The leading practice resource for behavioral health providers — since 1974

Volume 34, No. 7, Issue 411
July, 2008

MEDICARE: Rate cuts have been averted, and co-pays are to be equalized

Prodded by angry health care providers, Congress overrode a presidential veto of the new Medicare bill, reversing the whopping 10.6% rate cut that took effect July 1, 2008. Instead, mental health professionals billing Medicare Part B for psychotherapy will get an increase of about 5%--backdated to July 1. And here are two other pieces of good news for practitioners:

1. A 5.5% rate cut scheduled for next year has already been dropped, and instead there will be a 1.1% increase for all providers.

2. Medicare mental health co-pays will be reduced by 5% a year until 2014. Currently, the co-pay is 50% as opposed to 20% for med/surg.

“This was as clean a sweep as I have seen,” says Laura Groshong, director of government relations for the Clinical Social Work Association. “I can’t think of anything we wanted that we didn’t get...I think many legislators got caught up in the cuts and the furor around them, so they weren’t aware of all the other changes that the bill entailed.”

The override vote, which came hours after the president’s veto on July 15, was 70-26 in the Senate and 383-41 in the House.

The problem now is how claims submitted between July 1 and July 15 will be handled. According to Jean Thoensen, a mental health biller and consultant in Virginia, some clinicians have been holding back claims pending resolution of the issue. If you’ve been holding them, she says, submit them now.

Claims already submitted for services provided during those two weeks may be paid based on the 10.6% cut--but that isn’t yet clear.

As always with the federal program, the devil is in the details. So we’ll be following up with specifics--on the co-pay issue, as well as other aspects of the new law--in the months ahead.

Contacts: 1) Laura Groshong, Director, Government Relations, Clinical Social Work Association, 4026 NE 55th St., Ste. C, Seattle, WA 98105 (206) 524-3690, email:; 2) Jean Thoensen, PsychBiller, Centreville, VA, (703) 266-8612,