Medicare drug bill encouraging to psychologists who work with older adults

By Paula Hartman-Stein, Ph.D.


In November 2003 insurance companies with Medicare contracts published reimbursement rates for 2004 showing overall reductions averaging 4.5%. In late fall 2003 many psychologists who work with older adults in private practice settings began examining whether they could afford to continue treating the senior population.

Then as explanation of benefit forms began to arrive in early January, Medicare providers experienced initial disbelief followed by a sigh of relief.

The psychologists who did not read the details of the new Medicare Prescription Drug bill received an unexpected raise averaging 1.5%, a slight increase but much better than the expected decrease. The Medicare Prescription Drug, Improvement, and Modernization Act, touted for its expansion of prescription drug benefits, included payment reforms for doctors and hospitals. Psychologists and other health care providers who participate in the Medicare program received raises in rates ranging from .3% to 4% for their services.

In a letter to physicians published over the Internet from the Secretary of Health and Human Services, Tommy G. Thompson, said, "This new change in our payment policies should encourage you to remain in the Medicare program or enroll if you do not already participate."

The letter explained that changes to the relative value units and geographic practice cost indices could result in increases either more or less than the 1.5%. Thompson noted that in 2005 the change in reimbursement can be no less than 1.5%.

Healthcare providers in some rural areas saw a greater increase in payments as a result of new provisions requiring the Centers for Medicare and Medicaid Services (CMS). In reviewing a sample of the increases of the codes open to psychologists, the fee increases for Health and Behavior assessment and intervention procedures were less than the psychotherapy and psychological testing code increases.

In the Senate version of the Medicare drug law, language had included that marriage and family therapists and licensed professional counselors be included as Medicare providers. According to Psychotherapy Finances, the strong opposition in the House of Representatives caused it to be omitted in the final bill signed into law by President Bush on December 8, 2003.

Paula Hartman-Stein, Ph.D., president of APA’s section of Clinical Geropsychology, can be reached through her website,