Billing and Coding: Outpatient Psychiatry and Psychology Services

Language quoted from Centers for Medicare and Medicaid Services (CMS), National Coverage Determinations (NCDs) and coverage provisions in interpretive manuals is italicized throughout the policy. NCDs and coverage provisions in interpretive manuals are not subject to the Local Coverage Determination (LCD) Review Process (42 CFR 405.860[b] and 42 CFR 426 [Subpart D]). In addition, an administrative law judge may not review an NCD. See Section 1869(f)(1)(A)(i) of the Social Security Act.

Unless otherwise specified, italicized text represents quotation from one or more of the following CMS sources:

Title XVIII of the Social Security Act (SSA):

Section 1862(a)(1)(A) of Title XVIII of the Social Security Act excludes expenses incurred for items or services which are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.

Section 1862(a)(7) of Title XVIII of the Social Security Act excludes routine physical examination.

Section 1833(e) of Title XVIII of the Social Security Act prohibits Medicare payment for any claim which lacks the necessary information to process the claim.

Code of Federal Regulations:

42 CFR, Section 410.32 states that diagnostic tests may only be ordered by the treating physician (or other treating practitioner acting within the scope of his or her license and Medicare requirements).

42 CFR, Section 410.42, describes limitations on coverage of certain services furnished to hospital outpatients.

42 CFR, Section 410.71, describes coverage of clinical psychologist services and supplies incident to a clinical psychologist

42 CFR, Section 410.73 – 410.76, describes coverage of services provided by clinical social workers, physician assistants, nurse practitioners, or clinical nurse specialists.

42 CFR, Section 410.100 – 410.105, describes coverage, exclusions, and requirements for coverage of services furnished to an outpatient at a Comprehensive Outpatient Rehabilitation Facility (CORF).

CMS Publications:

CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 6:

20.4.5 Outpatient Diagnostic Services Under Arrangements

20.5.1 Coverage of Outpatient Therapeutic Services

70.1 Outpatient Hospital Psychiatric Services (General)

70.2 Coverage Criteria for Outpatient Hospital Psychiatric Services

CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 12:

40.7 Social and/or Psychological Services

CMS Publication 100-03, Medicare National Coverage Determinations Manual, Chapter 1:

30.1 Biofeedback Therapy

70.1 Consultations With a Beneficiary’s Family and Associates

130.1 Inpatient Hospital Stays for the Treatment of Alcoholism

130.2 Outpatient Hospital Services for Treatment of Alcoholism

130.3 Chemical Aversion Therapy for Treatment of Alcoholism

130.4 Electrical Aversion Therapy for Treatment of Alcoholism

130.5 Treatment of Alcoholism and Drug Abuse in a Freestanding Clinic

130.6 Treatment of Drug Abuse (Chemical Dependency)

130.7 Withdrawal Treatments for Narcotic Addictions?

160.25 Multiple Electroconvulsive Therapy (MECT)

CMS Publication 100-04, Medicare Claims Processing Manual, Chapter 1:

50.2.2 Frequency of Billing for Outpatient and Services to FIs

CMS Publication 100-04, Medicare Claims Processing Manual, Chapter 12:

150 Clinical Social Worker (CSW) Services

160-160.1 Independent Psychologist Services

170-170.1 Clinical Psychologist Services

This article gives guidance for billing, coding, and other guidelines in relation to local coverage policy L34353 Outpatient Psychiatry and Psychology Services.

General Guidelines for Claims submitted to Part A or Part B MAC:

Procedure codes may be subject to National Correct Coding Initiative (NCCI) edits or OPPS packaging edits. Refer to NCCI and OPPS requirements prior to billing Medicare. For services requiring a referring/ordering physician, the name and NPI of the referring/ordering physician must be reported on the claim. A claim submitted without a valid ICD-10-CM diagnosis code will be returned to the provider as an incomplete claim under Section 1833(e) of the Social Security Act. The diagnosis code(s) must best describe the patient's condition for which the service was performed. For diagnostic tests, report the result of the test if known; otherwise the symptoms prompting the performance of the test should be reported.

General Coding Guidelines for Psychiatry and Psychology Services:

Charges for certain psychiatric services provided by hospital outpatient departments are submitted to the Part A MAC. Services of physicians, clinical psychologists, physician assistants, nurse practitioners, and clinical nurse specialists are billed to the Part B MAC. Services furnished incident to the professional services of clinical psychologists to hospital patients remain bundled with the facility services for payment purposes, with payment made to the hospital for such "incident to" services.

Under certain circumstances, facilities may component bill the services of physicians, clinical psychologists, clinical social workers, and clinical nurse specialists and submit the facility fee services to the Part A MAC with the appropriate revenue and HCPCS codes. Hospitals should be advised that facility fee charges submitted to the Part A MAC must meet the same medical necessity and documentation standards as described elsewhere in the Local Coverage Determination for Psychiatry and Psychology Services.

Individual psychotherapy codes should be used only when the focus of the treatment encounter involves psychotherapy. Psychotherapy codes should not be used as generic psychiatric service codes when another code, such as an E/M or pharmacological management code, would be more appropriate.

If the patient receives primarily psychotherapy and, in addition, pharmacological management at the same visit, the psychotherapy codes, which include evaluation and management, should be used in addition to 90863 for the pharmacological management can be be billed. Please refer to the National Correct Coding Initiative (NCCI) edits.

CPT code 90863 is not intended to be used for the actual administration of medication, nor is it intended to be used for observation of the patient taking an oral medication. Administration and supply of oral medication is not a separately payable service. 

Other Guidelines:

Activity therapy and education and training are not separately paid under OPPS. Activity therapy services are limited to services provided as a component of a PHP. Non-partial hospitalization bills submitted with revenue code 0904 for activity therapy will be returned to the provider. Patient education and training services are packaged into the overall costs associated with outpatient psychiatric services and are not a separately paid service; however, reporting is necessary for the purpose of data analysis. Hospitals may report patient education and training services for psychiatric purposes with revenue code 0942. (CMS Program Memorandum, Transmittal A-01-111, Change Request #1798, September 14, 2001, clarifies activity therapy and patient education and training under the Hospital Outpatient Prospective Payment System [OPPS].)

Advance Beneficiary Notice of Non-coverage (ABN) Modifier Guidelines

An ABN may be used for services which are likely to be non-covered, whether for medical necessity or for other reasons. Refer to CMS Publication 100-04, Medicare Claims Processing Manual, Chapter 30, for complete instructions.

Effective from April 1, 2010, non-covered services should be billed with modifier –GA, -GX, -GY, or –GZ, as appropriate.

The –GA modifier (“Waiver of Liability Statement Issued as Required by Payer Policy”) should be used when physicians, practitioners, or suppliers want to indicate that they anticipate that Medicare will deny a specific service as not reasonable and necessary and they do have an ABN signed by the beneficiary on file. Modifier GA applies only when services will be denied under reasonable and necessary provisions, sections 1862(a)(1), 1862(a)(9), 1879(e), or 1879(g) of the Social Security Act. Effective April 1, 2010, Part A MAC systems will automatically deny services billed with modifier GA. An ABN, Form CMS-R-131, should be signed by the beneficiary to indicate that ‎he/she accepts responsibility for payment.‎ The -GA modifier may also be used on assigned claims when a patient refuses to sign the ABN and the latter is properly witnessed. For claims submitted to the Part A MAC, occurrence code 32 and the date of the ABN is required.

Modifier GX (“Notice of Liability Issued, Voluntary Under Payer Policy”) should be used when the beneficiary has signed an ABN, and a denial is anticipated based on provisions other than medical necessity, such as statutory exclusions of coverage or technical issues. An ABN is not required for these denials, but if non-covered services are reported with modifier GX, will automatically be denied services.

The –GZ modifier should be used when physicians, practitioners, or suppliers want to indicate that they expect that Medicare will deny an item or service as not reasonable and necessary and they have not had an ABN signed by the beneficiary. ‎If the service is statutorily non-covered, or without a benefit category, submit the ‎appropriate CPT/HCPCS code with the -GY modifier. An ABN is not required for these denials, and the limitation of liability does not apply for beneficiaries. Services with modifier GY will automatically deny.

For claims submitted to the Part B MAC:

All services/procedures performed on the same day for the same beneficiary by the physician/provider should be billed on the same claim.

Claims for Outpatient Psychiatry and Psychology Services are payable under Medicare Part B in the following places of service: school (3), homeless shelter (4), office (11), home (12), assisted living facility (13), group home (14), temporary lodging (16), urgent care facility (20), in-hospital (21), outpatient hospital (22), hospital emergency room (23), skilled nursing home for patients in a Part A stay (31), nursing facility for patients not in a Part A stay (32), adult home (33), independent clinic (49), inpatient psychiatric facility (51), psychiatric facility partial hospitalization (52), community mental health center (53), intermediate care facility/mentally retarded (54), residential substance abuse treatment center (55), psychiatric residential treatment center (56), non-residential substance abuse treatment center (57), comprehensive inpatient rehabilitation facility (61), comprehensive outpatient rehabilitation facility (62), state or local public health clinic (71) and adult daycare (99).

For claims submitted to the Part A MAC:

Hospital Inpatient Claims:

• The hospital should report the patient's principal diagnosis in Form Locator (FL) 67 of the UB-04. The principal diagnosis is the condition established after study to be chiefly responsible for this admission.
  
• The hospital enters ICD-10-CM codes for up to eight additional conditions in FLs 67A-67Q if they co-existed at the time of admission or developed subsequently, and which had an effect upon the treatment or the length of stay. It may not duplicate the principal diagnosis listed in FL 67.
• For inpatient hospital claims, the admitting diagnosis is required and should be recorded in FL 69. (See CMS Publication 100-04, Medicare Claims Processing Manual, Chapter 25, Section 75 for additional instructions.)

Hospital Outpatient Claims:

• The hospital should report the full ICD-10-CM code for the diagnosis shown to be chiefly responsible for the outpatient services in FL 67. If no definitive diagnosis is made during the outpatient evaluation, the patient's symptom is reported. If the patient arrives without a referring diagnosis, symptom or complaint, the provider should report an ICD-10-CM code for Persons Without Reported Diagnosis Encountered During Examination and Investigation of Individuals and Populations (Z00.00-Z13.9).
  
• The hospital enters the full ICD-10-CM codes in FLs 67A-67Q for up to eight other diagnoses that co-existed in addition to the diagnosis reported in FL 67.

Documentation Requirements

The patient’s medical record should include but is not limited to:

• The assessment of the patient by the ordering provider as it relates to the complaint of the patient for that visit,
• Relevant medical history
• Results of pertinent tests/procedures
• Signed and dated office visit record/operative report (Please note that all services ordered or rendered to Medicare beneficiaries must be signed.)

The patient's medical record must contain documentation that fully supports the medical necessity for services included within this LCD. (See "Indications and Limitations of Coverage.") This documentation includes, but is not limited to, relevant medical history, physical examination, and results of pertinent diagnostic tests or procedures.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) has imposed specific restrictions on access to psychotherapy notes. These restrictions are outlined in the Code of Federal Regulations (CFR), 45 CFR, parts 160 and 164 (The Privacy Rule). Providers are exempt from submitting psychotherapy notes without patient authorization when the notes in question fit the Privacy Rule definition in 45 CFR Section 164.501. This section defines psychotherapy notes as "notes recorded by a mental health professional (in any medium) which document or analyze the contents of a counseling session and that are separated from the rest of a medical record."

45 CFR § 164.501 states that "the provider is responsible for extracting information required to perform a review for medical necessity." The provider, therefore, is expected to document information potentially necessary for review in a manner that will allow submission if this information without release of psychotherapy details that are protected by the Privacy Rule.

This following information is excluded from the protected information in 45 CFR §164.501, and must be included in all psychiatric medical record documentation and made available upon request:

- Name of beneficiary and date of service
- Type of service (individual, group, family, interactive, etc.)
- Time element, where duration of the face-to-face contact is the determining factor for coding the service rendered
- Modalities and frequency of treatment furnished
- A clinical note for each encounter, where in the aggregate, summarizes the following items: diagnosis, symptoms, functional status, focused mental status examination, treatment plan, prognosis, and progress to date. Elements such as treatment plans, functional status and prognostic assessment are expected to be documented, updated and available for review, but do not need to be delineated for each individual date of service.
- Identity and professional credentials of the person performing service

For interactive therapy, the medical record should indicate the adaptations utilized in the session and the rationale for employing these non-verbal interactive techniques

For psychotherapy services that include a medical evaluation and management component, documentation of the medical evaluation or management component of the treatment, including prescriptions, monitoring of medication effects, co-morbid medical conditions evaluated, and results of clinical tests.

Group therapy session notes must be prepared within a reasonable time period after the rendering of professional services consistent with accepted practice, and can be organized according to the general session note guidelines for individual therapy or the clinician may elect to use the following group note format:

• One portion of the note that is common to all patients, documenting date, length of time for the session, along with key issues presented. Names of the patients in the group should not appear in this group note.

• A second portion of the note, for each patient's record, commenting on that particular patient's participation in the group process and any significant changes in patient status. As outlined in HIPAA regulations referenced above, the note should exclude sensitive content of the patients' conversation.

While there are no specific limitations on the frequency or length of time that outpatient psychiatric services may be covered, there are many factors, including the nature of the illness, prior history, goals of treatment, and the patient’s response, that affect the outcome of treatment. When outpatient psychiatric services are provided at a high frequency or long duration, the plan of treatment, progress notes, and condition of the patient should justify the intensity of the services rendered.

For psychotherapy services, there should be documentation of the patient's capacity to participate in and benefit from psychotherapy, especially if the patient is in any way cognitively impaired. The medical record should document the target symptoms, goals of therapy and methods of monitoring outcome. There should be documentation in the medical record of how the treatment is expected to improve the health status or function of the patient.

Those hospitals that provide services at off-campus locations must clearly document in the medical record the location of the billed services, and that the services were properly supervised. 

Other Comments:

For claims submitted to the Part A MAC: this coverage determination also applies within states outside the primary geographic jurisdiction with facilities that have nominated CGS Administrators, LLC to process their claims.

Bill type codes only apply to providers who bill these services to the Part A MAC. Bill type codes do not apply to physicians, other professionals and suppliers who bill these services to the carrier or Part B MAC.

Limitation of liability and refund requirements apply when denials are likely, whether based on medical necessity or other coverage reasons. The provider/supplier must notify the beneficiary in writing, prior to rendering the service, if the provider/supplier is aware that the test, item or procedure may not be covered by Medicare. The limitation of liability and refund requirements do not apply when the test, item or procedure is statutorily excluded, has no Medicare benefit category or is rendered for screening purposes.

For outpatient settings other than CORFs, references to "physicians" throughout this policy include non-physicians, such as nurse practitioners, clinical nurse specialists and physician assistants. Such non-physician practitioners, with certain exceptions, may certify, order and establish the plan of care as authorized by State law. (See Sections 1861[s][2] and 1862[a][14] of Title XVIII of the Social Security Act; 42 CFR, Sections 410.74, 410.75, 410.76 and 419.22; 58 FR 18543, April 7, 2000.)

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. To be covered as incident to physicians' services, the services and supplies must be furnished by the hospital or CAH or under arrangement made by the hospital or CAH (see section 20.1.1 of this chapter). The services and supplies must be furnished as an integral, although incidental, part of the physician's professional services in the course or treatment of an illness or injury (CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 6, Section 20.5.1).

The services and supplies must be furnished under the order of a physician or other practitioner practicing within the extent of the Act, the Code of Federal Regulations, and State law, furnished by hospital personnel and under the direct supervision of a physician or clinical psychologist as defined in 42 CFR 410.32(b)(3)(ii) and 482.12. (CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 6, Section 20.5.1).

When the hospital makes arrangements with others for diagnostic services, such services are covered under Part B as diagnostic tests whether furnished in the hospital or in other facilities. (CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 6, Section 20.4.5).