For Medicare providers: On payment for mental health services

Psychologists who treat Medicare beneficiaries are encouraged to read a new article from the CMS, summarizing the agency's policy on the delivery of and payment for Medicare services

by Government Relations Staff

August 28. 2008 — Psychologists who treat Medicare beneficiaries are encouraged to read an article issued by the Centers for Medicare and Medicaid Services (CMS) on August 8, 2008. Titled Medicare Payments for Part B Mental Health Services, the article summarizes the agency's policy guidelines on key issues related to the provision of and payment for Medicare services.

Topics include:

  • Qualification requirements for psychologists and other mental health practitioners. 

  • Application of the current outpatient mental health treatment limitation, including which services provided by psychologists are not subject to the limitation. 

  • Coverage of outpatient services provided incident to those of the licensed psychologist when done under the psychologist's direct supervision. 

  • How Medicare defines reasonable and necessary services. 

  • General principles of record documentation, including references to the codes for psychotherapy, testing and assessment, and health and behavior services.

Designed to help practitioners reduce the rate of errors in claims submission, the article includes examples of errors that occur from billing at a level higher or lower than the services actually performed and identifies the failure to document the time involved as one of the principal causes of miscoding.

CMS provided the article on the recommendation of the Office of the Inspector General, which found that 47 percent of the mental health services allowed by Medicare in 2003 did not meet program requirements, resulting in $718 million in improper payments.