Government News
 DOI: 10.1176/appi.pn.2013.11a13
APA Urges Payment Reform, Integrated Care for Public Programs
Psychiatric News
Volume 48 Number 21 page 1-1


Better integration of psychiatric and primary care can substantially offset costs associated with physician payment reform or other policy recommendations aimed at improving psychiatric care in public programs.

Abstract Teaser

Enhanced federal support for the Centers for Medicare and Medicaid Innovation and for new models of integrated care, better physician reimbursement in public-pay programs, reform of the current Medicare physician payment formula, and greater support for physician access to electronic health records.

Those are among a set of sweeping recommendations offered by APA in a September 17 letter to the Senate Finance Committee for improving the care of patients with psychiatric disorders (including substance abuse) in the Medicare and Medicaid programs. The letter, signed by then-APA Medical Director James H. Scully Jr., M.D., was in response to an August 1 letter from committee chair Max Baucus (D-Mont.) and ranking member Orrin Hatch (R-Utah) soliciting “input on how to improve the mental health system in the United States.”

“Mental illness is prevalent in the Medicare and Medicaid populations,” Scully wrote. “Approximately 25 percent of Medicare beneficiaries and approximately 10 percent of Medicaid enrollees live with a diagnosed psychiatric disorder. The rates of undiagnosed, untreated, or undertreated psychiatric and substance use disorders, as well as mental illness with a comorbid medical condition, are considerably higher and represent significant challenges for the Medicare and Medicaid populations, specifically in patients dually eligible for both programs. Approximately 50 percent of the dual-eligible population suffers from at least one psychiatric or cognitive disorder. Approximately 40 percent of the dual-eligible population suffers from mental and medical comorbidities.”

He added, “A vast majority of patients with serious and persistent mental illness belong to the dual-eligible population. Treating dual-eligible patients is costly and hampered by misaligned delivery systems under Medicare and Medicaid and decentralized reimbursement rates that are wholly inadequate to cover the costs of the services provided. With that said, Medicaid currently is the largest payer for mental health services in the United States, [accounting for] 27 percent of total expenditures and 60 percent of public expenditures.”

In the letter Scully outlined seven broad recommendations covering health delivery system reform, payment reform, education, electronic health records, and physician scope of practice:

  • Continued support of the Center for Medicare and Medicaid Innovation, which is playing a vital role in developing and testing new models of integrated care.

  • Repeal of the sustainable growth rate component of the Medicare physician payment formula, to be followed by a period of stability in which new payment models are tested.

  • Reintroduction and passage of the Behavioral Health Information Technology (HIT) Act in the 113th Congress, which would provide equal access to all physicians to acquire HIT for their practices and avoid “meaningful use” penalties.

  • Alignment of Medicare and Medicaid policies to eliminate disparities in service coverage and encourage robust cost-effective care, improved Medicare payments for inpatient psychiatric care in general hospitals and academic medical centers, and passage of S 755 and HR 1838, which amend the Affordable Care Act to reimburse psychiatrists at Medicare rates when they treat Medicaid patients.

  • Offering parity for inpatient services under Medicare. “Medicare’s inpatient psychiatric facility (IPF) payment system provides inadequate reimbursement for services provided in general hospital and academic medical center IPF units,” Scully wrote. “Consequently, APA recommends that Medicare payments for inpatient psychiatric care in general hospitals and academic medical centers be adjusted upwards.”

  • Preservation of graduate medical education and any legislative initiative, such as the Resident Physician Shortage Act, that seeks to study and mitigate the shortage of residents in specific specialties, such as psychiatry.

  • Preservation of Medicare’s definition of “physician” for payment purposes and rejection of legislative efforts to expand the definition to include clinical psychologists for payment purposes.

Regarding the last recommendation, Scully told the senators that APA supports “evidence-based initiatives specifically designed to strengthen the entire mental health service delivery system in rural areas and elsewhere, such as the Primary and Behavioral Health Integration Program managed by the Substance Abuse and Mental Health Services Administration, and the myriad of programs managed by the Office of Rural Health Policy in the Health Resources Services Administration.”

Scully also emphasized the emerging systems of integrated care and their potential for savings that can offset costs associated with some of APA’s recommendations. “[F]acilitating the integration of psychiatric and medical care has the potential for significant savings to Medicare and Medicaid,” he wrote.

He noted that APA’s Work Group on the Role of Psychiatry in Healthcare Reform commissioned a report to estimate the economic impact of integrated psychiatric and medical care for commercially insured, Medicare, and Medicaid populations. Scully said the report found that individuals with a treated psychiatric and/or substance use disorder typically cost two to three times more on average when accounting for their total medical costs than those without a behavioral condition in all market segments and that those with a treated psychiatric and/or substance use disorder constituted only 14 percent of the total insureds studied, but accounted for over 30 percent of total health spending. Moreover, the report found that individuals with a treated psychiatric and/or substance use disorder had a higher proportion of their total medical nonprescription dollars spent on facility-based services than on professional services.

“Costs for those with a psychiatric and/or substance use disorder always exceeded the costs for those without,” Scully said. “Based on its review of various integrated care studies, the report rendered conservative estimates of the projected savings of integration for persons with a treated psychiatric and/or substance use disorder. Medicare savings were estimated between $3 billion and $7 billion annually, and Medicaid savings were estimated between $7 billion and $10 billion annually.” ■

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