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Doc Fix in place - for now

In the December, 2011, issue of Psychotherapy Finances, we discussed the potential Medicare fee reductions that threaten mental health providers each year.  Most problematic is the 27.4% reimbursement cut mandated by the Balanced Budget Act of 1997.  At the end of each year since the Act was passed, the House and Senate have come through with the so-called “Doc Fix” that avoids the reduction under Medicare “Sustainable Growth Rate” language in the budget law.

As 2011 came to an end, we predicted that the same thing would happen this year -- but reps from the American Psychological Association (APA) and the Clinical Social Work Association (CSWA) pointed out that the budget tightening mood in Washington made the situation more volatile than in years past.

At the last minute Congress held up the fee cuts and kicked the can down the road until February 2012.  We'll keep you posted.


Congress playing out its annual fee cut ritual

As the year comes to an end, psychologists and clinical social workers are taking part in a new holiday tradition:  watching to see how Congress deals with the scheduled 27.4%  cut mandated by the Balanced Budget Act in 1997.  Every year since the Act was passed, the House and Senate have come through at the last minute with the “doc fix” that avoids the reduction under Medicare “Sustainable Growth Rate” language in the budget law. 

The same thing is expected to happen this year, but professional associations are a little less confident than they usually are because of the  budget tightening mood in Washington.

 A 5% cut for  of psychotherapy services--which Congress has been kicking down the road annually since 2007--also remains in limbo.  (That was first introduced to help finance a fee increase for primary care docs.)

On top of that, the failure of the so-called “Super Committee” to identify cuts to the federal budget means that Medicare providers could be looking at an additional 2%  cut starting January 1, 2013.

So in theory, if you add the three reductions together, non-MD practitioners could be facing Medicare  cuts of 34.4% over the next 13 months.  Is such a thing really possible?

"[Medicare] third party administrators have already sent the 2012 fee schedule reflecting those cuts to providers,” says Katherine Nordal, executive director of the Practice Directorate at the American Psychological Association (APA).  (That’s a 32.4% cut--the other 2% wouldn’t kick in until 2013.)

 “They want to give everybody a heads up.  But we're hoping they'll have to do the same thing as last year, which was to readjust and supplement the .  Our government relations staff thinks it will be resolved and the 5% cut will be avoided, too.”

 Not everyone’s so confident.  “I’m less optimistic now than I’ve usually been,” says Laura Groshong, a lobbyist and director of government relations with the Clinical Social Work Association (CSWA).  “It’s hard to believe that a 34% cut would be allowed, and I’m hoping we can come up with a way to at least minimize it.  But at this point I have to be realistic and look at what actually could happen.  It’s a very discouraging time.”

 As the year ended, leaders were trying to come up with an agreement on the doc fix.  One proposal was for a two-month temporary pact that would prevent a Medicare  cut until March 1.

 A brighter spot in the Medicare picture for 2012 is the continued reduction in copays, which have traditionally been 50%.  But because of the parity law, a copay of 20% is being phased in.  It will be 40% in 2012, 35% in 2013 and 20% in 2014.

“I think that will make mental health services much more accessible for older people,” Nordal says.

 But Groshong believes any growth in Medicare mental health services “depends on how many providers are going to keep seeing Medicare patients.  Because if these cuts go into effect, you’re going to see a lot of people deciding not to take Medicare.”

 Contacts: 1) Laura Groshong, CSWA, Seattle, WA, (206)524-3690,; 2) Katherine Nordal, American Psychological Association, Washington, DC, (202)336-5913, email:


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