Medicare battles depression: Payment parity aims to increase treatment

The many Medicare patients who are depressed have inadequate coverage for mental illness, doctors say. That situation is changing.

By Charles Fiegl — Posted Sept. 5, 2011

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From a medical standpoint, the symptoms of clinical depression have been known since ancient times -- Hippocrates referred to the condition as melancholia in Greece more than 2,000 years ago. But for some physicians and other mental health professionals, it wasn't until this year that the U.S. government took the steps needed to bring coverage for depression and other mental health disorders into the modern age.

Depression is becoming a higher priority for Medicare, which soon will pay physicians for the early detection of this common illness. Medicare payment for mental health treatment, which for decades placed a higher out-of-pocket burden on patients than treatment for physical disorders, soon will be put on par with the program's other areas of coverage.

To professionals who are treating seniors and disabled people for depression -- or who want to be doing more -- the moves are long overdue. Every community in the U.S. includes patients with depression, and many are seniors. One in six persons older than 65 has the condition, according to a recent Centers for Medicare & Medicaid Services memo.

Rates of depression in the elderly vary among areas of the country and population groups. For instance, depression is diagnosed more frequently in women than in men. A recent analysis of 2008 Medicare claims concluded that the Miami metropolitan area has the highest diagnosis rate in the country, with depression affecting nearly 23% of beneficiaries.

If left untreated, depression can be deadly for seniors. More than 90% of all suicides stem from depression and other mental disorders, or from substance abuse, according to the National Institute of Mental Health. And elderly adults, particularly white males, have higher rates of suicide than younger men and women. The institute reported 47 suicide deaths per 100,000 people among white men 85 or older in 2007 -- well above the national rate of 11.3 suicides per 100,000 people. The highest rates of suicide are among older white men who are divorced or widowed.

Medicare always has covered treatment of mental illness. But starting Jan. 1, 2012, the program also will cover preventive screenings for depression and, in a separate policy proposal, alcohol misuse.

The American Medical Association, the American Psychiatry Assn. and other organizations had encouraged CMS to cover such screenings. The agency is expected to finalize the coverage proposals this year.

"Medicare coverage of annual screening for depression and alcohol misuse, along with behavioral counseling or other treatment interventions for those that screen positive, is an important step to increase the diagnosis and treatment of these debilitating and often undertreated diseases," said AMA President-elect Jeremy A. Lazarus, MD, a psychiatrist in Denver.

Coverage would improve recognition and treatment of depression, wrote APA Medical Director and CEO James Scully Jr., MD, in a March letter to CMS. It would encourage physicians, especially primary care doctors, to use integrated care models for managing depression and screen patients with general medical conditions that can be linked to depression. "Most depressed patients will present to their primary care physician with somatic complaints rather than complaining of a depressed mood," he wrote. "Routine screening can thus be a vital tool in detecting unreported symptoms of depression."

Patients with depression that goes unrecognized and untreated tend to spend longer times in hospitals, said Allan Anderson, MD, president of the American Assn. for Geriatric Psychiatry. Depression also exacerbates morbidities, functional disabilities and health care costs, and it can interfere with patients' management of chronic physical conditions. For example, diabetics may pay less attention to blood sugar levels, or heart disease patients may neglect to take prescribed hypertension medications.

Pay parity within sight

Medicare patients must pay a larger portion of the bill for their mental health services compared with other office visits and procedures. Before 2010, Medicare patients paid half of the bill, while Medicare covered the rest. For most other outpatient services, beneficiaries are responsible for only 20% of the allowed charges.

Such an unfair payment policy on mental health adversely affects poorer segments of the patient population, Dr. Anderson said. Secondary insurance policies will pay the balance of a therapy or counseling visit, but patients who cannot afford Medigap plans must pay the balance out of their own pockets.

"It's a disincentive and has caused reduced access to beneficiaries," Dr. Anderson said.

Congress passed a law in 2008 to change the 50-50 arrangement for mental health services. The Medicare Improvements for Patients and Providers Act transitions mental health patients from a 50% co-pay to a 20% co-pay by 2014. The co-pay is down to 45% this year.

Patients who are most hurt by the sunsetting payment policy are those eligible for both Medicare and Medicaid, said Margaret Norris, PhD, a psychologist in College Station, Texas. Some Medicaid programs won't pick up the additional costs borne by these relatively poor and sick dual eligibles. "Some patients don't receive care because of the co-pay," she said.

Despite the longtime payment parity issue, Medicare gets high marks from physicians for mental health care coverage, said Sam Muszynski, the APA's director of health care systems and financing. Physicians encounter higher denial rates for private insurance claims involving mental health treatment than for Medicare claims.

Still, some physicians say the current Medicare fee-for-service system is not conducive to tackling depression rates in the U.S. They say alternative payment systems, such as a medical home model in which a primary care physician closely coordinates care with nurses, social workers, psychologists and other professionals, would be more ideal.

Tropical depression

Physicians practicing in areas of the country where depression rates for seniors are the highest said they were not surprised to see that their areas topped the list. Anecdotally, depression among Miami's elderly is apparent.

Successful couples often retire to Florida from the Northeast, said geriatric psychiatrist Charles Nemeroff, MD, PhD, the Leonard M. Miller Professor and chair of the Dept. of Psychiatry & Behavioral Sciences at the University of Miami. Such couples may have a new home, golf courses and pleasant weather, but it comes at the cost of leaving an extended family and network of friends.

Perhaps the husband always had been busy at work, but now he mostly plays golf, goes fishing and discovers it's harder to make new friends at 70 than at 35. Meanwhile, his wife easily makes friends in the community. The husband feels he has lost his way and is out of his comfort zone. Worse, the recent economic recession drained a large part of his retirement fund and decreased the value of the retirement home.

"The burden of stress weighs heavily on the body," Dr. Nemeroff said.

In Florida, the numbers also may speak to the fact that Florida has a high percentage of Medicare patients. The state's many senior living communities and nursing homes have caregivers and staff who can recognize signs of depression and notify health professionals. Physicians said high rates of depression diagnoses mean people in the area are receiving needed medical help, not necessarily that the residents are more depressed as a whole.

"We might be more attuned to late-life depression," said Marc Agronin, MD, medical director for mental health and clinical research with Miami Jewish Health Systems.

Florida's notorious track record for Medicare fraud also could be a reason for higher diagnosis rates. Bernd Wollschlaeger, MD, a board-certified family medicine and addiction medicine physician in Miami, said he knows the city has serious cases of mental health problems, but it also has high fraud rates. There have been cases of physicians and clinics cheating Medicare by overutilizing diagnosis codes to justify higher rates, he said.

Finding the right way to screen

Once Medicare starts paying for physicians to screen for depression, the rest will be up to doctors. Those who have experience say the process can be more complicated than diagnosing a strictly physical disorder.

Charles Cutler, MD, a practicing internist in the Philadelphia area for 30 years, has seen his share of depressed patients. In general, depression is a diagnosis he considers when evaluating patients and looking for physical explanations of an illness. "It's always in the back of my mind," he said.

In his view, the worst approach a doctor could take is to tell patients right away that their symptoms are caused by depression. Instead, he suggests asking leading questions that may point to depression underlying physical complaints.

For instance, he said, a patient who comes in with a breathing problem already may suspect that it is not a sign of pneumonia or asthma, but he might be reluctant to admit or suggest that the problem stems from something bothering him. A physician reviews blood tests or x-rays that appear normal, and in the process asks the patient how work is going.

The patient might reveal he doesn't like his job and is not getting along with his wife and children as a result. That opens the door for potential medication and counseling options.

Appropriate Medicare depression screenings will indicate the severity of symptoms within a certain time period, according to the CMS memo. The agency mentions eight screening tools used by physicians, including the Hamilton Depression Rating Scale, the Beck Depression Inventory and the Zung Self-Assessment Depression Scale.

But specifics about how to offer the new preventive coverage would be left up to clinicians. CMS cautions that when it comes to screening patients for depression -- whether they are in Medicare or not -- there is no gold standard for doctors.

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Highs and lows

View in PDF

Click to see data in PDF.

Nearly one in four Medicare patients in the Miami area had a diagnosis of depression in 2008. Physicians point to local efforts aimed at identifying mood disorders, but fraudulent billing also might be helping to drive up the depression diagnosis rate. While seven other U.S. metropolitan areas had depression rates of 14% or more, eight had rates below 8%.

Metropolitan area Rate
Miami 22.6%
McAllen, Texas 15.2%
Akron, Ohio 14.7%
Corpus Christi, Texas 14.5%
Bangor, Maine 14.3%
Worcester, Mass. 14.2%
Covington, Ky. 14.0%
Portland, Maine 14.0%
Honolulu 5.7%
San Mateo County, Calif. 7.0%
San Jose, Calif. 7.0%
Phoenix 7.5%
San Luis Obispo, Calif. 7.6%
Florence, S.C. 7.6%
Anchorage, Alaska 7.6%
Mesa, Ariz. 7.6%

Sources: Centers for Medicare & Medicaid Services, Institute of Medicine

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View in PDF

Click to see data in PDF.

The road to fairness

Medicare is phasing in a 2008 mental health parity statute that lowers the 50% co-payment for outpatient mental health services that has been program policy since 1965. Patients already pay only a 20% co-pay for most outpatient services covered by Medicare.

Year Medicare
2009 50% 50%
2010 55% 45%
2011 55% 45%
2012 60% 40%
2013 65% 35%
2014 80% 20%

Source: American Psychiatric Assn.

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