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January 15, 1999
In contrast to years when there was little to smile about on the Medicare front, in 1999 psychiatrists will benefit from modest increases in the Medicare fee schedule for some of the psychiatric codes they use most often.
On a national average, psychiatrists will see increases ranging from $3.75 for CPT code 90807-45 to 50 minutes of psychotherapy along with evaluation and management (E&M)-to $9.73 for 90802, which is the code for an interactive psychiatric diagnostic interview.
All of the 1999 fee schedule components are subject to geographic adjustments, so the Medicare reimbursements many psychiatrists receive from the Health Care Financing Administration (HCFA) will not be identical to the published national fee levels.
Psychiatry fared better than many other specialties, especially in light of the fact that HCFA lowered the 1999 conversion factor, the practice expense values, and some of the psychotherapy work values that APA had proposed. These are among the components that the government uses to calculate the final fees for every Medicare-reimbursed service.
A few codes, such as 90805, a 20- to 30-minute office visit with E&M, and 90817, a hospital visit of 20 to 30 minutes with E&M, will have reduced payments for 1999.
The biggest factor in HCFA's fee-setting process for 1999 was its reduction of the conversion factor by $1.96, noted Shelley Stewart, deputy director for federal relations in APA's Division of Government Relations. The agency multiplies every CPT code's relative value by this dollar amount, which includes calculations for practice expenses, malpractice expenses, and physician work values. The conversion factor reduction was not based on HCFA's perception of the value of a particular service, but was made necessary by federal law requiring budget neutrality. Thus, higher than expected billings from physicians and other providers must be offset by cuts elsewhere in the Medicare budget.
Work values were also slightly reduced to compensate for the unprecedented number of claims submitted by psychiatrists in 1997. Thus, for the base used in 1999, "there was less of the pie to go around," Stewart explained. Psychotherapy work values were subjected to an across-the-board reduction of 6.7 percent to maintain budget neutrality in the face of the unexpectedly large number of psychotherapy claims psychiatrists submitted to HCFA.
To ensure that work values assigned to all psychotherapy codes reflected the time and effort psychiatrists and other therapists actually expend on this treatment modality, APA worked in concert with the American Academy of Child and Adolescent Psychiatry, American Psychological Association, National Association of Social Workers, and American Nurses Association from 1997 into early 1998 to conduct a survey of work values assigned to psychotherapy CPT codes. The survey was required by the American Medical Association's Relative-Value Update Committee (RUC) since 24 new codes for psychotherapy were being introduced to the system, and the time and effort required to conduct the different coded services had to be assessed. The survey's findings resulted in increases in the work associated with most of the psychotherapy codes. (Only APA and the American Nurses Association collaborated on codes that involve E&M services.)
The survey findings were forwarded to the RUC, which supported the increases. That committee sent a favorable recommendation on to HCFA, which accepted the methodology the committee used, but nonetheless imposed the 6.7 percent reduction to keep payments for psychotherapy codes budget neutral. APA is continuing to work to educate HCFA policymakers about the methodology used to arrive at recommendations to increase psychotherapy work values, Stewart pointed out, and to convince them to increase psychiatry's overall payments in relation to the rest of medicine. Stewart also noted that HCFA's calculations for psychiatry's practice expenses are based on faulty data and on underestimations of physician work, which would also result in diminished payments.
These comments were incorporated into APA's response to the 1999 Medicare fee schedule, which it submitted to HCFA earlier this month.
APA emphasized in particular that it believes there are several faults with the practice expense portion of the fee schedule. APA explained to HCFA, for example, that "the times assigned to the psychotherapy codes with E&M services are equal to and, in some cases, less than the psychotherapy codes without E&M services. Clearly, this is incorrect since the provision of E&M services in addition to psychotherapy itself always requires more time. Although the errors appear to be small," APA noted, "we believe they have had a significant effect on the size of the pool since they are high-volume services."
APA also pointed out that the AMA agrees with this position. APA wants HCFA to increase the time assigned to psychotherapy plus E&M services by seven minutes over a corresponding psychotherapy code without E&M.
"We are extremely troubled by HCFA's failure to correct problems in the final rule," APA said. Also, "to defer resolution [of these problems] to a refinement process only vaguely described in the regulation's preamble is unacceptable."