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Medicare Reimbursement for Psychotherapy Services

Medicare Reimbursement for Psychotherapy Services

May 2012 - This review summarizes the changes during the past year to the Medicare outpatient mental health benefit. 

Psychotherapy Extender:  Congress finally implemented the Psychotherapy Extender which had prevented a cut to psychotherapy services proposed by CMS in 2009 for the past five years.  As a result, on January 1, 2012, reimbursement rates for psychotherapy were lowered by 5%. 

Proposed Sustainable Growth Rate Cuts:  LCSWs were saved from a second reduction when Congressional action halted the projected 29.4% SGR cut through December 31, 2012.

Relative Value Units:  Psychotherapy codes are currently being reviewed by the AMA Relative Value Unit Committee. RUC reviews all medical codes every five years and reports to CMS on their findings.  CMS will publish its determination about the RUC recommendations in November, 2012.

Cut by MEI Rebasing:  Due to “rebasing” of the Medicare Economic Index (MEI), psychotherapists received a 4% decrease in reimbursement rates in March of 2011.  Though CMS reduced other reimbursement work values, LCSWs and psychologists were hit the hardest because they typically provide services at lower cost and lower overhead.

Effect on LCSWs:  As a result of the MEI and Psychotherapy Extender reductions in reimbursement rates, LCSWs have experienced a 9% reduction in reimbursement rates since March 1, 2011.  Many LCSWs may have to leave Medicare if they are faced with these reimbursement cuts.

CSWA will continue to work to increase Medicare rates to LCSWs, currently at 75% of the rates for psychologists and psychiatrists for psychotherapy codes.  Changes to the RVUs may affect rates in the next year.  CSWA will continue to track the changes that occur and advocate for the work done by LCSWs.


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