CPPNJ - The Center for Psychoanalysis and Psychotherapy of New Jersey


Legislative Alert

The Centers for Medicare and Medicaid Services (CMS) has published a proposed rule for the 2011 Medicare Part B “physician fee schedule” that would significantly reduce Medicare payments to clinical social workers and psychologists that bill Medicare Part B services. The highly complex rule addresses changes in the physician fee schedule and other Medicare Part B payment policies to ensure that rates are updated to reflect changes in medical practice and the relative value of services. Unfortunately, the rule would significantly reduce payments for mental health services due to revisions in one component of the formula, the medical economic index (MEI).

Specifically, CMS is proposing to rebase the MEI by linking it to data from the 2006 physician practice survey. The proposed changes would result in an increase in practice expense values, but by law the rebasing must remain budget neutral in its impact so CMS proposes to impose a 4% across the board reduction in the work component for all services. The net result is that work-intensive specialties like clinical social work would see a decrease, while practice expense-intensive specialties would see an increase.

Clinical social workers and psychologists would experience the largest projected average cut of 5% while medical specialists with the greatest reliance on costly technology and overhead would receive increases. In addition, clinical social work and psychology are already scheduled under current law to receive an additional 2% cut due to the second year implementation of 2009 practice expense adjustments, under which practice expense was also increased at the expense of psychotherapy services and other work-intensive practices. Since 2006, CMS has repeatedly made changes to Medicare formularies that have significantly devalued and reduced payments for the time and expertise of health care professionals. It is simply wrong for CMS to continually cut payments for cost-effective services to boost payment for practices that require expensive equipment and overhead that are driving the inflation of health care costs.

The deadline for comments about the proposed rule was August 24, 2010. A large effort on the part of Clinical Social Workers and Psychologists generated many comments condemning the proposed rule. We will wait with great anticipation to see what the result of this effort may be.