The E-Therapy Revolution for Medicare Beneficiaries

One of the promises of the information technology revolution is disintermediation: basically the removal of middlemen from the supply chain, which reduces costs and increases convenience (which also adds tangible value) to a given transaction.

When it comes to psychotherapy or psychological testing services, middlemen abound. Office space isn’t cheap, and frequent no-shows add significantly to overhead. There’s often travel to and from the office for both the patient and the professional (unless the professional travels to the patient’s house, which is not uncommon in geropsychology).

Finally, there’s the issue of third-party-payors, such as HMOs, PPOs, and overwhelmingly in my field, Medicare. For psychologists and other mental health professionals, reimbursement rates for office visits continue to decline in markets across the U.S. (such has here, here, here, and here…. heck, it’s happening everywhere). Medicare also continues to threaten steep pay cuts for psychological services rendered to beneficiaries.  Over the past few years when raises have occurred, they are typically well below any rational cost of living increase (e.g., 1%).

So what is a psychologist to do? This is where so-called “e-therapy” comes in. As opposed to about 10 years ago, this is no longer a fringe idea. As the name implies, “e-therapy” is the act of delivering psychotherapy services over secure online communication, such as online chat, voice-over-IP, videoconferencing technology, email, discussion boards, or any combination of the above.

Naturally, there was much concern voiced about the ethics of such ventures; for example, how do you deal with all of the privacy concerns and regulations (e.g., HIPAA), or how do you address the issue of someone who presents for therapy if they are suicidal? Increasingly, answers to these questions are becoming clearer, although a consensual standard of ethical guidelines for “e-therapy” has yet to develop.

So again, one of the great promises of e-therapy, given the above, is that a therapist can maximize the shrinking reimbursement dollar by delivering services over the Internet. However, not all insurance companies reimburse for e-therapy services (although many do), which makes this a potentially complex move for a therapist to take if they are moving from a traditional “bricks and mortar” practice.

What about for a geropsychologist? Keep in mind that for us geropsychology professionals, because of how Medicare works, we have an enormous amount of difficulty providing any services outside of the Medicare reimbursement system (essentially Medicare monopolizes the funding of medical services for Americans over the age of 65).

But wait, will older adults even use the internet for therapy? Evidence says they do. In fact, they are one of the most rapidly-growing demographic group of internet users out there. Even better, unlike many insurance companies, Medicare does provide a reimbursement mechanism for provision of ‘e-therapy’ services. This is great – particularly considering the fact that many older adults are less mobile, and offering them the ability to access mental health services in their homes may be a particularly valuable service.

So here’s the problem – Medicare has designed the billing mechanism for e-therapy to be unfortunately rather complex and difficult for most sole practicioners (who often are the most energetic entrepreneurs in the mental health world) to take advantage of. First off, therapists can’t deliver psychotherapy services to their Medicare clients in their home, it has to be from an authorized ‘originating site,’ such as a doctor’s office, hospital, clinic, or nursing home. Second, these sites have to be located in predesignated Health Professional Shortage Area. So, for example, an older adult with mobility issues, living in a metropolitan center, who may have trouble going to a psychologists office, can not currently be offered e-therapy in his or her home as a Medicare beneficiary.

This seems like a shortcoming of the Medicare e-therapy codes that will need to be corrected. Again, Medicare reimbursements for practicioners are dropping, overhead is rising, and older adults are becoming more and more internet-savvy. This is an opportunity which needs to be capitalized on.

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