Medicare update 2004: Reimbursement for ‘work value’ under review

By Paula Hartman-Stein, Ph.D.

 Q---Has any progress been made regarding the relatively low reimbursement rates for psychological testing services in the Medicare system?

A—The Relative Update Committee (RUC) of the American Medical Association (AMA), has recently recommended the first work value for a psychological testing code, developmental testing (Clinical Procedural Terminology code 96111) to the Center for Medicare and Medicaid (CMS), according to Jim Georgoulakis, Ph.D., San Antonio, the APA representative to the RUC. The recommended value is 2.65 compared to 2.80 for an initial psychiatric interview and 1.85 for a 50-minute out-patient psychotherapy service.

Other psychological testing codes lack work values, a part of the equation used to determine reimbursement rates under the Medicare system. Ninety-six percent of the private insurance companies utilize the same methodology for computing rates, according to Georgoulakis, illustrating the influence of Medicare on rates for psychological and neuropsychological assessment services across the board.  Reimbursement for testing is lower than most other behavioral health services because it is based primarily upon expenses for office practice overhead and malpractice costs.

 Q— How is “work value” defined in the Medicare system?

A---Under the Resource-Based Relative Value Scale, the methodology first designed in 1986 and adopted by Medicare in 1992, work value is determined by “face to face time with the patient taking into account the intensity and stress of the service,” explained Georgoulakis.

 Q—Interpretation of test results and report writing are parts of psychological testing services in addition to the face- to- face time with the patient. So will a work value be determined for the entire process?

A—“We’re going to try and borrow from Radiology and Cardiology, two medical specialties that have codes for reading and interpreting test results. There is precedent for counting the cognitive skill component in the work value,” said Georgoulakis. “Both the technical and professional aspects of testing will be evaluated.”

 Q--Do you anticipate that the psychological testing codes will be modified or changed from their current terminology in the CPT manual?

A—“This is a delicate and challenging issue. We’re in the process of modifying the psychological testing codes right now, with involvement from the APA, the AMA, and the RUC,” according to Georgoulakis.

 Q—Will “extenders” or non-licensed, supervised clinicians be allowed to provide testing services?

A—Georgoulakis said he does not know for sure. “We’re trying to take what we do and fit it into the medical model of service provision. The concern of the RUC is to focus on what the licensed Medicare provider does.” He suggested that state licensing laws tend to shape what the regulations will be regarding extenders.

Q—Is it likely that a work value for testing to be determined for 2005?

    A—“I think it is possible. We hope to present the modifications of the codes by February 2004. Once the AMA approves any modifications to the codes, they go to the RUC that will meet in April 2004. The RUC then makes recommendations to CMS. It is a very complicated process. There are factors beyond our control,” Georgoulakis said.

Q— What areas of service are likely targets for audits in 2004?

    A—People should look to the work plan of the Office of Inspector General. (See The National Psychologist, November-December 2003, “OIG  Workplan 2004 targets psychiatric and rehab in-patient services”).

Georgoulakis explains, “The OIG is telling everyone, including individual providers, that they should have someone outside their practice review their records once a year. If you have been selected for an audit because of something irregular and you are without a compliance plan and conduct no internal audits, you could be dead meat.”

 Q--Is there any definite good news for behavioral health providers for 2004?

        A—“The good news is that for partial hospitalization services the rates are going up 18.2%. In order for a facility to receive the payment, each patient must have individual psychotherapy and another therapy service such as group therapy every day,” resulting in an increase of employment and consulting opportunities for psychologists.

Paula Hartman-Stein, Ph.D., current president of APA Division 12, section II (clinical geropsychology), is a consultant in Kent, Ohio. She can be reached through email, cha@en.com, or her website, www.centerforhealthyaging.com.

The National Psychologist, Vol. 13, No. 1, January/February 2004