RCPA - Rehabilitation and Community Providers Association


Medicare Parity Bill Survives Presidential Veto
July 22, 2008

On July 15 Congress voted overwhelmingly to override the president’s veto of HR 6331, the Medicare Improvements for Patients and Providers Act of 2008. The bill blocks the 10.6 percent cut to Medicare physician payment rate set to go into effect on July 1. More importantly, the bill also ends Medicare’s discriminatory 50 percent outpatient co-payment for mental illness and expands eligibility in Medicare’s telehealth program.

Currently, Medicare beneficiaries in need of outpatient mental health services face a discriminatory 50 percent co-pay for outpatient psychotherapy and services furnished by non-physician mental health professionals (20 percent for prescription and monitoring of medications to treat mental illness). In contrast, other outpatient health services require only a 20 percent co-payment. The higher co-payment has served as an incentive for seniors and people with disabilities that rely on Medicare to forgo needed mental health treatment. Parity for outpatient mental health would be established by phasing in a reduction of the higher co-payment over six years, to 20 percent in 2014.

Other important changes to Medicare include:

  • Improving the Part D prescription drug program by limiting out-of-pocket costs for dual eligibles;
  • Including barbiturates and benzodiazepines in Medicare D plans for prescriptions dispensed on or after January 1, 2013;
  • Expanding access to mental health care in rural America by making community mental health centers eligible to participate in the Medicare telehealth program;
  • Providing incentives to eligible practitioners for electronic prescribing; and
  • Increasing the Medicare Fee-for-Service Fee Schedule by five percent for specified services from July 1, 2008 through December 31, 2009. Specified services include Health Care Common Procedure Codes (HCCPCS) for psychiatric therapeutic procedures furnished in office or other outpatient facility settings or in an inpatient hospital, partial hospital, or residential care facility settings, with respect to services that are insight oriented, behavior modifying, or supportive psychotherapy, or interactive psychotherapy.

Another important provision of HR 6331 incorporates the Relief for Rural Veterans in Crisis Act of 2008. This provision would expand Medicare’s existing Rural Hospital Flexibility program to enable states to apply for $100 million in grant funding to increase the ability of rural hospitals and clinics to provide mental health services to veterans returning from Iraq and Afghanistan.

PCPA applauds the passage of this important piece of legislation and encourages members to express appreciation to their senators and representatives who voted in its favor. PCPA will keep members informed concerning details of implementation as more information becomes available. Further questions may be addressed to Betty Simmonds.

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