Medicaid Pharmacy Problems Grow

State insurance commissioners are responsible for facilitating the fair and equitable treatment of insurance consumers, so when Magellan filed for bankruptcy under Chapter 11 on March 11, APA had already written each commissioner about its concerns. APA President Paul S. Appelbaum, M.D., expressed concern about continuity of care for patients and reimbursement for clinicians/organizations. Twenty states have responded: Arizona, California, Florida, Georgia, Idaho, Kentucky, Maine, Massachusetts, Michigan, Mississippi, Nevada, North Carolina, North Dakota, Pennsylvania, South Dakota, Tennessee, Texas, Virginia, Washington, and Wisconsin.

Members are calling about Magellan's bankruptcy, although there are no reports of delays in payments. APA members most often call about how to start a practice; Medicare fees; pharmacy benefit management problems; and medical record retention.

Under the Medicare formula, physicians are subject to pay cuts anytime the numbers of physician services increase more rapidly than the gross domestic product. In a March 20 letter to the Medicare Payment Advisory Commission, the Centers for Medicare and Medicaid Services (CMS) projected another fee cut for physicians in 2004. Based on current data, CMS is reporting that the Physician Fee Schedule (PFS) update for 2004 will likely be between -5.8 percent and 0.6 percent with a point estimate of -4.2 percent. For psychiatrists, this means a fee reduction for the third straight year, despite recent legislation to correct the flaws inherent in the physician reimbursement formula. APA, in coordination with the AMA, will continue to work with CMS and Congress to address the continued decline in physician reimbursement.

Use the code that most accurately reflects the service provided. For the typical initial evaluation, use 90801 or the appropriate Evaluation and Management (E/M) code—the 99XXX series. If psychotherapy is the predominant service, choose the appropriate psychotherapy code. Use the psychotherapy code with E/M codes if the session includes five to seven minutes of medical management (review of medications, side effects, physician orders, interpretation of lab results). For medical management (with little or no psychotherapy), choose 90862 or the appropriate level E/M code. If counseling and coordination of care are the predominant services, use the appropriate E/M code.

Caution: When selecting an E/M code be sure to let the situation drive the level. The more complex the case, the more likely it will require a higher level of work. Most situations will result in the use of a level three (99XX3) or level four (99XX4) code on the outpatient side or a level two (99XX2) code on the inpatient side. Your documentation must demonstrate the need for that particular level of service.

“Work is a core indicator of treatment outcome and psychological function, so psychiatrists should assess and understand the relationship between work and identity, work and functioning, and work and relationships,” said Steve E. Pflanz, M.D., a member of APA’s Committee on Psychiatry in the Workplace. Pflanz listed nine categories of questions for psychiatrists to address: (1) accidents and incidents; (2) absenteeism; (3) timeliness; (4) conflict; (5) performance (6) satisfaction; (7) security; (8) safety; and (9) stress.

Mr. Muszynski is director of APA’s Office of Healthcare Systems and Financing.