Passage of the Physician Fee Schedule Update and Improvements Act Could Benefit Licensed Professional Counselors

The Physician Fee Schedule (PFS) are rates set by statute and formula. Physicians and some practitioners are paid the full fee schedule amount (100% of the fee schedule), while other non-physician practitioners are paid a percentage of the fee schedule amount. The fee schedule amount (or sometimes referred to as the Medicare Allowed Amount) that is owed to the healthcare practitioner is paid by both the government (Medicare) and the beneficiary.

Typically, the split is 80/20 – Medicare pays 80% of the fee schedule amount and the beneficiary pays the remaining 20% (coinsurance). For instance, if the fee schedule amount is $10, the physician gets the full $10 (i.e., 100% of the fee schedule), of which Medicare would pay $8 and the beneficiary would pay $2. For Mental Health Counselors (MHC)/Licensed Professional Counselors (LPC) services, Medicare will pay either:

1. 80% of what the MHC /LPC charges for the service OR
2. 75% of what psychologists get paid under the fee schedule -- whichever is less.

In either case, Medicare pays 80% and the beneficiary would pay the other 20%.

Recently the House Energy and Commerce Committee passed H.R. 6545, the “Physician Fee Schedule Update and Improvements Act,” out of committee. The Act was introduced by U.S. Representatives Mariannette Miller-Meeks (IA-1), Larry Bucshon, M.D. (IN-08), Kim Schrier (WA-08), Robin Kelly (IL-02), Ami Bera, M.D. (CA-06), Brad Wenstrup (OH-2), Raul Ruiz, M.D. (CA-25), Michael C. Burgess, M.D. (TX-26), Greg Murphy, M.D. (NC-03), and Tony Cárdenas (CA-29). The legislation makes improvements to the physician fee schedule under the Medicare program. Beginning January 1, 2024, LPCs/MHCs will be able to bill under Medicare and this legislation could eliminate payment cuts physicians and non-physicians. 

The Physician Fee Schedule Update and Improvement Act:
 

• Increases the budget neutrality from $20 million to $53 million which would allow for greater flexibility in determining pricing adjustments for services without leading to harmful payment cuts for doctors. Because the payment structure is budget neutral, doctors regularly face cuts when certain services receive payment increases.
   
• Would bring needed stabilization to reimbursement and update the formula to reflect accurate costs of running a medical practice.

“The existing physician fee schedule structure fuels uncertainty for American doctors, creating significant challenges in practicing amidst soaring inflation. The imminent pay cuts further exacerbate the situation, causing small and independent practices to struggle to keep their doors open,” said Burgess, M.D. “The Physician Fee Schedule Update and Improvements Act is crucial for stabilizing payments and preserving the provider-patient relationship.”

For more information or if you would like to become involved in ACA’s advocacy efforts, please contact the ACA Government Affairs and Public Policy Team at advocacy@counseling.org.