Medicare recipients receiving mental health outpatient services stand to be negatively affected by the payroll tax legislation passed by Congress, psychologists say. As a result of the new law, which President Obama is expected to sign, payment for Medicare outpatient psychotherapy services will be cut by five percent beginning March 1.

"Some of the most vulnerable in our country will be affected by this law," says Katherine C. Nordal, executive director for the American Psychological Association Practice organization. "These cuts will impact funding not only for psychotherapy outpatient services, but to community behavioral health centers, state hospitals and private hospitals with mental and behavioral health units."

Medicare Part B covers outpatient services for mental health diagnosis and treatment as well as therapy services for in-patients at state and private hospitals. Medicare covers services provided by psychologists and other Medicare approved providers.