Medicaid Pharmacy Problems Grow

Psychiatrists must remain alert at the state level to the increasing use of pharmacy benefit management (PBM) techniques to control Medicaid costs. Fail-first policies, therapeutic substitutions, prior authorizations, and unknown appeals processes are being considered or already approved by state legislatures.To counteract this rising threat to clinical decision making, APA members can make the following points:

• Psychiatric drugs are different. Unlike other drugs, it can take from three to six weeks to determine a patient's response to a psychotropic.

• Patients have more idiosyncratic reactions to psychotropics than they do to other medications.

• Compliance is a far greater problem for patients taking psychotropics; switching patients from one drug to another can only exacerbate compliance problems.

Contact Karen Sanders of APA’s Office of Healthcare Systems and Financing at (800) 343-4671 or Paula Johnson of the Division of Government Relations at (703) 907-8588.

Magellan Crisis

State insurance commissioners are responsible for facilitating the fair and equitable treatment of insurance consumers, so when Magellan filed for bankruptcy under Chapter 11 on March 11, APA had already written each commissioner about its concerns. APA President Paul S. Appelbaum, M.D., expressed concern about continuity of care for patients and reimbursement for clinicians/organizations. Twenty states have responded: Arizona, California, Florida, Georgia, Idaho, Kentucky, Maine, Massachusetts, Michigan, Mississippi, Nevada, North Carolina, North Dakota, Pennsylvania, South Dakota, Tennessee, Texas, Virginia, Washington, and Wisconsin.

The responses are summarized on the APA Web site at www.psych.org.

Managed Care Help Line

Members are calling about Magellan's bankruptcy, although there are no reports of delays in payments. APA members most often call about how to start a practice; Medicare fees; pharmacy benefit management problems; and medical record retention.

The Managed Care Help Line can be reached at (800) 343-4671.

Cuts in Medicare Fees Projected

Under the Medicare formula, physicians are subject to pay cuts anytime the numbers of physician services increase more rapidly than the gross domestic product. In a March 20 letter to the Medicare Payment Advisory Commission, the Centers for Medicare and Medicaid Services (CMS) projected another fee cut for physicians in 2004. Based on current data, CMS is reporting that the Physician Fee Schedule (PFS) update for 2004 will likely be between -5.8 percent and 0.6 percent with a point estimate of -4.2 percent. For psychiatrists, this means a fee reduction for the third straight year, despite recent legislation to correct the flaws inherent in the physician reimbursement formula. APA, in coordination with the AMA, will continue to work with CMS and Congress to address the continued decline in physician reimbursement.

See www.psych.org or call (800) 343-4671.

Choosing the Right CPT Code

Use the code that most accurately reflects the service provided. For the typical initial evaluation, use 90801 or the appropriate Evaluation and Management (E/M) code—the 99XXX series. If psychotherapy is the predominant service, choose the appropriate psychotherapy code. Use the psychotherapy code with E/M codes if the session includes five to seven minutes of medical management (review of medications, side effects, physician orders, interpretation of lab results). For medical management (with little or no psychotherapy), choose 90862 or the appropriate level E/M code. If counseling and coordination of care are the predominant services, use the appropriate E/M code.

Caution: When selecting an E/M code be sure to let the situation drive the level. The more complex the case, the more likely it will require a higher level of work. Most situations will result in the use of a level three (99XX3) or level four (99XX4) code on the outpatient side or a level two (99XX2) code on the inpatient side. Your documentation must demonstrate the need for that particular level of service.

Send CPT inquires by e-mail to [email protected] or fax to (703) 907-1089.

APA Business Initiative Presses On

“Work is a core indicator of treatment outcome and psychological function, so psychiatrists should assess and understand the relationship between work and identity, work and functioning, and work and relationships,” said Steve E. Pflanz, M.D., a member of APA’s Committee on Psychiatry in the Workplace. Pflanz listed nine categories of questions for psychiatrists to address: (1) accidents and incidents; (2) absenteeism; (3) timeliness; (4) conflict; (5) performance (6) satisfaction; (7) security; (8) safety; and (9) stress.

See article at www.psych.org.

Mr. Muszynski is director of APA’s Office of Healthcare Systems and Financing.