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Health Reform Special Report
Health Reform's
Impact on Psychiatrists and Patients
On March 23, President Obama signed the Patient Protection and Affordable Care Act (H.R. 3590) into law as Public Law 111-148. Congress also passed separate "reconciliation" legislation -- the Health Care Education Affordability Reconciliation Act (H.R. 4872) -- on March 25, which changes some provisions of PL 111-148.  Enactment of the two bills completes more than a year long debate on comprehensive health reform, and will have far-reaching effects on both patients and psychiatrists and other physicians.  
No legislation is perfect and PL 111-148 is no exception.  APA is committed to seeking changes in the law where needed (such as repealing the establishment of an appointed payment advisory board that could require mandatory Medicare cuts).  On balance, however, the law includes numerous positive features for psychiatrists and particularly for patients.  Above all else, the law will ensure that virtually all Americans will have comprehensive health insurance coverage that includes coverage for treatment of mental illness including substance use disorders (SUD), and that individuals may not be excluded due to pre-existing conditions or dropped because of their health status.
Here is how the new law may affect APA members and their patients  (# = APA supported/lobbied for; @ = APA opposed/lobbied against)
Key Mental Health Provisions in Reform:
  • 5 percent temporary increase in payment for mental health services: For 2010, Medicare will increase payment for psychotherapy services by 5 percent.  This is an extension of the same "bump" for part of 2008 and all of 2009 that expired on January 1, 2010. #
  • Essential Benefits Package: Includes mental health and  SUD treatment in the required essential benefits package offered in the state exchanges. #
  • Parity for Mental Health and SUD Treatment: Requires mental health and SUD benefits to be offered at "parity" with other medical and surgical benefits for all insurance plans sold within the health insurance exchanges that are created under the new law.  The exchanges are designed to be a competitive marketplace for individuals and small employers to shop for health insurance.  #
  • Support, education, and research for postpartum depression: Provides support services like screening to women suffering from postpartum depression and psychosis and also helps educate mothers and their families about these conditions. Provides support for research into the causes, diagnoses, and treatments of postpartum depression and psychosis. #
  • Co-locating primary and specialty care in community-based mental health settings: Authorizes $50 million in grants for coordinated and integrated services through the co-location of primary and specialty care in community-based mental and behavioral health settings.  #
  • Co-locating primary and specialty care in community-based mental health settings: Authorizes $50 million in grants for coordinated and integrated services through the co-location of primary and specialty care in community-based mental and behavioral health settings.  #
  • Centers of excellence for depression: Directs the Administrator of the Substance Abuse and Mental Health Services Administration to award grants to centers of excellence in the treatment of depressive disorders starting in fiscal year 2011.  #
  • Medicaid Emergency Psychiatric Demonstration Project: Requires the Secretary of Health and Human Services to establish a three-year Medicaid demonstration project in up to eight states. Participating states would be required to reimburse certain institutions for mental disease (IMDs) for services provided to Medicaid beneficiaries between the ages of 21 and 65 who are in need of medical assistance to stabilize an emergency psychiatric condition under the hospital anti-dumping law known as EMTALA.  #
  • Community Mental Health Centers: Increases funding for community mental health centers.  #
Impact on Psychiatrists and Other Physicians:
  • Geographic payment differentials: Re-establishes in 2010 the now-expired national average "floor" on Medicare's geographic payment adjustment (commonly known as the GPCI) for physician work. In 2010 and 2011, Medicare will make a separate adjustment for the practice expense portion of physician payments that will benefit physicians including psychiatrists in rural and low cost areas. Physicians in 51 localities in 42 states, Puerto Rico and the Virgin Islands will benefit from the two practice expense adjustments.
  • Medicare shared savings program: Rewards Accountable Care Organizations (ACOs) that take responsibility for the costs and quality of care received by their patient cohort over time. ACOs can include groups of health care professionals and providers (such as physician groups, hospitals, nurse practitioners and physician assistants, and others). ACOs that meet quality-of-care targets and reduce the costs of their patients relative to a spending benchmark are rewarded with a share of the savings they achieve for the Medicare program.
  • Physician Quality Reporting Initiative: Requires all physicians participating in Medicare to report on performance measures.  Starting in 2015 physicians who fail to report successfully will be penalized 1.5 percent.  APA opposes the penalty and successfully lobbied to have it pushed from 2013 to 2015.  @
  • Independent Payment Advisory Board: Establishes an "IPAB" to recommend changes in Medicare payment policy.  If spending exceeds target, IPAB would recommend reductions to achieve the target; Congress would have to intervene to stop such reductions.  APA opposes the IPAB.  @
  • Health Home: This state option to provide health homes for enrollees with chronic conditions now includes an APA-lobbied coverage of individuals with a persistent and serious mental illness.  Health homes would be composed of a team of health professionals and would provide a comprehensive set of medical services, including care coordination.  #
  • Demonstration project to evaluate integrated care around a hospitalization: Establishes a demonstration project, in up to eight states, to study the use of bundled payments for hospital and physicians services under Medicaid.
Health Information Technology 
  • Health information technology: Beginning in 2013 health insurance plans must implement uniform standards for electronic exchange of health information to reduce paperwork and administrative costs.
  • Federally supported student loan funds: Eases current criteria for schools and students to qualify for loans, shortens payback periods, and decreases the non-compliance provision to make the primary care student loan program more attractive to medical students.
  • Health care workforce loan repayment programs: Establishes a loan repayment program for pediatric subspecialists and also includes APA-supported language covering providers of mental and behavioral health services to children and adolescents who are or will be working in a Health Professional Shortage Area, Medically Underserved Area, or with a Medically Underserved Population.  #
  • Funding for National Health Service Corps: Increases and extends the authorization of appropriations for the National Health Service Corps scholarship and loan repayment program for FY10-15.  #
  • Mental and behavioral health education and training grants: Awards grants to schools for the development, expansion, or enhancement of training programs in social work, graduate psychology, professional training in child and adolescent mental health (including APA-supported coverage of child and adolescent psychiatrists), and pre-service or in-service training to paraprofessionals in child and adolescent mental health.  # 

Impact on Patients:
Private Insurance Reforms
  • State-based exchanges: Beginning in 2014, health insurance exchanges will open in each state for individuals and small employers to shop for standardized health packages.
  • High-risk pools: Establishes high-risk pools in 2010 to cover adults with pre-existing conditions.  This will end when the health care exchanges are in place.
  • Individual coverage mandate: Requires virtually all Americans to have health insurance, with significant subsidies for those with lower-incomes.
  • Employer coverage mandate: Beginning in 2014, companies with 50 or more employees must offer coverage to employees or pay a penalty after their first 30 employees.
  • No lifetime or annual limits: Prohibits plans from establishing lifetime limits, and annual limits beginning in 2014, on the dollar value of benefits. Prior to 2014, plans may only establish restricted annual limits as defined by the Secretary of HHS, ensuring access to needed services with minimal impact on premiums.
  • Prohibition of pre-existing condition exclusions or other discrimination based on health status: No group health plan or insurer offering group or individual coverage may impose any pre-existing condition exclusion or discriminate against those who have been sick in the past.  #
  • Extension of dependent coverage: Requires all plans offering dependent coverage to allow unmarried individuals until age 26 to remain on their parents' health insurance.
  • Immediate access to insurance for people with a pre-existing condition: Enacts a temporary insurance program with financial assistance for those who have been uninsured for several months and have a pre-existing condition.  # 
  • Preventive Care: All plans must provide preventive care without deductibles and co-payments by 2018.
Medicaid Changes
  • Expanded Medicaid: Medicaid eligibility increases to 133 percent of poverty, with 100% federal funding to all states for newly eligible Medicaid recipients for three years. Provides additional federal matching funds to states that already cover childless adults in their Medicaid programs.  Eligible individuals include all non-elderly, non-pregnant individuals who are not entitled to Medicare.  #
  • Medicaid coverage for former foster care children: Beginning in 2014, causes the state option to cover former foster children in Medicaid mandatory.  Limits such coverage to children who have "aged out" of the foster care system as of the date of enactment.
  • Primary Care Payments: Requires states to pay for primary care services at the Medicare rate.  APA is seeking inclusion of psychiatrists.  #
Changes in Prescription Drug Coverage under Medicare and Medicaid
  • Closing the Medicare doughnut hole: Medicare patients whose prescription expenses reach the so-called Medicare Part D coverage "doughnut hole" ($2,700 to $6,150) in 2010 will receive a $250 rebate. During the next 10 years, the beneficiary co-insurance rate for this coverage gap will be narrowed in phases from the current 100 percent to 25 percent in 2020.
  • Elimination of exclusion of coverage of certain drugs under Medicaid: Beginning with drugs dispensed on January 1, 2014, smoking cessation drugs, barbiturates, and benzodiazepines would be removed from Medicaid's excludable drug list.  #

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