Medicare Physician Fees Slightly Higher for 2009

Many APA members should see an approximately 4 percent increase in their Medicare fees for 2009 compared with the second half of 2008. You may recall that last July, through passage of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), the psychotherapy codes received a 5 percent boost for the rest of 2008 that continues for 2009. But beyond that slight increase, a change in the way the “neutrality adjuster” for Medicare fees is applied has created the larger bump in fees for the psychiatry codes in 2009.

Since Medicare is a zero-sum game, when there is an increase in the value of a CPT code, the value of other codes must be decreased to maintain budget neutrality. A “budget neutrality adjuster” is applied to the relative value of all the procedure codes to meet this requirement. Prior to MIPPA's passage, the budget neutrality adjuster was applied only to the work relative value units (RVUs) of each CPT code. This was particularly rough on psychiatrists and other physicians such as internists who primarily use CPT codes that are rated heavily on the work they do rather than on their office expenses (which for many medical specialists includes pricey medical equipment) and insurance payments. With MIPPA, the budget neutrality adjuster is now applied to the overall conversion factor rather than just to the work values, which means any decrease is applied equally across all services. APA and the AMA had long lobbied for this change.

The chart at left provides an example of the increase in fees for a sampling of psychiatry codes in the Chicago area. To check the 2009 fee schedule for your locale, go to your Medicare carrier's or contractor's Web site. If you need help finding the Web site address, call the Managed Care Help Line at (800) 343-4671. ▪