TITLE: Declining Psychotherapy Reimbursement in Inflation-Adjusted Dollars & the Inability of Psychotherapists to Collectively Bargain or Really Have Any Power at All in Their Reimbursement

(Posted for anonymous author by Michael Reeder LCPC – I did not write it myself but wish I did :) )

My Medicare reimbursement for 45 minutes of psychotherapy in 1990 was $86.82 (in my region -- I have billing records back to 1985, but Medicare did not contract with psychologists until 1990). Currently it is $91.38 (Santa Barbara County), but minus 2% sequestration, it is actually $89.55.

You can find your region's version by searching 2023 Medicare Physician Fee Schedule (using the name of your state -- and also searching reimbursement rates by year). 

Using the US Bureau of Labor Statistic's inflation calculator

https://www.bls.gov/data/inflation_calculator.htm

which BTW is the most conservative with regard to inflation.

$86.82 in 1990 had the same buying power as $204.05 today. $89.55 divided by $204.05 equals 44% -- i.e., a pay cut of 56%.

In year 2000, in my region Medicare paid $95.89 for 45 minutes of psychotherapy (then coded 90806, now coded 90834). 

Using the CPI inflation calculator, $95.89 in year 2000 had the same buying power as $169.89 today. In my region, Medicare currently pays $105.02 for 90834 -- but reduced 2% for sequestration, actually pays $102.92. $102.92 divided by $169.89 = 61%, so only a 39% pay cut. That also tells us that reimbursement dropped 17% between 1990 and year 2000.

The biggest impediment to negotiating with insurers is a legal precedent from the late 1970's that prohibits psychotherapists from engaging in collective bargaining. Theoretically under the Sherman Act of 1890, we might form 'trusts' to set fees and control the market.

As absurd as this sounds, it has become even more absurd since the advent of managed health care in the 1980's and our ability to participate as Medicare providers in 1990. 

Insurers create contracts in which they unilaterally set reimbursement rates, documentation requirements and other working conditions. Although we are all given the same contract, and are thus treated as a class of workers, we are legally prohibited from negotiating contracts as a group of workers.

Last week, I wrote (again) to APA's legal team, asking them to prioritize this issue. Historically, professional associations beg off, arguing that they lack the resources to take on trillion dollar a year private insurance corporations, much less the federal government.

Please let your professional associations know that the right to collective bargaining is a crucial issue, and in the context of reimbursement that is less than half what it was in 1990, perhaps the criterion issue for the survival of our profession.
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