The ACEP Reimbursement Committee recently discovered a change in reimbursement for the care of Medicare patients with psychiatric conditions in the emergency department.

Certain Medicare carriers (including Palmetto beginning in May 2009) have decided to implement a long-standing CMS policy that reduces payment for the evaluation and management services provided in outpatient settings to 62.5% of the Medicare Fee Schedule. This applies to mental health services when furnished in any outpatient setting.

This reduction in payment is applied to outpatient evaluation and management CPT codes, including those for the emergency department (99281 through 99285) when the primary diagnosis falls within the ICD-9 code range 290-319, with the exception of patients with a diagnosis of Alzheimer’s disease. Most of the typical ED psychiatric diagnoses (e.g., anxiety, depression, and psychosis) are in this code range.

Under typical Medicare Part B payment processes, the Medicare carrier pays the provider 80% of the physician fee schedule, and the patient is responsible for the remaining 20%.

In this instance, related to particular mental health diagnosis codes, the Medicare carrier is reimbursing pro-viders at 80% of the 62.5% payment

(or 50% of the total Medicare Fee Schedule) but is allowing the provider to bill the patient a larger “coinsurance” amount (i.e., the remaining 50% of the Medicare Fee Schedule rather than the typical 20%) as indicated on the Medicare EOB.

The Reimbursement Committee has also learned that Medicare is currently in the process of phasing out this reduction over a 4-year period so that the provider will receive the usual 80% of the 2014 fee schedule allowable.

Links to information about the changes are at www.ACEP.org, under the “practice resources” tab and the “reimbursement” link.

Dr. Rubin and Dr. Granovsky are members of ACEP’s Reimbursement Committee.