APA is alerting insurance commissioners in all the states that health insurance plans must honor medical evaluation and management (E/M) CPT codes used by psychiatrists.

In a February 24 letter, APA informed insurance commissioners that health plans that deny reimbursement for E/M codes used by psychiatrists are in violation of the federal parity law.

"Patients with psychiatric illnesses frequently require general medical evaluation and management of their disease," stated APA Medical Director James H. Scully Jr., M.D., in the letter. "However, many health plans have a standing clinical policy that limits psychiatrists to using the codes in the psychiatry section of the American Medical Association's Current Procedural Terminology (CPT), even when the services they provide represent work that is outside the descriptors of these codes. When general medical evaluation and management is provided, which is often the case, the appropriate way to bill for these medical services would be to use the codes in the Evaluation and Management (E/M) section of CPT, which are available for use by all physicians. It should be noted here that Medicare does not limit psychiatrists in this way."

Scully's letter stated that New York state had recently required insurers to honor use of medical evaluation and management codes by psychiatrists (Psychiatric News, February 4) following years of lobbying by the New York State Psychiatric Association. The decision in New York had been preceded by a similar decision by Blue Cross and Blue Shield of Massachusetts.

Following the New York decision, psychiatrists and staff in APA's Office of Healthcare Systems and Financing told Psychiatric News that the move marked an important change by recognizing that psychiatrists today provide services that are more varied and complex than those reflected in the psychotherapy with E/M codes (that is, 90805, 90807)—the only E/M codes that most insurers reimburse psychiatrists for using.

That point was reiterated in Scully's February letter to state insurance commissioners. But he also drew special attention to the fact that refusal to honor E/M codes submitted by psychiatrists is a violation of the federal parity law.

Irvin "Sam" Muszynski, J.D., director of APA's Office of Healthcare Systems and Financing, told Psychiatric News that the parity law requires equal treatment of medical and mental health services with regard to "nonquantifiable treatment limitations," which include policies related to reimbursement of different kinds of clinicians. If health plans honor E/M codes submitted by general medical and surgical physicians, they should do the same for psychiatrists, he said.

"The decision in New York state was derivative of state law there, but we believe that the federal parity law also applies" to E/M reimbursement issues for psychiatrists," Muszynski said.

In the letter Scully noted that the primary rationale given by health plans for denying E/M code reimbursement to psychiatrists is that the CPT psychiatry section (codes 90801-90899) includes codes with E/M.

"However, with the exception of the initial-examination codes and the code for pharmacologic management, the codes in the psychiatry section that include E/M only incorporate a very limited E/M component," Scully wrote. "The minimal nature of the E/M services represented in the codes for psychotherapy is evidenced by the minimal nature of the relative value units attached to these codes [for the evaluation and management service] … . The psychotherapy codes with E/M are intended for the delivery of psychotherapy, not for the general medical evaluation and management of the patient's psychiatric condition, which may often be what is medically necessary either instead of or in addition to psychotherapy."

The nonequivalency of the two sets of E/M codes means that denying psychiatrists the right to use the generic codes is a "nonquantifiable treatment limitation" and is thus a violation of the federal parity law.

"We would ask that you send a notice to the insurers in your state outlining their obligations under the parity act with respect to this issue, and if there is a state law in place similar to that of New York, we would ask that you include this information as well," Scully told the state commissioners.

He noted that APA was sending copies of the letter to appropriate federal regulators.

The APA letter to insurance commissioners is posted at <www.psych.org/Departments/HSF/Parity/Letter-to-State-Insurance-Commissioners.aspx>. Information related to the Wellstone-Domenici parity act and its implementation is posted at <www.psych.org/MainMenu/PsychiatricPractice/ManagingYourPractice/Mental-Health-Parity.aspx>.