Psychiatry and Psychology Services

Social Security Act 1861(s) Medical and Other Health Services

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

CMS Publication 100-02: Medicare Benefit Policy Manual, Chapter 15 – Covered Medical and Other Health Services:

§160 Clinical Psychologist Services 
§170 Clinical Social Worker (CSW) Services 
§180 Nurse-Midwife (CNM) Services 
§190 Physician Assistant (PA) Services 
§200 Nurse Practitioner (NP) Services 
§210 Clinical Nurse Specialist (CNS) Services
§330 Marriage and Family Therapist (MFT) Services
§340 Mental Health Counselor (MHC) Services

CMS Publication 100-03: Medicare National Coverage Determinations (NCD) Manual, Chapter 1 – Coverage Determinations, Part 1:

§30.1 Biofeedback Therapy

CMS Publication 100-04: Medicare Claims Processing Manual, Chapter 12 – Physician/Nonphysician Practitioners:

§110 Physician Assistant (PA) Services Payment Methodology
§120 Nurse Practitioner (NP) and Clinical Nurse Specialist (CNS) Services Payment Methodology
§120.1 Limitations for Assistant-at-Surgery Services Furnished by Nurse Practitioners and Clinical Nurse Specialists
§150 Clinical Social Worker (CSW) Services
§160 Independent Psychologist Services
§170 Clinical Psychologist Services
§170.1 Payment
§210 Outpatient Mental Health Treatment Limitation
§240 Marriage and Family Therapist (MFT) Services
§250 Mental Health Counselor (MHC) Services

Psychiatry and Psychology are specialized fields for the diagnosis and treatment of various mental health disorders and/or diseases.

References to providers throughout this policy include physicians, and non-physicians, such as clinical psychologists, independent psychologists, nurse practitioners, clinical nurse specialists and physician assistants when the services performed are within the scope of their clinical practice/education and authorized under the state law.

Psychiatry Services with Evaluation and Management (E/M)
Some psychiatry services may be reported with evaluation and management (E/M) services or other services when performed. An E/M code may be used to report evaluation and management services alone (no other service reported that day) or used to report an E/M service with psychotherapy. An E/M service is based on the physician’s work and includes services medically necessary to evaluate and treat the patient.

Psychiatric Diagnostic Evaluation
A psychiatric diagnostic evaluation is an integrated assessment that includes history, mental status and recommendations. It may include communicating with the family and ordering further diagnostic studies. A psychiatric diagnostic evaluation with medical services includes a psychiatric diagnostic evaluation and a medical assessment. It may require a physical exam, communication with the family, prescription medications and ordering laboratory or other diagnostic studies. A psychiatric diagnostic evaluation with medical services also includes physical examination elements.

Patients may need an evaluation and diagnosis by a multidisciplinary team prior to implantation of peripheral and central nervous system stimulators for chronic intractable pain. (See NCD 160.7 Electrical Nerve Stimulators.)

The following information pertains to both psychiatric diagnostic evaluation; and psychiatric diagnostic evaluation with medical services:

1. Cannot be reported with an E/M code on the same day by the same provider
2. Cannot be reported with a psychotherapy service code on the same day
3. May only be reported once per day
4. May be reported more than once for a patient when separate evaluations are conducted with the patient and other informants (i.e., family members, guardians, significant others) on different days. This service is considered medically necessary once every 6 months per episode of illness. *However, if reported more than once per episode of illness, documentation will be required for the establishment of medical necessity.
5. In certain circumstances family members, guardians, or significant others may be seen in lieu of the patient.

Interactive Complexity

Interactive Complexity refers to communication difficulties during the psychiatric procedure.

When performed with psychotherapy, the interactive complexity component relates only to the increased work intensity of the psychotherapy service, but does not change the time for the psychotherapy service.

The medical record for interactive complexity reported with the psychiatric procedures must indicate that the person being evaluated does not have the ability to interact through normal verbal communicative channels, include adaptations utilized in the session and the rationale for employing these interactive techniques, and recommendations for future care.

Psychotherapy
Psychotherapy is defined as the treatment for mental illness and behavioral disturbances in which the clinician establishes a professional contract with the patient and through definitive therapeutic communication, attempts to alleviate the emotional disturbances, reverse or change maladaptive patterns of behavior and encourage personality growth and development or support current evaluation of functioning. Psychotherapy services include ongoing assessment and adjustment of psychotherapeutic interventions and may include involvement of family member(s) or others in the treatment process. Although maintenance per se is not covered, helping a patient maintain his/her highest level of functioning, such as a patient with borderline personality disorder, may be covered on a case-by-case basis. These case-by-case considerations must be supported by the evaluation and a plan with clearly identified goal(s).

Psychotherapy time may include face to face time with family members as long as the patient is present for part of the service.

To report both E/M and psychotherapy, the two services must be significant and separately identifiable.

1. The type and level of E/M service is selected first based upon the key components of history, examination, and medical decision-making. For office services on or after 01/01/2021, choose the level of E/M service based on either medical decision making or time.
2. Time associated with activities used to meet criteria for the E/M service is not included in the time used for reporting the psychotherapy service (i.e., time spent on history, examination, and medical decision making when used for the E/M service is not psychotherapy time). Time may not be used to determine E/M code selection. Prolonged Services may be reported when E/M and psychotherapy are reported.
3. A separate diagnosis is not required for the reporting of E/M and psychotherapy on the same date of service.

Psychotherapy for Crisis
A major concept and addition to the psychotherapy section is the addition of codes for psychotherapy for crisis when psychotherapy services are provided to a patient who presents in high distress with complex or life-threatening circumstances that require immediate attention.
These codes do not include medical services. In a crisis situation, psychiatrists may prefer the appropriate E/M code.

Documentation for Psychotherapy Services
The medical record must indicate the time spent in the psychotherapy encounter and the therapeutic maneuvers, such as behavior modification, supportive or interpretive interactions that were applied to produce a therapeutic change.

Behavior modification is not a separate service, but is an adjunctive measure in psychotherapy. Additionally, a periodic summary of goals, progress toward goals, and an updated treatment plan must be included in the medical record.

Prolonged treatment must be well supported by the content of the medical documentation. Documentation must be present in the medical record supporting the medical necessity for ongoing treatment.

To establish medical necessity of the service, claims must be submitted with a covered diagnosis.

Family Psychotherapy
In certain types of medical conditions, including when a patient is withdrawn and uncommunicative due to a mental disorder for example, the provider may contact relatives and close associates to secure background information to assist in diagnosis and treatment planning.

Family psychotherapy services are covered only where the primary purpose of such psychotherapy is the
treatment of the patient’s condition. Examples include:

1. When there is a need to observe and correct, through psychotherapeutic techniques, the patient’s interaction with family members and/or
2. 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.

Group Psychotherapy
Group Psychotherapy is psychotherapy administered in a group setting with a trained therapist simultaneously providing therapy to several patients. Personal and group dynamics are discussed and explored in a therapeutic setting allowing emotional catharsis, instruction, insight, and support. To establish medical necessity of the service, claims must be submitted with a covered diagnosis.

Group therapy, since it involves psychotherapy, must be led by a person who is authorized by state statute to perform this service. This will usually mean a physician, clinical psychologist, clinical social worker, physician assistant, certified nurse practitioner, clinical nurse specialist, or other person authorized by the state to perform this service.

Limitations for Psychotherapy
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.

Psychotherapy services does not include teaching grooming skills, monitoring activities of daily living (ADL), recreational therapy (dance, art, play) or social interaction. It also does not include oversight activities such as housing, or financial management.

Severe and profound mental retardation is never covered for psychotherapy services.

Psychotherapy services are not covered when documentation indicates that senile dementia has produced a severe enough cognitive defect to prevent psychotherapy from being effective.

Multiple-family group psychotherapy is for those situations where family dynamics are occurring due to a commonality of problems in the family members under treatment and would generally be non-covered by Medicare. Such group therapy is directed to the effects of the patient’s condition on the family, and does not meet Medicare’s standards of being part of the provider personal services to the patient.

Group therapy does not include socialization, music therapy, recreational activities, art classes, excursions, sensory stimulation or eating together, cognitive stimulation, or motion therapy.

Self-help groups or support groups without a qualified professional present are not covered. When covered the group size should be of a size that can be successfully led (e.g., maximum of 12 people).

Psychoanalysis
The practice of psychoanalysis is 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.

The medical record must document the indications for psychoanalysis, description of the transference, and the psychoanalytic techniques used. To establish medical necessity of the service, claims must be submitted with a covered diagnosis.

The provider using this technique must be trained by an accredited program of psychoanalysis.

Narcosynthesis
Narcosynthesis is used for 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.

The medical record should document the medical necessity of this procedure (e.g., the patient had difficulty verbalizing his/her psychiatric problems without the aid of the drug). The record should also document the specific pharmacological agent, dosage administered, and whether the technique was effective or non-effective.

Limitation of Narcosynthesis
Narcosynthesis is restricted to physicians (M.D., D.O.) only.

Hypnotherapy
Hypnosis is an artificially induced alteration of consciousness in which the patient is in a state of increased suggestibility.

To establish medical necessity of the service, claims must be submitted with a covered diagnosis.

Hypnosis may be used for diagnostic or therapeutic purposes.

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Documentation Requirements

1. The medical record should document the target symptoms; goals of therapy and methods of monitoring outcomes; and why the chosen therapy is the appropriate treatment modality (either in lieu of, or in addition to, another form of psychiatric treatment).
2. The patient’s medical record should contain documentation that fully supports the medical necessity for psychiatry and psychology services as Medicare covers it. This documentation includes, but is not limited to, relevant medical history, physical examination, results of pertinent diagnostic tests or procedures.
3. Individual psychotherapy CPT codes should be used only when the focus of treatment involves individual psychotherapy.
4. Medical records must document the patient’s capacity to participate in, and benefit from, psychotherapy, if psychotherapy is the chosen treatment. The estimated duration of treatment (number of sessions) should be specified. There should be documentation in the medical record that the treatment is expected to improve the health status or function of the patient. These CPT codes would not be used as generic psychiatric service CPT codes when other CPT codes such as an Evaluation and Management service or pharmacological CPT codes would be more appropriate.
5. Documentation must be available and may be requested prior to payment. If the claim does not indicate that documentation is available it will be denied.

Utilization Guidelines
Please see “Indications and Limitations and/or Medical Necessity” section of the policy for documentation related to specific services.

Department of Health and Human Services- Center for Medicare & Medicaid Services -MLN Learning Network -Mental Health Services. (January 2015). ICN 903195

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