This LCD outlines the medical necessity requirements for Part A and Part B services in the fields of psychiatry, psychology, clinical social work, and psychiatric nursing for the diagnosis and treatment of various mental disorders and/or diseases.
A. Approved Providers of Service
- Physicians (MD/DO)
- Clinical psychologists
- Clinical Social Workers
- Nurse practitioners
- Clinical Nurse Specialists
- Physician Assistants
- Other providers of mental health services licensed or otherwise authorized by the state in which they practice (e.g., licensed clinical professional counselors, licensed marriage and family therapists). These other providers may not bill Medicare directly for their services, but may provide mental health treatment services to Medicare beneficiaries under the "incident to" provision. For more information see the NGS Medical Policy article on Psychological Services Provided "Incident to".
B. General Coverage Requirements:
This section applies to psychiatric services rendered in a hospital outpatient facility, but the medical necessity parameters contained herein may also be applicable to services billed to Part B by individual providers.
Hospital outpatient psychiatric services: The services must be for the purpose of diagnostic study or the services must reasonably be expected to improve the patient's condition. "Incident to" provisions do not apply to professional services performed by Nurse Practitioners (NPs), Clinical Nurse Specialists (CNSs), Clinical Psychologists (CPs), Clinical Social Workers (CSWs) or Clinical Licensed Master's Social Worker (LMSW). Physician assistants (PAs) are required to perform services under the general supervision of a physician. (See 42 CFR 410.71-76.) Psychiatric services provided incident to a physician's service must be rendered by individuals licensed or otherwise authorized by the State and qualified by their training to perform these services.
The services must meet the following criteria:
Individualized Treatment Plan.
The plan must state the type, amount, frequency, and duration of the services to be furnished and indicate the diagnoses and anticipated goals. (A plan is not required if only a few brief services will be furnished.)
Reasonable Expectation of Improvement.
Services must be for the purpose of diagnostic study or reasonably be expected to improve the patient's condition. The treatment must, at a minimum, be designed to reduce or control the patient's psychiatric symptoms so as to prevent relapse or hospitalization, and improve or maintain the patient's level of functioning.
When stability can be maintained without further treatment or with less intensive treatment, the psychological services are no longer medically necessary.
Frequency and Duration of Services.
There are no specific limits on the length of time that services may be covered. There are many factors that affect the outcome of treatment; among them are the nature of the illness, prior history, the goals of treatment, and the patient's response. As long as the evidence shows that the patient continues to show improvement in accordance with his/her individualized treatment plan, and the frequency of services is within accepted norms of medical practice, coverage may be continued.
When a patient reaches a point in his/her treatment where further improvement does not appear to be indicated and there is no reasonable expectation of improvement, the outpatient psychiatric services are no longer considered reasonable or medically necessary.
Mental Health Services provided in a CORF:
Refer to Billing and Coding: Psychiatry and Psychology Services (A56937)
Note: Partial Hospitalization is a distinct and organized intensive treatment program for patients who would otherwise require inpatient psychiatric care. Partial Hospitalization services are not addressed in this policy.
C. Specific Coverage Requirements:
Information in this part of the policy has been divided into seven (7) sections.
- Psychiatric Diagnostic Procedures
- Interactive Complexity
- Psychotherapy in Crisis
- Psychiatric Somatotherapy
- Other Psychiatric Services or Procedures
- Central Nervous System Assessments/Tests (e.g., Neuro-Cognitive, Mental Status, Speech Testing)
Unless otherwise indicated the above procedures may be used by psychiatrists or other physicians trained in the treatment of mental illness (MDs/DOs), clinical psychologists, clinical social workers, clinical nurse specialists and other nurses with special training and/or experience in psychiatric nursing beyond the standard curriculum required for a registered nurse (e.g., Masters of Science in psychiatric nursing, or its equivalent [Advanced Registered Nurse Practitioner with a Master's degree in Mental Health, or equivalent to a Master's prepared, certified Clinical Nurse Specialist]).
Section I. Psychiatric Diagnostic Procedures:
Description: The psychiatric diagnostic procedure requires the elicitation of a complete medical (including past, family, social) and psychiatric history, a mental status examination, establishment of an initial diagnosis, an evaluation of the patient’s ability and capacity to respond to treatment, and an initial plan of treatment. Information may be obtained from not only the patient, but also other physicians, healthcare providers, and/or family if the patient is unable to provide a complete history.
Section II. Interactive Complexity:
Description:“Interactive complexity" refers to specific communication factors that complicate the delivery of a psychiatric procedure. Common factors include more difficult communication with discordant or emotional family members and engagement of young and verbally undeveloped or impaired patients.” (CPT 2013, Professional Edition, p.483)
Interactive complexity is principally used to evaluate children and also adults who do not have the ability to interact through ordinary verbal communication. The healthcare provider uses inanimate objects, such as toys and dolls for a child, physical aids and non-verbal communication to overcome barriers to therapeutic interaction, or an interpreter for a person who is deaf or one who does not speak the same language as the healthcare provider.
Interactive complexity may also be used in the evaluation of adult patients with organic mental deficits, or for those who are catatonic or mute.
Interactive complexity may be reported with psychotherapy when at least one of the following is present:
- Maladaptive communication (eg, high anxiety, high reactivity, repeated questions or disagreement)
- Emotional or behavioral conditions inhibiting implementation of treatment plan
- Mandated reporting/event exists (eg, abuse or neglect) or
- Play equipment, devices, interpreter, or translator required due to inadequate language expression or different language spoken between patient and professional.
Section III. Psychotherapy Psychiatric Therapeutic Procedures:
Information in this part of the policy has been subdivided into three (3) sections. These sections address the following:
- Insight oriented, behavior modifying, supportive, and/or interactive psychotherapy
- Psychoanalysis, group psychotherapy, family psychotherapy, and/or interactive group psychotherapy
- Narcosynthesis for psychiatric diagnostic and/or therapeutic purposes
A. Insight oriented, behavior modifying, supportive, and/or interactive psychotherapy
Psychotherapy is defined as "the treatment for mental illness and behavioral disturbances in which the physician or other qualified health care professional through definitive therapeutic communication attempts to alleviate the emotional disturbances, reverse or change maladaptive patterns of behavior and encourage personality growth and development." (CPT 2013, Professional Edition, p.485)
The duration of a course of psychotherapy must be individualized for each patient. Prolonged treatment may be subject to medical necessity review. The provider must document the medical necessity for prolonged treatment.
Comments: While a variety of psychotherapeutic techniques are recognized for coverage, the services must be performed by persons authorized by their state to render psychotherapy services. Healthcare providers would include: physicians, clinical psychologists, registered nurses with special training (as described in the "Indications" section), and clinical social workers. Medicare coverage of psychotherapy does not include teaching grooming skills, monitoring activities of daily living (ADL), recreational therapy (dance, art, play) or social interaction. Therefore, psychotherapy codes should not be used to bill for ADL training and/or teaching social interaction skills.
B. Group psychotherapy, family psychotherapy, and/or interactive group psychotherapy
The practice of psychoanalysis involves using special techniques to gain insight into and treat a patient's unconscious motivations and conflicts using the development and resolution of a therapeutic transference to achieve therapeutic effect. It is a different therapeutic modality than psychotherapy.
Comments: The physician or other healthcare professional using this technique must be trained by an accredited program of psychoanalysis.
Group psychotherapy, family psychotherapy, and/or interactive group psychotherapy:
Description: Services involving the treatment of the family unit when maladaptive behaviors of family members are exacerbating the beneficiary's mental illness or interfering with the treatment, or to assist the family in addressing the maladaptive behaviors of the patient and to improve treatment compliance.
Comments: Family psychotherapy services are covered only where the primary purpose of such psychotherapy is the treatment of the patient's condition. Examples include:
- When there is a need to observe and correct, through psychotherapeutic techniques, the patient's interaction with family members.
- Where there is a need to assess the conflicts or impediments within the family, and assist, through psychotherapy, the family members in the management of the patient.
The term "family" may apply to traditional family members, live-in companions, or significant others involved in the care of the patient.
Facility staff members are not considered "significant others" for the purposes of the LCD.
Multiple-family group psychotherapy is generally non-covered by Medicare. Such group therapy is usually directed to the effects of the patient's condition on the family and its purpose is to support the affected family members.
Psychotherapy administered in a group setting:
Description: Psychotherapy administered in a group setting, involving no more than 12 participants, facilitated by a trained therapist simultaneously providing therapy to these multiple patients. The group therapy session typically lasts 45 to 60 minutes. Personal and group dynamics are discussed and explored in a therapeutic setting allowing emotional catharsis, instruction, insight, and support.
Comments: Group therapy, since it involves psychotherapy, must be led by a person who is licensed or otherwise authorized by the state in which he or she practices to perform this service. This will usually mean a psychiatrist, psychologist, clinical social worker, clinical nurse specialist, or other person authorized by the state to perform this service. Registered nurses with special training, as described in the "Indications and Limitations of Coverage and/or Medical Necessity" section, may also be considered eligible for coverage. For Medicare coverage, group therapy does not include: socialization, music therapy, recreational activities, art classes, excursions, sensory stimulation or eating together, cognitive stimulation, or motion therapy, etc.
C. Narcosynthesis for psychiatric diagnostic and/or therapeutic purposes.
Description: Narcosynthesis is defined as the administration of sedative or tranquilizer drugs, usually intravenously, to relax the patient and remove inhibitions for discussion of subjects difficult for the patient to discuss freely in the fully conscious state.
Section IV. Psychotherapy in Crisis:
Description: "Psychotherapy for crisis is an urgent assessment and history of a crisis state, a mental status exam, and a disposition, The treatment includes psychotherapy, mobilization of resources to defuse the crisis and restore safety, and implementation of psychotherapeutic interventions to minimize the potential for psychological trauma. The presenting problem is typically life threatening or complex and requires immediate attention to a patient with high distress." (CPT 2013, Professional Edition, p.486)
Section V: Psychiatric Somatotherapy:
Description: Psychiatric Somatotherapy, electroconvulsive therapy (ECT), is described as the application of electric current to the brain, through scalp electrodes to produce a seizure. It is used primarily to treat major depressive disorder when antidepressant medication is contraindicated and for certain other clinical conditions.
Section VI: Other Psychiatric Services:
A. Description: Individual psychophysiological therapy incorporating biofeedback training by any modality (face to face with patient), with psychotherapy (e.g., insight-oriented, behavior-modifying or supportive psychotherapy)are not covered by Medicare .
Comments: Medicare does not cover biofeedback for the treatment of psychosomatic disorders.
B. Description: Hypnotherapy. Hypnosis is an artificially induced alteration of consciousness in which the patient is in a state of increased suggestibility.
Note: Environmental intervention for medical management purposes on a psychiatric patient's behalf with agencies, employers, or institutions is not covered by Medicare.
C. Description: Psychiatric evaluation of hospital records, reports, testing, or data for diagnosis. A physician or advanced mental health practitioner may be asked to do a review of records for psychiatric evaluation without direct patient contact. This may be accomplished at the request of an agency or peer review organization. It may also be employed as part of an overall evaluation of a patient's psychiatric illness or suspected psychiatric illness, to aid in the diagnosis and/or treatment plan.
D. Description: Reporting of examinations, procedures, and other accumulated data. The treatment of the patient may require explanations to the family, employers, or other involved persons for their support in the therapy process.
E. Description: Preparation of reports for insurance companies, agencies, courts, etc.
Comments: Administrative services that do not involve face to face contact with the patient and are considered bundled services and are not separately payable by Medicare.
Section VII: Central Nervous System Assessments/Tests (e.g., Neuro-Cognitive, Mental Status, Speech Testing).
A. Description: Psychological testing includes the administration, interpretation, and scoring of the tests and other medically accepted tests for evaluation of intellectual strengths, psychopathology, psychodynamics, mental health risks, insight, motivation, and other factors influencing treatment and prognosis.
Comments: These tests do not represent psychotherapeutic modalities, but are diagnostic aids. Use of such tests when mental illness is not suspected would be a screening procedure not covered by Medicare. Each test performed must be medically necessary. Therefore, standardized batteries of tests are not acceptable unless each test in the battery is medically necessary.
Changes in mental illness may require psychological testing to determine new diagnoses or the need for changes in therapeutic measures. Repeat testing not required for diagnosis or continued treatment would be considered medically unnecessary. Nonspecific behaviors that do not indicate the presence of, or change in, a mental illness would not be an acceptable indication for testing. Psychological or psychiatric evaluations that can be accomplished through the clinical interview alone (e.g., response to medication) would not require psychological testing, and such testing might be considered as medically unnecessary. Adjustment reactions or dysphoria associated with moving to a nursing facility do not constitute medical necessity for psychological testing.
B. Description: Neuro-Cognitive, Mental Status, Speech Testing.
Testing which is intended to diagnose and characterize the neurocognitive effects of medical disorders that impinge directly or indirectly on the brain. Examples of problems that might lead to neuropsychological testing are:
- Detection of neurologic diseases based on quantitative assessment of neurocognitive abilities (e.g., mild head injury, anoxic injuries, AIDS dementia)
- Differential diagnosis between psychogenic and neurogenic syndromes
- Delineation of the neurocognitive effects of central nervous system disorders
- Neurocognitive monitoring of recovery or progression of central nervous system disorders; or
- Assessment of neurocognitive functions for the formulation of rehabilitation and/or management strategies among individuals with neuropsychiatric disorders.
Comments: The content of neuropsychological testing procedures differs from that of psychological testing in that neuropsychological testing consists primarily of individually administered ability tests that comprehensively sample cognitive and performance domains that are known to be sensitive to the functional integrity of the brain (e.g., abstraction, memory and learning, attention, language, problem solving, sensorimotor functions, constructional praxis, etc.). These procedures are objective and quantitative in nature and require the patient to directly demonstrate his/her level of competence in a particular cognitive domain. Neuropsychological testing does not rely on self-report questionnaires such as the Minnesota Multiphasic Personality Inventory 2 (MMPI-2), rating scales such as the Hamilton Depression Rating Scale, or projective techniques such as the Rorschach or Thematic Apperception Test (TAT) when questions of how brain damage or degenerative disease processes (e.g. right hemisphere CVA) may be affecting emotional expression or how significant emotional distress or mood impairment might be affecting cognitive function (e.g. question of presence of "pseudodementia") arise.
Typically, psychological testing will require from four (4) to six (6) hours to perform, including administration, scoring and interpretation. Supporting documentation in the medical record must be present to justify greater than 8 hours per patient per evaluation. If the testing is done over several days, the testing time should be combined and reported all on the last date of service. If the testing time exceeds eight (8) hours, medical necessity for extended time should be documented. Medical records may be requested.
Severe and profound intellectual disabilities are never covered for psychotherapy services or psychoanalysis. In such cases, rehabilitative, evaluation and management (E/M) codes should be reported.
Patients with dementia represent a very vulnerable population in which co-morbid psychiatric conditions are common. However, for such a patient to benefit from psychotherapy services requires that their dementia be mild (e.g., Mini Mental Status Examination score above 15) and that they retain their capacity to recall the therapeutic encounter from one session, individual or group, to another. This capacity to meaningfully benefit from psychotherapy must be documented in the medical record. Psychotherapy services are not covered when documentation indicates that dementia has produced a severe enough cognitive defect to prevent psychotherapy from being effective.
Any diagnostic or psychotherapeutic procedure rendered by a practitioner not practicing within the scope of his/her licensure or other State authorization will be denied.
Psychiatric services billed under the hospital outpatient benefit must be provided in distinct outpatient settings. Outpatient hospital services provided in conjunction with inpatient services, or under the auspices of an excluded inpatient unit, residential treatment center, residential facility, or skilled nursing facility, are not in compliance with Medicare regulations and payment will be denied. Payment may be made for psychiatric services in these settings by individual providers billing Part B.
The following services do not represent reasonable and necessary outpatient psychiatric services:
- day care programs, which provide primarily social, recreational, or diversional activities, custodial or respite care;
- programs attempting to enhance emotional wellness, e.g., day care programs;
- services to a skilled nursing facility resident that should be expected to be provided by the nursing facility staff;
- vocational training when services are related solely to specific employment opportunities, work skills, or work settings;
- biofeedback training for psychosomatic conditions;
- recovery meetings such as Alcoholics Anonymous, 12 Step, Al Anon, Narcotics Anonymous, due to their free availability in the community;
- telephone calls to patients, collateral resources and agencies;
- evaluation of records, reports, tests, and other data;
- explanation of results to family, employers, or others;
- preparation of reports for agencies, courts, schools, or insurance companies, etc. for medicolegal or informational purposes;
- screening procedures provided routinely to patients without regard to the signs and symptoms of the patient’s mental illness.
The following services are excluded from the scope of outpatient hospital psychiatric services:
- services to hospital inpatients;
- meals, transportation;
- supervision or administration of self-administered medications and supplying medications for home use.
Evaluations of the mental status that can be performed within the clinical interview, such as a list of questions concerning symptoms of depression or organic brain syndrome, corresponding to brief questionnaires such as the Folstein Mini Mental Status Examination or the Beck Depression Scale, should not be billed as psychological testing, but are considered included in the clinical interview.
Adjustment reactions or dysphoria associated with moving to a nursing facility do not constitute medical necessity for psychological testing. However, if a more serious mood disorder (e.g., major depression) is suspected upon admission to a nursing facility, psychological or neuropsychological testing may be indicated for differential diagnostic purposes and to develop appropriate treatment planning.
Routine testing of nursing home patients is considered screening and is not covered.
Each psychological test administered must be individually medically necessary. A standard battery of tests is only medically necessary if each individual test in the battery is medically necessary.
Psychological testing should not be reported by the treating physician for only reading the testing report generated by another clinician or explaining the results of a neuropsychological assessment generated by another clinician to the patient or family. Payment for these services is included in the payment for other services rendered to the patient, including both services provided by neuropsychologists and psychologists and evaluation and management services billed provided by physicians, e.g., neurologists, rehabilitation medicine physicians, and psychiatrists.
Psychological testing is limited to physicians, clinical psychologists, and on a limited basis, to qualified non-physician practitioners (e.g., speech language pathologists for aphasia evaluation).
General Comments Regarding Coverage of Outpatient Hospital Diagnostic and Therapeutic Services:
Therapeutic services defined as hospital services and provided by a hospital on an outpatient basis are incident to the services of physicians in the treatment of patients.