Psychologists likely to see increases for psychotherapy services, but pay cuts for other services in Medicare for 2021 (2024)

Psychologists and other providers who treat Medicare patients can expect to see a drop in payment for a significant number of health care services in 2021, but not diagnostic evaluations or psychotherapy.

On December 1, 2020, the Centers for Medicare and Medicaid Services (CMS) released the final rule on the 2021 Medicare physician fee schedule revealing that the most hotly contested issue—reducing payments to all providers to offset increases for office and outpatient evaluation and management (E/M) services—is being adopted.

Despite APA and many other specialty societies advocating for CMS to work with Congress to waive the budget neutrality requirement that forced the offset, the agency will reduce the conversion factor (CF)—a multiplier used to determine practitioners’ Medicare payments—by 10.2% to $32.41 in 2021.

Although the final rule applies only to Medicare, private insurance carriers often use Medicare fees as a benchmark and could adjust their rates accordingly. APA will now focus its advocacy efforts on lobbying Congress to take action to prevent this projected loss in revenue.

The bright spot in 2021 is that CMS will increase the work values for stand-alone psychotherapy services to maintain relativity with outpatient E/M services. The new value for the 90791 diagnostic evaluation is considerably higher at 15.7%, and values for the 30-, 45-, and 60-minute psychotherapy services will negate the conversion factor reduction.

The agency did not adopt APA’s request to adjust the work values for the health behavior assessment and intervention (HBAI) services and psychological and neuropsychological testing services. The agency’s rationale was that HBAI and testing are fundamentally different from the work performed under E/M codes—i.e. they do not have an obligation to require relativity with the new E/M code values. This means that psychologists providing HBAI services and psychological and neuropsychological testing services will unfortunately see decreases in reimbursem*nt.

Under Medicare’s payment formula, each billing code’s values for work, practice expense, and malpractice expense are multiplied by the CF, along with a geographic index, and combined to create the payment amount.

The chart below, using nationwide rates, shows the impact on reimbursem*nt for all outpatient psychological services in 2021 compared to 2020. These figures incorporate various changes under the Medicare payment formula, including adjustments to practice expense and geographic price indices. APA will also be providing a table outlining the changes for facility setting in January 2021.

Good news for telehealth services is that the group psychotherapy code (90853) and the neurobehavioral status examination add-on code (96121) will be added to Medicare’s permanent (category 1) telehealth list. CMS will also add the codes for psychological and neuropsychological test evaluation (96130-96133) and administration/scoring services (96136-96139) to Medicare’s temporary (category 3) telehealth list. Category 3 services will remain on the telehealth list until the end of the calendar year in which the COVID-19 public health emergency (PHE) ends, unless CMS decides they qualify to become permanent additions to telehealth.

CMS did not adopt APA’s suggestion to add adaptive behavior services and developmental testing services to the category 3 telehealth list at this time.

During the current PHE, CMS has been allowing various nonphysician practitioners, including psychologists, to bill for brief online assessments initiated by a patient. Starting in 2021 this becomes permanent, allowing psychologists to continue to bill for services they furnish under HCPCS codes G2061 through G2063. These codes are for services furnished online or through a digital platform (e.g., an online patient portal). In an “e-visit” the provider assesses the patient and engages in clinical decision-making that would otherwise have taken place in the provider’s office. The difference between the three codes is the length of the e-visit. G2061 is for five to 10 minutes, G2062 for 11–20 minutes and G2063 for 21 minutes of more.

CMS is adopting HCPCS code G2261 for assessments via telephone or another telecommunications device by nonphysician providers (NPPs) who don’t bill for E/M services. Also referred to as a virtual check-in, this communication for technology-based (CTBS) service is limited to five to 10 minutes of discussion with an established patient who has not had a related service in the past 7 days and does not lead to a service or procedure within the next 24 hours.

CMS believes it does not have the authority to waive the requirements for telehealth following the end of the public health emergency. Consequently, the use of audio-only telephones for telehealth services will not be eligible for payment after the PHE ends. Absent action by Congress, telehealth services from that point on will once again require audio and visual two-way communication.

A brief assessment under code G2261 discussed above will be eligible for payment if furnished via an audio-only telephone because it is not a telehealth service.

CMS acknowledged APA’s objection to the proposal to revise regulation § 410.32(b)(2)(iii)(B) to permit certain NPPs to supervise psychological and neuropsychological testing. APA’s comments on the proposed rule included information showing that psychological and neuropsychological tests are not within the scope of practice of the proposed NPPs and require special training only available to psychologists and physicians. The NPPs cited by CMS are nurse practitioners, clinical nurse specialists, physician assistants, certified nurse midwives, and certified registered nurse anesthetists.

CMS notes in the final rule that the intent of revising the regulation is to allow NPPs with separate benefit categories under Medicare law to supervise the performance of diagnostic tests, regardless of the specific category of diagnostic tests, only to the extent their scope of practice and state laws authorize them to do so. CMS states that the scope of practice and state laws will determine whether the NPPs are qualified to supervise the performance of diagnostic psychological and neuropsychological tests in addition to physicians and clinical psychologists who are already authorized to do so.