Legislative News Update

Congress on December 9 voted to eliminate the 5% cut that would have been imposed on all Medicare providers beginning on January 1, 2007. As its last act before adjourning for the year, Congress passed the Tax Relief and Health Care Act (H.R. 6111), a massive bill that included a section eliminating the 5% sustainable growth rate (SGR) Medicare cut. In addition, the bill allows for a 1.5% bonus-incentive payment for providers who voluntarily report quality measures from July 2007 through 2008 in a process outlined in the bill. Psychologists are among the Medicare providers who will be eligible for these bonus payments. However, the new Congress is signaling that it will look closely at ways to improve the Medicare program next year, and we will be suggesting that having annual across-the-board reimbursement cuts to contain program costs is not a good way to operate the system. Unfortunately, APA reports that they were unable to gain inclusion in this legislation a provision to block the additional 9% cut scheduled for mental health services, which is occurring through a Centers for Medicare and Medicaid Services (CMS) “5-year review” regulation that was finalized in November. CMS will increase Medicare Part B payments for the provision of evaluation and management (E&M) services but, to be budget neutral as required by law, CMS is cutting all provider reimbursements in its payment formula. As a result, psychologists will sustain this cut beginning January 1st.

Projected House Committee Leadership of the 110th Congress