Trends in Medicare Part B Mental Health Utilization and Expenditures: 1987-92

This article examines the impact of expanding Medicare Part B coverage of mental health services, based on analysis of 6 years of Medicare Part B claims data (1987-92). Inflation-adjusted per capita spending more than doubled (from $9.91 to $21.63) following the elimination of the annual outpatient treatment limit and extension of direct reimbursement to clinical psychologists and social workers. There was a 73-percent increase in the user rate (from 23.25 to 40.20 per 1,000 Medicare beneficiaries), and a 27-percent increase in the average number of services per user (from 8.9 to 11.3). Mental health spending increased from 1 percent to 2 percent of expenditures for Part B professional services. Ongoing monitoring of mental health utilization is desirable to ensure that recent access gains are not eroded with the increasing shift to managed care and implementation of gatekeeper mechanisms.