No American Insurance Company Reimbursement Keeps Up With Inflation

Recently I’d tweeted this data-supported proposition and asked to be proven wrong. So far, no one’s done so.

But a friend asked if I could push the data back further, believing the track record would look even worse. I did. She’s right.

​A 60 minute psychotherapy session was nationally priced in Medicare at ​$144.99 in 2000.*

Which means that 2021 is the first year the Medicare reimbursement for 60 minutes of psychotherapy has exceeded the highest prior rate ($151.12) seen in 2001. That is, the highest in 20 years.​​ And that rate is nowhere near what it would have been had the value in 2000 been adjusted by the simple rate of inflation during those years. Had the rate kept up with inflation, the 2021 value (in Medicare) would be $224.68. In other words, the 2021 actual national reimbursement value of $152.48 is 32% below where it should be, if only adjusted by inflation.

I believe this is happening across all payers, for all health procedures. No American insurance company has even matched inflation in reimbursement for any health procedure. Especially mental health care.

Prove me wrong.


*Technically, there was no way — i.e., no standard procedure [CPT] code — to bill a 60 minute session before 2013. My method compares the pre-2103 reimbursement for a 75-80 minute session to the reimbursement since 2013 for a 60 minute session. These two session lengths are comparable based on the relative value units which underlie pricing.

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