Arkansas spends $148 million on one psychotherapy code, far more than other states

Arkansas’ Medicaid program spent $148 million on one group psychotherapy billing code from 2013-15, far more than other states, thanks to policies that don’t limit the amount of patient visits and made it possible for providers to bill $1,000 for an hour-and-a-half of group session time.

The revelation was made by Elizabeth Smith, the state’s Medicaid inspector general, during testimony Wednesday before the Health Reform Legislative Task Force.

The $147,961,241 spent by Arkansas on billing code 90853 compares to much smaller amounts spent in other states who are members of the same Centers for Medicare & Medicaid Services zone: $8.3 million spent in Alabama; $3.4 million spent in Georgia; $7.8 million in Mississippi; $504,000 spent in Louisiana; $1.8 million in Tennessee; and $445,000 in West Virginia, Smith told legislators. Even when adding other codes that could have been used for similar services, Georgia spent about $33 million – less than a fourth of Arkansas – and Georgia serves more people.

“So we think there’s an opportunity there,” she said.

Arkansas’ high rates are caused by a variety of factors. For example, Arkansas has no limits on the amount of visits a patient can do in a year. Because Arkansas allows up to 12 adults in one group session, providers were able to bill about $1,000 for an hour-and-a-half session. Groups with participants under age 18 can be as big as 10 people.

Smith’s office offered three recommendations: reducing maximum payments per recipients from $82.80 to $40 per day, which would be about the same as in other states; capping billing units at 60 minutes per day instead of 90; and capping units at 150 per year. If those three changes had been implemented in 2013, it would have saved more than $107 million over that three-year period and would save $35 million a year moving forward.

Smith said her office, which was created in 2013, learned of the issue while investigating two cases where the recipients had unusually high billings. Both of those cases have since been arrested and charged.

Sen. Gary Stubblefield, R-Branch, asked why it took so long to discover the spending discrepancy. Department of Human Services Director John Selig said group psychotherapy is one of hundreds of programs managed by his agency. He said DHS now has more capacity to look into such issues.

A reform package was proposed for public comment in 2014, but consensus was not obtained and, with a new governor coming into office, the decision was made to halt the process.

John Stephen of The Stephen Group, the task force’s consultant, said DHS attempted to pass rate review rules changes in 2011, but it was not passed through the legislative process.