Congress acts to expand parity, reverse pay cuts.

Congress moved a step closer to mental health parity under Medicare last month when it overrode a presidential veto of legislation that decreased cost sharing for mental health care and codified coverage of psychiatric medications.

The mental health provisions were part of a larger bill that also stopped a 10.6% cut in Medicare physician payments. The law (H.R. 6331), which earlier had passed both the House and Senate by veto-proof margins, extends the 0.5% Medicare pay increase in place for the first half of 2008 through the end of the year and gives physicians a 1.1% raise for 2009.

Over the next 6 years, the legislation will phase out higher co-payments for mental health services under Medicare Part B from the current 50% for outpatient psychiatric care to 20% in 2014. Other Part B outpatient services have a 20% copayment.

"It fills us to with joy," said Dr. Nada Stotland, president of the American Psychiatric Association and a psychiatrist in Chicago. "We're going to be saving lives here."

The higher coinsurance was not only "stigmatizing," she said, but was a hardship for many seniors. And Dr. Stotland said it's likely that many seniors in need of mental health services didn't seek care because of the higher cost.

Mental health advocates also are celebrating provisions in the bill that relate to Medicare Part D prescription drug coverage. The legislation includes coverage starting in 2013 for benzodiazepines and barbiturates, which had been excluded previously. Dr. Stotland said that while the drugs are abused by a small number of people, they are essential to the management of many psychiatric conditions.

Further, the legislation codifies the current policy that Medicare Part D prescription drug plans must cover "all or substantially all" of the drugs in certain classes. Starting in 2010, the bill directs the Health and Human Services secretary to identify categories and classes of drugs in which restricted access to the medications would have major or life-threatening consequences and those classes and categories for which there is a medical need for individuals to have access to multiple drugs within the same class. Under current regulations, those classes include antipsychotics and antidepressants.

Physician organizations also praised Congress for providing predictable physician payments under Medicare for the next 18 months.

The American Medical Association applauded members of Congress for supporting the bill. But the AMA also is looking to Congress to provide a long-term solution before the end of the 18-month payment fix, said Dr. J. James Rohack, AMA president-elect. Since baby boomers will begin to enroll in Medicare around the same time this pay fix expires, Dr. Rohack said he is hopeful that Congress will be forced to stop moving the issue to the back burner.

Physicians groups have long objected to the Sustainable Growth Rate formula used to calculate physician payments under Medicare. The formula links physician pay to the gross domestic product, and critics say it does not take into account the actual costs of medical practice.

A permanent fix should take into consideration the effort required to care for a patient, in the same way that hospitals receive higher payments for caring for sicker patients, he said. While physicians applaud the efforts of lawmakers to secure a 1.1% increase in payment for 2009, this comes as hospitals are projected to receive a 3% increase in payments from Medicare in 2009.

The legislation is a "step in the right direction," said Robert B. Doherty, senior vice president of governmental affairs and public policy at the American College of Physicians. In addition to the 1.1% Medicare pay increase for 2009, the legislation includes changes in how budget neutrality is calculated that will increase payments for primary care and cognitive services in general.

Physicians also will have the chance to bring in extra income by participating in the Physician Quality Reporting Initiative (PQRI), Medicare's voluntary program. Currently, physicians can earn up to a 1.5% bonus of their total allowed Medicare charges but under the recently passed legislation, the bonuses would be increased to 2%.

In addition to the physician pay and mental health provisions of the bill, Congress made controversial cuts to Medicare Advantage, authorized increased bonus payments under the PQRI, and delayed implementation of the Competitive Acquisition Program for durable medical equipment.

Congress finances the pay increases for physicians in part through cuts to Medicare Advantage plans. Officials at America's Health Insurance Plans, which represents the health insurance industry, estimated that the bill will cut nearly $14 billion from the Medicare Advantage plans over the next 5 years. The inclusion of these cuts in the bill initially slowed its passage in the Senate and caused President Bush to veto the legislation.

The bill also encourages physicians and other providers to use electronic prescribing by providing incentives to those who e-prescribe and imposing penalties on those who do not. The bill calls for providing a bonus of 2% to physicians who use e-prescribing in 2009 and 2010, a bonus of 1% in 2011 and 2012, and a bonus of 0.5% in 2013. Physicians who do not use e-prescribing will be paid 1% less starting in 2012 with that amount increasing to 2% by 2014.

The bill allows the HHS secretary to exempt physicians on a case-by-case basis if complying with e-prescribing would be a "significant hardship," such as a physician practicing in a rural area without sufficient Internet access.

The bill delays the first round of Medicare's new competitive acquisition program until 2009. Critics of the program, which began on July 1, have said that it makes it too difficult for vulnerable seniors to get supplies. The bill also establishes an ombudsman for the program, who would be responsible for responding to complaints and inquiries from suppliers and individuals.

BY MARY ELLEN SCHNEIDER

New York Bureau