2011 Medicare Fees Are Mostly Uncertain

Nursing Home Physicians Could Get Fee Hike

LTC Codes Get Bigger Raise in New Schedule

Obama, Physicians Prepare for Health Reform

Fee Schedule Could Boost LTC Practice

‘Fiscal Cliff’ Deal Halts SGR Cut—For Awhile

The AAFP has been working with Congressional representatives and the other primary care physician associations for years in an attempt to fix the Medicare payment system for family physicians. The sustainable growth rate (SGR) system that is used currently to determine payments for Medicare

Are We Finally Ready for Medicare-Pay Reform?

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A Pay Change Too Close for Comfort

PROPONENTS OF THE PATIENT PROTECTION AND AFfordable Care Act (usually referred to as the Affordable Care Act), which aims to cover some 32 million uninsured individuals, would do well to ask whether physicians will care for these individuals once the act is implemented. Most physicians provide care for some uninsured or poorly insured patients, relying on payments from insured patients to cover the shortfall; private practice physicians are the main source of care for the uninsured and poor. But recently physicians have become less likely to provide such care “because their practices are being squeezed by steadily declining insurance reimbursement on the one hand and sharply rising operating costs on the other. These pressures make it increasingly difficult to see patients who cannot afford to pay—or, in the case of Medicaid, patients for whom payment rates are often inadequate.” The Affordable Care Act will not alleviate these pressures and may make them worse. The law includes provisions and decreases in payment that will undermine physicians’ ability to care for both the newly insured and patients who already have insurance. Under the act, it is estimated that half the currently uninsured individuals will be covered under Medicaid by expanding eligibility guidelines. The federal government has committed to cover the cost of these newly enrolled Medicaid patients for a specified period (100% of costs in 2014-2016; smaller amounts thereafter). However, states are already struggling under huge budget deficits resulting from their existing Medicaid programs. States’ costs will increase further on July 1, 2011, when federal stimulus aid disappears and each state’s share of Medicaid costs increases by one-fourth to one-third. Because states are required to maintain eligibility guidelines to keep federal funding, their only options for deficit reduction are cutting already low Medicaid reimbursements and limiting the breadth of coverage. In 2010, thirty-nine states decreased Medicaid payments to physicians, hospitals, and nursing homes, and many states are planning future reductions of as much as 10%. Expanded insurance coverage will succeed only if it offers adequate reimbursement rates to physicians to take on the newly insured patients. Physicians are already reluctant to accept Medicaid reimbursement, which is a fraction of what other insurances pay. Hospitals are having financial difficulties with current Medicaid reimbursements; lower rates and hospital closings are inevitable. Although the Affordable Care Act plans to increase Medicaid reimbursement rates for primary care physicians to Medicare rates for 2013-2014, that will be little help to patients in need of specialty care where rates will be cut and impending Medicare cuts will discourage many physicians from seeing these patients. More than half of the nearly trillion dollar price tag for expanding coverage under the Affordable Care Act will be paid by decreasing spending for the more than 46.3 million individuals covered by Medicare. The biggest decrease comes from reduced payments to clinicians and health care institutions. For example, the Affordable Care Act assumes that a planned 30% reduction in physician fees scheduled to occur under the Medicare sustainable growth rate (SGR) formula over the next 3 years will occur. Rather than fix a flawed SGR formula, Congress over the past 8 years has repeatedly delayed scheduled SGR decreases. Athough an SGR fix was in the original House bill (HR 3200), which organized medicine supported, the final Affordable Care Act that Congress passed left the SGR formula intact. In the latest deferral, Congress delayed for 1 year cuts scheduled for December 1, 2010, and for January 1, 2011, totaling 25%. Medicare reimbursement rate cuts of 29.5% are scheduled for January 1, 2012. These will affect elderly individuals and persons with disabilities covered under Medicare and military families whose TRICARE coverage is based on Medicare rates. In addition, starting in 2011, the Affordable Care Act plans lower payment rate updates to most categories of Medicare providers to reflect the increase in productivity experienced in the economy overall. Because medical services are labor-intensive, health care institutions and clinicians have been unable to improve their productivity to the same extent as the overall economy. The 2010 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds (the Medicare Trustees) anticipates that Medicare productivitybased payment-rate updates will increase 1.1% more slowly

Medicare Agency, Providers Face Challenges This Year

Physicians Offer Rx for Health Reform Act

Recently, the Centers for Medicaid and Medicare Services announced a scheduled cut in Medicare physician fees of 27.4% for 2012. This cut stems from the sustainable growth rate (SGR) formula used by the physician-payment system. Implemented in 1998 to curb the growth in expenditures on physicians' services, the SGR formula is used to determine annual adjustments to payments for those services. The SGR system sets a target for aggregate nationwide expenditures on the basis of growth in the per capita gross domestic product, growth in the number of Medicare Part B enrollees, changes in physicians' fees, and changes in laws . . .

WASHINGTON – The Sustainable Growth Rate is “flawed in many ways,” according to the Medicare Payment Advisory Commission, which called for alternatives in its semiannual report to Congress issued June 15.Reform of the Sustainable Growth Rate formula (SGR) is essential to fixing the American health care system, MedPAC Chairman Glenn M. Hackbarth said in a statement.It is not the first time that the commissioners have expressed their concern about the SGR as a threat to both physicians and patients. One idea that has garnered strong support from the commission is to overhaul the payment system by rewarding primary care physicians and encouraging a medical home model of care.MedPAC executive director Mark Miller said that the SGR proposals are just a small facet of MedPAC's goal to move Medicare away from its fee-for-service payment system. MedPAC commissioners have been discussing how to move Medicare toward more global payment models.The report can be viewed online at http://medpac.gov/documents/Jun11_EntireReport.pdf. WASHINGTON – The Sustainable Growth Rate is “flawed in many ways,” according to the Medicare Payment Advisory Commission, which called for alternatives in its semiannual report to Congress issued June 15. Reform of the Sustainable Growth Rate formula (SGR) is essential to fixing the American health care system, MedPAC Chairman Glenn M. Hackbarth said in a statement. It is not the first time that the commissioners have expressed their concern about the SGR as a threat to both physicians and patients. One idea that has garnered strong support from the commission is to overhaul the payment system by rewarding primary care physicians and encouraging a medical home model of care. MedPAC executive director Mark Miller said that the SGR proposals are just a small facet of MedPAC's goal to move Medicare away from its fee-for-service payment system. MedPAC commissioners have been discussing how to move Medicare toward more global payment models. The report can be viewed online at http://medpac.gov/documents/Jun11_EntireReport.pdf.

Back to table of contents Previous article Next article Full AccessGovernment Accepts Higher Work Values for Psychiatry CodesMark Moran, Mark Moran, Published Online:2 Jan 2014https://doi.org/10.1176/appi.pn.2014.1a13AbstractThe adoption of new values for psychiatry codes culminates a multiyear effort by APA and other groups to develop and revalue codes for psychiatry that better reflect the complexity of the patients psychiatrists treat.The work values for psychotherapy codes used by psychiatrists will increase significantly this year, resulting in a potential increase in Medicare payments for many psychiatrists. Because many private payers use the Medicare fee structure for reimbursement, the new work values will likely have positive implications for reimbursement of psychiatric services for privately insured patients. The federal Centers for Medicare and Medicaid Services (CMS) released a "final rule" for the Medicare Physician Fee Schedule for 2014 in which CMS accepted new values that will be applied to psychiatric codes in the complex formula used by the government to determine payment for services provided by physicians. (That formula includes values reflecting the complexity of work, practice expense, and malpractice expense adjusted for geographical variation. The total "relative value units," or RVUs, are then multiplied by a conversion factor that yields a dollar amount for every medical procedure or treatment.)Three-Month Delay Approved for Medicare Fee Cut Days before the end of the congressional session, the Senate approved a federal budget compromise that includes a three-month postponement of the 24.4 percent cut in physician Medicare reimbursement that was scheduled to take effect January 1. The House passed a similar three-month patch as part of its budget bill, and President Obama was expected to sign the legislation at press time.The huge payment cut stemmed from the sustainable growth rate (SGR) formula, which each year is used as a key part of the calculation to determine Medicare reimbursements. The size of the cut is in large measure a result of actions by Congress annually for at least a decade to postpone—not cancel—the fee cut mandated by the SGR, thus allowing its size to keep growing. Discussions have been under way in committees in both houses of Congress to find a permanent solution to the problems caused by the SGR formula.APA's summary of the final rule on the 2014 Medicare physician fee schedule is posted here.Even more than in past years, the fee schedule rule is a mixed bag of good and bad news for physicians, with the most important issue of the overall physician fee schedule and the fate of the sustainable growth rate (which impacts the conversion factor) still a moving target. A staggering 24 percent across-the-board payment cut was scheduled to go into effect on January 1, but a three-month reprieve was passed by Congress last month (see box below). In the meantime, there is legislation pending that would eliminate the SGR and implement a new "value-based" formula that rewards physicians for meeting quality standards.But while the larger issues of the overall payment formula are still up in the air, acceptance of the work values for psychiatric codes by CMS represents a major victory for psychiatry. It is the culmination of a multiyear effort by APA and other mental health groups working with the AMA's Relative Value Scale Update Committee (RUC) to create a new framework for psychiatric coding with values that better reflect the complexity of work involved in treating psychiatric patients. The CPT Editorial Panel implemented the new framework for psychiatric coding on January 1, 2013, but did not implement the RUC recommendations for the entire family of codes as a group until this year; it was unclear until the publication of the 2014 fee schedule whether the RUC recommendations would be accepted. Even though practice-expense values decreased, the work values for a large proportion of the codes in the new framework increased, and the net result is an increase in total relative value units for both nonfacility and facility settings (see table). In a statement accompanying the final rule this past November, CMS said, "The 2014 payment rates increase payments for many medical specialties with some of the greatest increases going to providers of mental health services including psychiatrists, clinical psychologists, and clinical social workers."Ronald Burd, M.D., chair of APA's Committee on RBRVS, Codes, and Reimbursements and APA's representative to the RUC, told Psychiatric News that the AMA and the RUC were highly supportive of APA's efforts throughout the multiyear effort. And he hailed the government's acceptance of the new work values as an example of APA's successful advocacy on behalf of members. Ronald Burd, M.D."CMS has adopted all of the RUC-recommended work values, which means that payment for those codes will go up," he said. "This is the best outcome we could have hoped for at this juncture. There are obviously many, many other items impacting payment. But next time someone asks what APA has done for them, I would point to this as a specific situation where the work of APA, our professional organization, has increased reimbursement for psychiatric care."The AMA, in its summary of the new code changes presented to the RUC, also noted the positive outcome for psychiatry. "CMS announced acceptance of all recommendations by the AMA/Specialty Society RVS Update Committee (RUC) for psychotherapy services, leading to $150 million in improved payments for these services each year," according to the AMA. "Depending upon the individual physician's mix of services, psychiatry, on average, will experience a 6 percent increase in Medicare payments. This results from a three-year effort by the CPT Editorial Panel, RUC, and organizations representing individuals providing mental health services to redefine and revalue these critical services."For a stable patient, a 30-minute outpatient visit that includes evaluation and management (E/M) services along with psychotherapy is now coded using 99212 and 90833. Formerly it was coded as a 90805 and had an RVU of 2.11 assigned to it. In 2014, the total value of the 99212 and 90833 codes is 3.07, an increase of 45 percent from 2012 to 2014.If the patient presents with a more complex problem requiring a higher-level E/M service the reimbursement would be even higher. The new values also rectify an anomaly that existed in 2013—namely, that "psychiatric diagnostic interview without medical services" (90791, a code used by nonmedical mental health professionals) was being reimbursed at a higher rate than the psychiatric diagnostic interview with medical services (90792).The new values reflect a decrease in values for 90791 and an increase in values for 90792. The accompanying chart shows work value increases for many of the most frequently used codes by psychiatrists with the total relative value units for those codes from 2013 and the new values for 2014. The columns show the total relative value units (RVUs) for both nonfacility (outpatient services) and facility (inpatient services) payments. The column on the far right shows the increase or decrease in RVUs as well as the percentage change. These RVUs are multiplied by a "conversion factor" that yields a fee to be paid for each service.Work on the new framework for psychiatric coding, to which the revised values will be applied, began more than three years ago. Psychiatrist Jeremy Musher, M.D., APA's advisor to the AMA's RUC and alternate advisor to the AMA editorial panel for the manual Current Procedural Terminology, explained in a 2012 interview with Psychiatric News that there were two persistent overarching concerns with the older framework—that codes used by psychiatrists consisted primarily of psychotherapy with evaluation and management (E/M) codes (for example, 90805, 90807), which had minimal work attributed to the E/M component, and that there was only one fixed low-level medication management code (90862). Musher said such a "one size fits all" approach doesn't accurately reflect the complexity of work done by clinicians with many of their patients. "What that has meant is that if a psychiatrist sees a patient in psychotherapy with medication management, regardless of how difficult the patient is from a medical standpoint, the psychiatrist gets paid only for a low level of E/M work," he said.Now, Musher said, under the new billing system, "this has all changed to more accurately reflect psychiatrists' work." ■More information about work values for psychotherapy codes is posted at http://www.psychiatry.org/practice/managing-a-practice/medicare/good-news-for-medicare-providers. ISSUES NewArchived