APA Willing to Sue Insurers Over CPT Code Violations

Legal Action May Be Taken When Mental Health Parity Law Is Violated

Deborah Brauser

April 04, 2013

Clinicians are being urged to register with the American Psychiatric Association (APA) any incidents they have encountered with insurers refusing to pay for services in accordance with the new psychiatry section of the American Medical Association's (AMA's) Current Procedural Terminology (CPT) codes — in hope that the organization can help solve problems or, if needed, initiate litigation.

Although the new billing and documentation codes went into effect January 1 of this year, there have been reports that some insurance companies have been rejecting bills or reducing rates because of misunderstandings or disagreements over the codes.

"CPT code changes were intended to more accurately reflect the work psychiatrists do and improve patient access to care, but instead have been used as an excuse by some payers to discriminate against psychiatric patients and their psychiatrists in violation of the Mental Health Parity and Addiction Equity Act," states the organization in an email communiqué sent to APA members last week.

The memo goes on to state that the APA Board of Trustees has committed the finances and staff needed to first understand a particular situation and then to correct the abuses "using all reasonable means, including litigation."

"We believe that the whole process and manipulation of rates is a means to deny access to care and mental health treatment to people who are already paying for it," Colleen M. Coyle, general counsel for the APA, told Medscape Medical News.

"We've had members from all areas of the country who are part of all different kinds of networks calling and saying, 'What do we do?' "

She noted that the Mental Health Parity Act has not been litigated before. So moving forward to force compliance could be potentially groundbreaking.

"There are regulations with the Act that we think are crystal clear in saying that rate disparities are a nonquantitative treatment limitation that results in a denial of access to care. It's actually black and white, and we think that we have a pretty strong argument on behalf of our members and their patients," said Coyle.

MDs in Financial Jeopardy

As reported last year by Medscape Medical News, the new CPT codes were expected to lead to numerous changes in clinical practice, including billing processes, workflow, and management systems.

Still, Jeremy S. Musher, MD, medical director for psychiatric emergency services at the Western Psychiatric Institute and Clinic at the University of Pittsburgh School of Medicine in Pennsylvania, said at the time that this year's extensive codes were much needed.

"There's been an increased intensity of services due to increases in patient comorbidities. We've also felt there's been an inadequate code structure to account for varying levels of psychotherapy and medical management," said Dr. Musher, who also represented the APA as an alternate advisor to the AMA's CPT Advisory Committee.

After a review process that started in 2011, the AMA announced the new codes last September and decreed that insurers needed to establish pricing for services completed after the January 1 implementation.

"Frankly, everyone's known about these changes coming down the pike for a long time, and there shouldn't have been a problem with implementation. And it turns out that psychiatrists were actually pretty well prepared and understood how they should be billing with the crosswalk between the old and new codes," said Coyle.

"But they were finding that their bills were getting rejected because insurance companies were saying things like, 'You can bill to the E/M [evaluation and management] code, and that's fine, but we're not going to pay you for psychotherapy.' Or some companies were saying they just weren't going to recognize the codes at all."

Coyle added that these latter companies would then say they would come up with their own way to address these issues, which is a violation of the Health Insurance Portability and Accountability Act (HIPAA). Other insurers have recognized that codes for psychotherapy and E/M are separate — but have then gone on to reduce the rates for both.

In addition, she reported that because some insurers have not even sent out rate sheets yet, clinicians have not known about any problems until their bills get bounced back.

Some insurance companies have not paid 1 penny in reimbursements.... So some doctors have needed to borrow money or taken second mortgages on their houses to keep their practices going. Colleen M. Coyle

"Plus, some insurance companies have not paid 1 penny in reimbursements for the last 3 months because they say they can't pay until their glitches get fixed. So some doctors have needed to borrow money or taken second mortgages on their houses to keep their practices going."

Discouraging Access to Care?

"Insurance companies have taken the opportunity, we believe, to basically discourage access to psychiatric care. When the new rate information came out, there were a lot of psychiatrists saying they couldn't work for that amount of money and couldn't be part of certain networks anymore," said Coyle.

"This means that patients who are getting health coverage from these particular insurers aren't going to have access to care unless they pay for it out of their own pockets," she explained.

Coyle noted that these issues are especially complicated because they vary from state to state and from carrier to carrier — and even within a company, based on the state in which they are located.

"So we're trying to get our arms around what the similarities and differences are," she said.

"To be fair, some companies seem to have just messed up in how they put the codes into their software and how they calculated the algorithms for payment rates. And a few have agreed to go back to the drawing board and figure this out the right way. We haven't seen the results of that yet, but we're guardedly optimistic they'll do the right thing."

However, other companies have not been so agreeable. That is why it is so important for clinicians to report incidents to the APA, said Coyle. Not only will it give a better overall view of what is going on around the country, it could also allow the organization to step in and help sort things out, if possible, before going to litigation.

"That's our goal. We are in the process of collecting information every day. And once we're able to put all the pieces together for a particular company, we send them a letter telling them what we think is wrong and ask for changes. But I believe some companies see this as a good opportunity to reduce their costs and reduce the use of the mental health system," she said.

She added that enforcement is especially important now that the Affordable Care Act, which Mental Health Parity is part of, will be coming into effect.

I think it's time for the courts to step in. We don't think there's any ambiguity about what all of this means, but apparently insurance companies do. Colleen M. Coyle

"We need some answers, and I think it's time for the courts to step in. We don't think there's any ambiguity about what all of this means, but apparently insurance companies do."

Psychiatrists Urged to "Step Up"

In the email to its members, the APA strongly urged psychiatrists to register complaints with the organization and also be willing to participate as a plaintiff in any resulting lawsuit.

"This would require very little of your time and be at APA's expense," the organization noted.

The APA reports that it has already begun actions against insurers in the states of California, Connecticut, and New York.

"It's difficult to enforce mental health parity because typically you would want to have a patient as a plaintiff. But they aren't the first people to step up and pick a fight. Stigma surrounding mental illness really discourages them from trying to get what they paid for," said Coyle.

"Continuing therapy is expensive, but it works. If insurance companies are going to push to buy their insurance because it provides a mental health benefit and they charge you for it, they should be required to give it to you and not put up obstacles," she concluded.

The online complaint forms can be found and completed on the APA's Web site, or clinicians can send details about any CPT coding payment problem by email to cptparityabuses@psych.org.


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