Government News
APA Tells Congress: End Medicare's Higher Copay for MH Treatment
Psychiatric News
Volume 42 Number 9 page 1-25

The first step Congress should take to improve senior citizens' access to mental health care is to lower the Medicare copayment for outpatient psychiatric care to the level patients pay for non-mental health office visits, according to a former APA president.

Steven Sharfstein, M.D., immediate past president of APA, testified before the House Ways and Means Subcommittee on Health in March that the 50 percent copayment required for visits to psychiatrists or other physicians for mental health care is discriminatory and a barrier to care for a chronically undertreated group. Visits for other types of care require only a 20 percent copayment from the patient.

"There is simply no excuse for maintaining a discriminatory barrier to mental health care for America's seniors and disabled people, particularly since these populations have a disproportionately high incidence of mental health concerns," Sharfstein said.

Among the statistics that indicate the need for increased access to mental health care among seniors is a 1999 surgeon general's report that found 1 in 5 seniors experiences mental disorders that are distinct from cognitive changes associated with aging. People over age 65 also have been found to have one of the highest suicide rates, accounting for 20 percent of suicide deaths in the United States, while representing only 13 percent of the population.

"I believe that it is of critical importance that we advance mental health parity within the Medicare system," Sharfstein said.

Sharfstein's testimony during a hearing on a variety of mental health parity issues came as several members of Congress introduced legislation that would eliminate the Medicare copayment disparity. Among the highest-profile bills is HR 1663, sponsored by Rep. Pete Stark (D-Calif.), who is well positioned to advance it as chair of the Subcommittee on Health. Among the range of additional mental health policy changes in the Stark bill are provisions to improve Medicare beneficiaries' access to mental health services provided by community-based residential and intensive outpatient mental health programs and to eliminate the 190-day lifetime cap on inpatient services in psychiatric hospitals.

"Because of these limitations, Medicare spending in mental health is skewed toward costly hospital services," Stark said, during the March hearing. "In 2001, 56 percent of mental health spending in Medicare went to inpatient care, which was over twice the national average of 24 percent. Conversely, the percentage of Medicare spending for cost-effective outpatient care is far below the national trend."


Stark has introduced legislation in every Congress since 1995 that would provide some form of mental health and substance abuse parity in Medicare for inpatient and outpatient services. Although he has not yet scheduled a vote on the legislation, he describes it as a priority and said he was committed to it in a recent newsletter to his constituents.

Another recently introduced bill (HR 1571), sponsored by Rep. Tim Murphy (R-Pa.), is focused on eliminating the differing Medicare copayment between mental health and other types of care. The bill would gradually lower the mental health outpatient copayment from 50 percent to 20 percent by 2013.

"Seniors who receive necessary mental health services" don't run up huge bills for hospital care, Murphy said, during comments on the House floor. For example, he said, "One hospital offered mental health services for elderly patients with fractures, and reduced the length of stay by two days and hospital costs by over $160,000."


APA has long highlighted the need among Medicare beneficiaries increased access to mental health care. In addition to urging its members to register their support for bills such as Murphy's, APA has helped craft legislation in previous congressional sessions by Sens. Olympia Snowe (R-Maine) and John Kerry (D-Mass.) to eliminate the copayment disparity (Psychiatric News, July 1, 2005).

Recent research continues to support the need for such legislation, including a 2006 George Washington University report that found 59 percent of disabled Medicare beneficiaries had a mental illness, and 37 percent had a mental illness classified as serious.

The 50 percent coinsurance requirement also is unfair to the nonelderly disabled Medicare population, according to its critics, because many Medicare beneficiaries have severe mental illness along with low incomes and high medical expenses. A 50 percent coinsurance requirement can create a serious burden among these low-income beneficiaries.

The higher copayment for outpatient psychiatric services has long been a feature of Medicare, and many efforts have tried unsuccessfully to lower it. The latest effort faces concerns over its potential costs, which come as Congress already is considering costly changes to Medicare. Another Medicare change APA supports would replace the physician reimbursement formula, which has scheduled steep cuts in coming years to control the program's increasing costs.

Ronald Manderscheid, Ph.D., the former chief of Mental Health Statistics and Informatics at the National Institute of Mental Health and the Substance Abuse and Mental Health Services Administration (SAMHSA), testified before the health subcommittee that he estimated Medicare's costs would increase" only slightly as a result of the proposed change." Once the higher cost for outpatient psychiatric care was lowered, he said, inpatient mental health care would decrease as outpatient care increased.

"Further, because many Medicare mental health service recipients are dual eligible for Medicaid, a change in Medicare is likely to have a salutary effect on Medicaid costs," he pointed out.

That a lowered copayment may result in other cost savings was echoed by other advocates for the change. David Shern, Ph.D., president and CEO of Mental Health America, testified that the limits on outpatient care in Medicare have resulted in much higher utilization of expensive inpatient care among Medicare beneficiaries than other populations.

A 2002 SAMHSA analysis found, for example, that Medicare beneficiaries were much more likely than Medicaid beneficiaries to receive inpatient mental health and substance abuse care, if they receive any such services at all, and that Medicare beneficiaries were less likely than Medicaid beneficiaries to receive mental health and substance abuse treatment in ambulatory outpatient facilities. When Medicare beneficiaries do receive inpatient care, according to the report, the care is more intensive, presumably because these individuals have not been able to access adequate outpatient care.

"Access to treatment through the Medicare program has long been restricted by outdated and discriminatory policies," Shern said.

Stark echoed the cost justification for a end to the discriminatory Medicare copayment by noting that Medicare mental health expenses have historically been heavily skewed toward more expensive inpatient services, with 56 percent of the program's mental health spending going to inpatient care and only 30 percent to outpatient services in 2001.

"This relationship is in contrast to national trends showing a reversal in inpatient and outpatient spending over the past decade," Stark said. Over the last 10 years, inpatient spending has declined from 40 percent to 24 percent, and outpatient spending has increased from 36 percent to 50 percent of all mental health spending, he noted.

Stark's bill (HR 1663) and Murphy's bill (HR 1571) can be accessed at <http://thomas.loc.gov> by searching on the bill number.

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