Reimbursement delays, denials prompt outcry

By Catherine Robertson Souter
March 1st, 2013

For many mental health practitioners, January was a stressful month because of delays and denials of reimbursements from some insurance providers. The American Psychological Association was inundated with calls and emails asking about the issue and saw more than 300,000 hits for its CPT page over a one-month period.

While Current Procedural Terminology (CPT) codes are updated every year by the American Medical Association (AMA), the codes, which describe procedures and services by practitioners, had not been updated for psychotherapy services in more than 20 years. Drastic changes, on top of late notification of the new codes and rates, caused a severe backup of reimbursements.

“Part of the problem was that the new codes did not come out until mid-November,” says Elena Eisman, Ed.D., executive director of the Massachusetts Psychological Association, “and the final values for those codes didn’t come out until January.”

The delay in the rates were due, in part, says Randy Phelps, Ph.D., deputy director for the APA’s professional practice division, to the budget battles going on at the federal level.

“One factor underlying such difficulties may have been the Sustainable Growth Rate payment cut in Medicare rates of 26.5 percent that had been scheduled to take effect on January 1,” says Phelps, “The drastic cut was averted for 2013 when Congress passed the ‘fiscal cliff’ legislation.”

With so many changes in a short period of time, the result was a delay in insurers getting computers reprogrammed with the new codes.

“There were also changes in methodology,” says Eisman, “so all the factors created a ‘perfect storm’ of changes.”

The good news is that America’s Health Insurance Plans (AHIP), the national trade association for health insurance providers, did report some issues but is hearing that most of its member companies are up and running by now.

“The information needed for the health plans to implement the changes wasn’t available and that set the stage for delays,” says Susan Pisano, vice president for communications for AHIP, “but my sense from the companies I have spoken with is that they have resolved any delays occurring as a result of the changes in the CPT codes.”

Cigna reports that it is on track with payments to mental health care professionals, according to Mark Slitt of the public relations department.

The code changes included a removal of evaluation and management (E/M) plus psychotherapy combination codes from the psychiatry section, deletion of the code for pharmacologic management and the addition of a code for interactive complexity. The update also features new codes and time intervals for psychotherapy and a new code for a patient in crisis.

The changes caused confusion even when codes were input into the system, apparently.

“When Medicare adopted the new codes in 2013 for certain psychiatric services, some Medicare claims administration contractors mistakenly continued certain pre-payment edits that were used for the old 2012 codes, and incorrectly denied some of the 2013 claims,” says Kathryn Ceja, from the CMS Office of Communications. “As soon as CMS became aware of the problem, we immediately took steps to fix it.”

The delays in payment have caught many practitioners off guard. While the APA and state associations have been advising members that the changes were coming, not all psychologists are members and no one expected this much confusion over the new codes.

“I had no clue and I’ve been talking to colleagues who were equally mystified [about the delays or denials of claims],” says Beth Warner, Ed.D., who practices in Nantucket.

For smaller practitioners, the burden of paying rent or mortgages, plus staff and operating expenses could cause serious problems if funds are not received quickly. For others, the aggravation of dealing with insurance companies has begun to prove too time-consuming.

“Last summer I spent hours on the telephone for a different reason, frustrated, asking why claims were being rejected,” says Warner. “Now, not getting any response to my claims, my solution is to leave the panels.”

In some cases, the delay in payment came on top of previous reductions in rates. According to Milton Marasch, Ph.D., the insurance chair for the Vermont Psychological Association, one insurer dropped rates from $1 up to $92 for certain coded services. Even for the relatively low drops of a few dollars, the reductions add up.

“Or ‘subtract down,’” he says. “It is certainly difficult when the rates go down and there is no cost of living increase.”

Warner figured that her reimbursement rates have gone down 15 percent over the last several years. She offered to stay on the panels if her rates could be restored to where they were five years ago, but has not heard any response.

Leaving insurance panels and moving to private pay practice may be the wave of the future, says Ellie Dan, Ph.D., of Brookline, Mass.

“A lot of my colleagues have bailed on the insurance companies and are just doing private pay,” she says.

Especially in rural areas, fewer practitioners on insurance panels could result in less access for mental health care for the poor.

“I’m hanging on because I want to try to make treatment affordable for people,” says Dan. “But rather than my income going up a little every year, mine is going down. My expenses go up, but not the income.”

2 Responses to Reimbursement delays, denials prompt outcry

  • August 3rd, 2013 at 10:12 am Lorraine McDermott posted:

    When recredentialing for a large insurance company two weeks ago, I asked to see the reimbursement schedule and learned the allowed fee for a one 45-50 minute therapy session I would received $63 (a decrease of $13) which is two dollars less than I received thirty years ago. this is less than half of what many psychologists receive for private sessions. As rents and other business costs increase, there is no way psychologists can cover expense at this rate. Even Medicare reimbursement decreased.
    I think the result of these decreases will mean a large reduction of experienced psychologists on insurance company panels as well as many complaints from many patients who cannot find a psychologist in his/ her area. I’m not sure this will shake up insurance companies enough to make changes because their consequence for lowering service rates is a decrease in patient claims. A lawsuit along with widespread media coverage might be the only remedy.

  • January 6th, 2014 at 12:20 am Jill posted:

    My Medicare claims are still being denied. I appeal them all and am s l o w l y being “reimbursed” — if that is what you can call their ridiculous determination of reimbursement. It is January 2014. I am still waiting for May 2013-Oct 2013 appeals to be decided. Every single claim I submit is denied. Every appeal (so far) has been accepted. Calling Medicare — this is the only advice I have received — is a waste of time. I speak with individuals who tell me sarcastically that the service is not covered and/or that I have submitted the incorrect CPT code. I ask what, then, is the correct code that they have listed and they of course have no idea. This is madness. Literally. Is no one filing law suits? I find absolutely nothing from online searches. What is going on? Why isn’t this issue making headlines? I don’t understand. Is there nothing to be done?

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