the Centers for Medicare and Medicaid Services (CMS)

Recipients were sent a comparative billing statement (CBR) comparing their Medicare billing and service patterns with the averages for psychologists regionally and nationally.

CMS calls a CBR an educational tool allowing a health care provider or supplier to compare their billing practices to their peers in the same state and across the nation.

“It’s a threat to someone’s financial liability for no clear reason and no real good reason.” --Jennifer Warkentin, Ph.D., director of professional affairs, Massachusetts Psychological Association.

The recipients were told they were providing more psychological services to Medicare beneficiaries than other mental health professionals.

The letter was clear that they were not the beginning of an audit, but the tone was very threatening, kind of saying, ‘You need to get in line with your peers or you’re going to be the target of an audit,’” said Jennifer Warkentin, Ph.D., director of professional affairs for the Massachusetts Psychological Association.

Warkentin’s clinical specialty is geriatrics but she said she has not received a letter. However, she has heard from a few MPA members who have.

There’s already a shortage of mental health providers willing to take Medicare, which pays less than the rates of higher tier commercial plans. An internal survey conducted two years ago by the American Psychological Association (APA) found that 26% of responding psychologist members who were once Medicare providers had left the program primarily because of low reimbursement rates. Half indicated they had left since 2008.

Now the risk of being audited — a troubling prospect for a solo practitioner who lacks the administrative and billing staff most physicians have to gather the relevant documentation — could drive more psychologists out of the program.

This is something that can take months,” Warkentin said of audits. “It’s a threat to someone’s financial liability for no clear reason and no real good reason.”

The letters cited a 2017 Medicare Fee-for-Service Supplemental Improper Payment Data report that found 16.6% for clinical psychologists were paid nearly $71 million for services billed that were later deemed medically unnecessary, inadequately documented, or not covered.

Improper Medicare Fee-For-Service payment rates among all six New England states were well below the national average of 8.3% in the federal fiscal year that ended Sept. 30, 2018, according to the annual U.S. Department of Health and Human Services Agency Financial Report. These rates ranged from a low of 1.9% in Vermont to 4.8% in Massachusetts.

The American Psychological Association is asking CMS to revise its auditing practices. In a May 13 letter to CMS Administrator Seema Verma, APA Chief of Professional Practice Jared L. Skillings, Ph.D., ABPP, said psychologists across the country who received CBR letters felt their billing practices were being unnecessarily compared to those of psychiatrists, even though psychologists and licensed clinical social workers are the ones providing the vast majority of psychotherapy services in Medicare.

Skillings drew attention to three areas of concern:

  • Psychologists felt they were being criticized for furnishing more 60-minute services under than their peers even as many patients require more than what can be accomplished in 45 minutes. The CBR data analysis did not take into account the condition of the patient and whether or not they were bedridden in a nursing facility or able to be treated in an outpatient setting.
  • Psychologists were upset they were being singled out for seeing patients more than once a month on an outpatient basis when more frequent visits helped avoid the need for hospitalization.
  • The data did not distinguish if patients received psychological or neuropsychological testing in addition to psychotherapy, which would result in higher average charges.

Skillings said one psychologist who was audited reported being asked for notes for 40 dates of service, “a task that took over eight hours to complete.”

When an audit involves a prepayment review, Skillings said, the process can withhold reimbursement until the completion of the audit, which could involve multiple targeted probes of different services for up to three rounds examining between 20 and 40 claims per round.

Wrote Skillings: “If contractors conducting audits benefit financially from withholding and/or reclaiming reimbursement, then what is their incentive to spend considerable time and resources examining each case?”

Skillings called for prepayment audits to be conducted only in cases where there was reason to believe that fraud or abuse occurred and that such probes be completed as soon as possible.

Additionally, claims data for psychological services should be reviewed by a psychologist and not another type of provider, and data analysis should take into consideration the size and nature of the practice, treatment modalities, patient condition and setting.

Finally, CMS contractors should be very clear about why a psychologist is under review and what documentation needed.

CMS released a statement in response to a request from New England Psychologist about APA’s concerns, saying that it is working to make necessary improvements to the Comparative Billing Report (CBR) program.

We appreciate the valuable feedback that the APA provided to us on this CBR,” the statement read. “Our goal is to ensure proper treatment for our beneficiaries, reduce provider burden, and foster a supportive relationship between CMS and providers. CMS does not draw any conclusions about medical necessity based on the data analyzed.”

APA has tried outreach to share concerns with individual CMS contractors, according to Director of Regulatory Affairs Diane M. Pedulla. She said CMS will only discuss details of audit cases with individual providers or their legal representatives.

We find it more effective to provide information about Medicare billing requirements directly to the psychologists to help them prepare responses when appealing denied claims or audit results,” Pedulla stated via email.

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