EAlert: Important Information for Behavioral Health Providers

2018 Final Rule – Shows Improvement of Payment Rates for Office-based Behavioral Health Services

CMS is in the process of finalizing an improvement in the way Medicare Physician Fee Schedule (MPFS) rates are set that will positively impact office-based behavioral health services.

The Final Rule Includes an Adjustment to Allocation of Indirect PE for Some Office-Based Services

Stakeholders have suggested that for codes in which direct Practice Expense (PE) inputs for a service are very low, the current allocation methodology does not allow for a site of service differential that appropriately reflects the relative indirect costs for furnishing services in non-facility settings. When looking at the services most affected by this, primary therapy and counseling services for treatment of behavioral health conditions, including substance use disorders were identified. For example, when looking at the most commonly billed psychotherapy service (CPT code 90834), the difference between the non-facility and facility PE RVUs is only 0.02 RVUs. The variance seemed unlikely to represent the difference related to administrative labor, office expense, and all other expenses incurred by the billing practitioner for 45 minutes of psychotherapy services when furnished in the office or other non-facility setting vs. the facility setting.

CMS then made a determination of what codes used in the non-facility settings were below the bar of 0.4 PE RVU’s. Fewer than 50 codes were identified for a potential change in the indirect PE allocation method, most of which are primarily furnished by behavioral health professionals. CMS needed to identify an appropriate PE for these services and targeted the most commonly billed physician visit, CPT code 99213, which is billed by a wide range of physicians and non- physician practitioners under the MPFS. They thought it likely that the PE costs related to providing 99213 would equate to the behavioral health services identified as needing PE modification whilst acknowledging behavioral health professionals may be unlikely to incur some of these costs such as separate office and examination room space, and storage for disposable medical supplies, however other costs such as staff and records storage & maintenance would not vary. They moved ahead with this understanding and utilized this, a ratio and other influencing factors as the baseline for the reasonable minimum allocation. The CMS proposed approach estimates approximately $40 million, or approximately 0.04 percent of total PFS allowed charges, would shift within the PE methodology for each year of the proposed 4-year transition, including for CY 2018. CMS considered comments made and then moved ahead with the proposed changes in the Final Rule.

In addition, many managed care contracts are based on a % of Medicare so the increase will flow thru to these contracts rates as well creating an overall increase and a better compensation schedule for these sorely needed professionals!

Good News for Behavioral Health Providers!