Congressional Spending Acts Mitigate Medicare Pay Cut, Fund Mental Health Priorities

President Biden in March signed into law two sets of congressional appropriations bills that will, in addition to keeping the government open, fund important mental health priorities for which APA had advocated.

On March 9, President Biden signed the Consolidated Appropriations Act, 2024 (HR 4366), to avert a partial government shutdown. The $460 billion spending package included a 1.68% reduction to the 3.4% cut to the Medicare Physician Fee Schedule conversion factor that took effect on January 1. (The conversion factor is an element in the equation that determines physician reimbursement for every payment code.)

The new payment rate went into effect that same day; it is not retroactive to January 1. APA continues to work for full repeal of the physician pay cut, which was automatically enacted to offset overall increases in Medicare payment.

The impact of the remaining overall payment reduction on individual psychiatrists depends on what kinds of services they provide. The fee schedule, released last November, did include some good news for psychiatrists—positive provisions included an increase in reimbursement for providing psychotherapy as an add-on to evaluation and management (E/M) services and the extension of some telepsychiatry provisions into 2024.

Other provisions in the March 9 appropriations act include the following:

• A requirement that the Department of Health and Human Services provide guidance to states on how they can improve behavioral and primary care integration, including via the Collaborative Care Model (CoCM).

• Indefinite extension of the requirement that state Medicaid plans cover the costs of medication treatment for substance use disorders.

• A provision that prohibits termination of Medicaid and CHIP (Children’s Health Insurance Program) coverage during incarceration.

• A provision making permanent the state Medicaid option to cover treatment at a residential or inpatient substance use disorder program with over 16 beds.

• An extension of the Geographic Practice Cost Index (GPCI) floor related to physician work through December 31. The GPCI accounts for differences in practice expenses among different regions of the country.

• An extension of funding for the National Health Service Corps and the Teaching Health Center Graduate Medical Education Program through December 31.

On March 23, Biden signed the Further Consolidated Appropriations Act, 2024 (HR 2882), setting fiscal 2024 spending levels for the remainder of the federal government. Importantly, HR 2882, totaling $1.2 trillion, included vital funding for the Department of Health and Human Services, the Department of Labor, and other federal agencies overseeing mental health and substance use disorder programs.

Multiple agencies implementing programs vital to psychiatrists and patients received essentially level funding, including the Substance Abuse and Mental Health Services Administration, which implements substance use disorder treatment programs created in 2018 under the Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act.

APA priorities were also funded through the National Institutes of Health, the Centers for Disease Control and Prevention, the Health Resources Services Administration, the Centers for Medicaid and Medicare Services, and the Employee Benefits and Services Administration within the Department of Labor, which oversees mental health parity.

In particular, these APA priorities were reflected in HR 2882:

• Level funding of $56 million—and an increase for technical assistance up to $3 million—to support uptake of CoCM.

• Extension of the Conrad 30 Waiver Program, which helps to address the health care workforce shortage in rural and underserved communities by granting waivers to international medical graduates of the two-year foreign residence requirement upon completion of the J-1 exchange visitor program.

• Funding for the Substance Use Disorder Treatment and Recovery (STAR) Loan Repayment Program. STAR provides up to $250,000 in loan repayment for substance use disorder professionals working in underserved communities or federally designated mental health professional shortage areas and is essential to help address the severe shortage of clinicians who treat individuals living with addiction in rural and underserved communities.

• Level funding for the Minority Fellowship Program, which supports the development of a diverse and culturally competent workforce.

• Increased funding for maternal mental health programs, including the Maternal Mental Health Hotline, grants for innovation, screening and treatment initiatives, and resources for state maternal morality review committees. ■