The work values for psychotherapy codes used by psychiatrists will increase significantly this year, resulting in a potential increase in Medicare payments for many psychiatrists.
Because many private payers use the Medicare fee structure for reimbursement, the new work values will likely have positive implications for reimbursement of psychiatric services for privately insured patients.
The federal Centers for Medicare and Medicaid Services (CMS) released a “final rule” for the Medicare Physician Fee Schedule for 2014 in which CMS accepted new values that will be applied to psychiatric codes in the complex formula used by the government to determine payment for services provided by physicians. (That formula includes values reflecting the complexity of work, practice expense, and malpractice expense adjusted for geographical variation. The total “relative value units,” or RVUs, are then multiplied by a conversion factor that yields a dollar amount for every medical procedure or treatment.)
Even more than in past years, the fee schedule rule is a mixed bag of good and bad news for physicians, with the most important issue of the overall physician fee schedule and the fate of the sustainable growth rate (which impacts the conversion factor) still a moving target. A staggering 24 percent across-the-board payment cut was scheduled to go into effect on January 1, but a three-month reprieve was passed by Congress last month (see box below). In the meantime, there is legislation pending that would eliminate the SGR and implement a new “value-based” formula that rewards physicians for meeting quality standards.
But while the larger issues of the overall payment formula are still up in the air, acceptance of the work values for psychiatric codes by CMS represents a major victory for psychiatry. It is the culmination of a multiyear effort by APA and other mental health groups working with the AMA’s Relative Value Scale Update Committee (RUC) to create a new framework for psychiatric coding with values that better reflect the complexity of work involved in treating psychiatric patients.
The CPT Editorial Panel implemented the new framework for psychiatric coding on January 1, 2013, but did not implement the RUC recommendations for the entire family of codes as a group until this year; it was unclear until the publication of the 2014 fee schedule whether the RUC recommendations would be accepted. Even though practice-expense values decreased, the work values for a large proportion of the codes in the new framework increased, and the net result is an increase in total relative value units for both nonfacility and facility settings (see table).
In a statement accompanying the final rule this past November, CMS said, “The 2014 payment rates increase payments for many medical specialties with some of the greatest increases going to providers of mental health services including psychiatrists, clinical psychologists, and clinical social workers.”
Ronald Burd, M.D., chair of APA’s Committee on RBRVS, Codes, and Reimbursements and APA’s representative to the RUC, told Psychiatric News that the AMA and the RUC were highly supportive of APA’s efforts throughout the multiyear effort. And he hailed the government’s acceptance of the new work values as an example of APA’s successful advocacy on behalf of members.
“CMS has adopted all of the RUC-recommended work values, which means that payment for those codes will go up,” he said. “This is the best outcome we could have hoped for at this juncture. There are obviously many, many other items impacting payment. But next time someone asks what APA has done for them, I would point to this as a specific situation where the work of APA, our professional organization, has increased reimbursement for psychiatric care.”
The AMA, in its summary of the new code changes presented to the RUC, also noted the positive outcome for psychiatry. “CMS announced acceptance of all recommendations by the AMA/Specialty Society RVS Update Committee (RUC) for psychotherapy services, leading to $150 million in improved payments for these services each year,” according to the AMA. “Depending upon the individual physician’s mix of services, psychiatry, on average, will experience a 6 percent increase in Medicare payments. This results from a three-year effort by the CPT Editorial Panel, RUC, and organizations representing individuals providing mental health services to redefine and revalue these critical services.”
For a stable patient, a 30-minute outpatient visit that includes evaluation and management (E/M) services along with psychotherapy is now coded using 99212 and 90833. Formerly it was coded as a 90805 and had an RVU of 2.11 assigned to it. In 2014, the total value of the 99212 and 90833 codes is 3.07, an increase of 45 percent from 2012 to 2014.
If the patient presents with a more complex problem requiring a higher-level E/M service the reimbursement would be even higher.
The new values also rectify an anomaly that existed in 2013—namely, that “psychiatric diagnostic interview without medical services” (90791, a code used by nonmedical mental health professionals) was being reimbursed at a higher rate than the psychiatric diagnostic interview with medical services (90792).
The new values reflect a decrease in values for 90791 and an increase in values for 90792.
The accompanying chart shows work value increases for many of the most frequently used codes by psychiatrists with the total relative value units for those codes from 2013 and the new values for 2014. The columns show the total relative value units (RVUs) for both nonfacility (outpatient services) and facility (inpatient services) payments. The column on the far right shows the increase or decrease in RVUs as well as the percentage change. These RVUs are multiplied by a “conversion factor” that yields a fee to be paid for each service.
Work on the new framework for psychiatric coding, to which the revised values will be applied, began more than three years ago. Psychiatrist Jeremy Musher, M.D., APA’s advisor to the AMA’s RUC and alternate advisor to the AMA editorial panel for the manual Current Procedural Terminology, explained in a 2012 interview with Psychiatric News that there were two persistent overarching concerns with the older framework—that codes used by psychiatrists consisted primarily of psychotherapy with evaluation and management (E/M) codes (for example, 90805, 90807), which had minimal work attributed to the E/M component, and that there was only one fixed low-level medication management code (90862).
Musher said such a “one size fits all” approach doesn’t accurately reflect the complexity of work done by clinicians with many of their patients.
“What that has meant is that if a psychiatrist sees a patient in psychotherapy with medication management, regardless of how difficult the patient is from a medical standpoint, the psychiatrist gets paid only for a low level of E/M work,” he said.
Now, Musher said, under the new billing system, “this has all changed to more accurately reflect psychiatrists’ work.” ■