Sunday, September 25, 2011

What Medicare Cuts May Mean For Patients Who See Psychiatrists

Over on Shrink Rap News, Roy wrote a post about proposed Medicare cuts.  He continued the conversation here on Shrink Rap.  

I want to expand on the discussion in what I hope will be easy-to-understand terms.  Why would anyone who is not a doctor even care what Medicare reimburses their docs?  Let me tell you why you might care.

Doctors all have one of four designated categories within the Medicare system:
1) The doc participates and accepts Medicare assignment.  The fee for the service is set by Medicare, the patient makes a co-pay and the doctor bills Medicare and gets the rest of the fee from Medicare.
2) The doctor is "non-participating" --which is a deceptive term, because non-participating docs are within the Medicare system.  The fee for the service is set by Medicare and is typically 5% less then the fee for participating docs, but the patient pays the Medicare fee in full to the doctor, the doctor files a claim with Medicare, and Medicare reimburses the patient for a portion of the fee. 
3) The doctor has formally opted-out.  In this case, the doctor charges the same fee that every other patient is charged, the patient pays the doctor in full.  No forms are filed to Medicare and the patient receives no reimbursement at all.  A doctor who opts in one setting is opted out in all settings, so one can't opt out in private practice and also work in a clinic where Medicare is accepted. 
4) The doctor never files anything with Medicare.  He can not see Medicare patients at all, ever, in any setting.  Perhaps he can see patients for free(?), but no money can change hands and no forms get filed.  This is not the usual.

The current proposal is for a 30% cut in provider fees for 2012.  Oh, we dance this dance every year.  But this year, the thinking is that it may stick.  As is stands now, the current Medicare fee for a non-participating provider in the area where we live, for a 50 minute psychotherapy session, with medication management, in a non-facility (meaning, for example, a private practice that is not hospital-based) is $120.96.  This fee is notably lower than going community rates, and because of this, many psychiatrists who practice psychotherapy have opted out: they can charge what they'd like and they don't have to deal with the hassles of filing any paperwork.  Oh, but it's not just psychiatrists, some internists have opted out of Medicare.  It means that when you hit 65, either you pay your doctor out-of-pocket, or you change doctors.

Currently, it's hard for patients to find psychiatrists who participate with Medicare, and those who do often limit new Medicare patients. A doctor can come highly recommended, and you may be a multi-millionaire, but that doesn't matter, because once a doctor is in Medicare as either participating or non-participating, the fee is set by Medicare and being rich doesn't buy you in, because all Medicare patients pay the same fee. 

If the fee drops so that an hour of work is reimbursed at $84.67, a 30% decrease, more psychiatrists will opt out.  From the doctor's point of view, they kind of win: if they can hold on to a big enough patient base, they can charge their usual (generally higher) fees and they don't have to hassle with claims.  From Medicare's perspective, they definitely win: patients are forced to get care outside the system and they reimburse nothing.  It's not like going out-of-network with your private insurance where they will still pay for services, perhaps at a lower rate or with a higher deductible, but they do compensate for a chunk of the care.  Those doctors who remain in the system are those who can make it work for them--- they see patients for Pharmacologic Management with a code that does not have a time requirement and cram as many patients in as fast as they can see them.  But as SteveMD has pointed out in his comment, when fees drop by 30%, even the workhorse psychiatrists who can go at an exhausting pace of 4-5 patients per hour will be making much less money to provide one-size-fits-all 10 minutes-with-a-shrink care. 

From the patient's point of view: they lose.  Suddenly their doctor doesn't accept Medicare.  They now get hit with a much higher fee and they get no insurance reimbursement.  This is why you should care.
On a lighter note, the photo above is a picture of Oreo, a very sweet Havenese poochie we befriended during our book signing at the Baltimore Book Festival today.  I put a photo of us up on our Facebook more illustration of Roy ragging on me.  Please do visit our FB page at Shrink Rap Book and by all means, "Like" us!


jesse said...

The system has many perplexities. If a doctor has opted-out a patient might have secondary insurance, but most of the time that insurance pays only AFTER Medicare has. So if Medicare pays guessed it, the patient essentially has NO insurance.

Theoretically a doctor could bill for whatever Medicare does not cover. This arrangement has been used (exploited?) by the internists who have Concierge practices. They are charging for services not included by Medicare. But I know of no one or no group that has done this with psychiatry. I guess it is because it is not worth the financial effort, or that no one wants to take the legal risk.

I have opted out but still have many Medicare age patients. I lower fees whenever appropriate (I don't use a scale or check tax returns, just use my judgment).

The problem for psychiatry has been that the fee paid to the patient by insurance for one-hour sessions is very low, as is the fee paid to them by private insurers. Blue Cross pays about $40 here in Maryland. But the silver lining from this is that the fee is SO low that many patients can afford to not get reimbursed. This has left many psychiatrists able to run private practices without needing to participate with private insurers. They write it off when appropriate.

Roy said...

What's sad is that this means that these people with Medicare or Blue Cross THINK they have insurance that covers mental health, but effectively it does not. This feels like fraud to me.

synergesta said...

I just feel sad because I see patients for psychotherapy with or without medication as appropriate. I accept Medicare and must be one of the few in private practice who do for the reasons you cite in your post. My understanding is that I must file for a patient's co-insurance, and because many of my Medicare patients are disabled and/or poor, they have Medicaid. Used to be in PA I was in network and a provider, so it just rolled over and I was paid a small copay by Medicaid. Several years ago they changed to some kind of managed system that is too overwhelming for me to participate in, so I can't accept patients with Medicare/Medicaid because it is fraudulent NOT to bill for the copay. (If I am wrong here, someone please correct me. I called Medicare a few years ago to confirm this and that is what I was told.) Since I already write off so much, it would not be a big deal, but why does it have to be so complicated? Also the resident-run clinic at my teaching hospital can not see Medicare patients because of Medicare's rules for attending face to face involvement not to mention the "double -dipping" financial problem. That limits the sort of patients the resident gets to treat esp the elderly and the chronically disabled. Oops I am ranting again. Sorry.

SteveBMD said...

I've always wondered if one could have a thriving practice by opting out of all insurance plans (including Medicare) and charging patients by a simple and inexpensive fee schedule. For instance: $25 per 15 minutes. (A quick med check would be $25, an hour of therapy would be $100.) That gives a base wage of $100/hr or a salary of $208,000 per year. You could also add additional fees for paperwork-- at the same hourly rate.

Building a practice would take time, but I would imagine lots of patients would willingly opt out of the confusing insurance maze (and accept the much lower out-of-pocket costs than those charged by most private psychiatrists). Also, even though the $208K salary is lower than what you might find elsewhere, there are no confusing forms, little overhead, no need for a large staff, you can choose a free EMR (or no EMR at all), and you can set your own hours.

I realize this might not work for Medicare patients-- many of whom are on a fixed income or have little disposable cash-- and I'm not a big fan of making up for lost income by maximizing volume, but could a proposal like this possibly work?

One more thing: synergesta, does Medicare really require attendings to see Medicare patients face-to-face at outpatient teaching clinics? Just wondering.

Anonymous said...

Interesting idea. I have a practice like this and know a fair number of psychiatrists who do, except for the low-fee part. The odd thing is that in medicine, it has not been my experience that low fees draw 'customers'...people think something is wrong with you.
There are logistical problems with your model-- for one thing, 4 patients an hour is an exhausting pace, much more work than 1 patient an hour (even low tech, cash practice, you still have to keep a chart and communicate with family members, other doctors, pharmacies, labs) and for your hour, 4 patient is 4 times the likelihood of after hour calls, emergencies, crises. Logistically, you'd have hours allocated for 1 patient, other hours allocated for 2, others for 4. But what happens when a 15 minute patient only wants specific times and those are allocated for half hour patients? You end up making $25 for you half hour..what happens when you have 4 patients in an hour and two patients arrive 10 minutes late? And even with your ads for "I'm cheap" patients still call asking "do you take my insurance?" and you'll spend a lot of time on your high volume practice explaining to people how this works...and they will still say "I can see someone for $30 in network".
Oh, and clinics pay $100/hour (or more) for psychiatrists and schedule 2 patients/hour, no overhead, paid even if the patients don't show up. What would be the advantage of seeing 4 patients an hour without a team to help with all the communication/paperwork issues, and the risk that patients don't show/don't pay?

I think the Medicare attending thing is right.

Anonymous said...

For comparison's sake, I believe our single payer system in Ontario Canada pays psychiatrists 160 for a 45 minute session. Single payer system has simpler billing, everyone is covered and patients and doctors never talk about payment or money.

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Medicare Yearly Wellness Exam said...

Isn't it that tentatively the current Medicare payments to doctors, including psychiatrists would be paid as is by cutting Medicare reimbursements to hospitals and reducing by half an $8 billion program for a prevention and public health fund established in the new health care law?