Complete Psychotherapy Billing and Coding Guide 2023

In these unprecedented and challenging times, the significance and demand for psychotherapy and mental health services have reached unparalleled heights. Consequently, the importance of adhering to psychotherapy billing guidelines has never been greater.

Regardless of your specialization – be it a psychiatrist (MD), licensed clinical social worker (LCSW), clinical psychologist (PsyD or PhD), or licensed professional counselor (LPC) – the utilization of CPT codes is fundamental for mental health professionals nationwide to receive rightful compensation for their indispensable work.

If your practice is contemplating the addition of an extra office location or the provision of teletherapy services, ensuring HIPAA compliance while incorporating the evolving changes in behavioral health guidelines set forth by the Centers for Medicare and Medicaid Services becomes paramount.

Hence, it is crucial for your practice to remain up to date with the current developments in psychotherapy billing codes.

This comprehensive guide is designed to help mental health practices across the board understand the latest rules and regulations. Authored by our expert team of medical billers and coders, it delves into the core aspects of billing for group psychotherapy medical billing and coding, including

• Different types of CPT codes used in psychotherapy coding and billing
• Definitions and requirements associated with each code
• Billing guidelines for different healthcare providers
• Applicable modifiers for codes
• Rules and best practices for proper documentation

Maintaining confidentiality, psychotherapy notes are excluded from an individual’s right under HIPAA to access protected health information. However, healthcare professionals are still required to maintain thorough documentation for each encounter.

As a growing mental health practice, your success hinges on a comprehensive understanding of psychotherapy billing. This guide, based on the ICD-10-CM standards effective since October 2022 and applicable throughout 2023, will provide you with the knowledge and guidance needed to navigate the complexities of psychotherapy billing and coding accurately.

In psychotherapy billing, numerous CPT codes are utilized by mental health professionals, falling into various categories such as:

• Health Behavior Assessment and Intervention (CPT codes 96156-96171)
• Psychotherapy Codes (CPT codes 90832-90863)
• Psychological and Neuropsychological Testing Codes (CPT codes 96105-96146)

While the following list presents the most frequently used psychotherapy billing codes, it is important to note that this is not an exhaustive compilation. It serves as a general description of commonly performed mental health services, outlining which healthcare professionals can report which specific psychotherapy billing codes.

According to U.S. Department of Health and Human Services psychotherapy involves the treatment of mental illness and behavioral disturbances through therapeutic communication, aiming to alleviate emotional disturbances, modify maladaptive behavior patterns, and foster personal growth and development.

It is important to note that individual psychotherapy billing codes should only be used when the primary focus of treatment is on individual psychotherapy. If other services, such as evaluation and management (E/M) or pharmacological interventions, are more suitable for the specific situation, utilizing the corresponding CPT codes would be more appropriate.

It is crucial to remember that all psychotherapy CPT codes are time-based, meaning they are determined by the duration of time spent with the patient and/or the patient’s family. Although the psychotherapy coding manual specifies time increments of 30, 45, or 60 minutes, there is some flexibility allowed. The American Academy of Child & Adolescent Psychiatry (AACAP) has provided a rule to accurately record time when it does not precisely align with the specified time increments in the CPT code.

Psychotherapy services are not limited to a specific group of mental health professionals. Psychologists, psychiatrists, nurses, social workers, and other practitioners who provide psychotherapy services all utilize the same applicable CPT codes. These codes are used when billing clients and completing CMS-1500 claim forms for submission to third-party payers, including Medicare, Medicaid, and private health insurance carriers.

Now, let’s address the difference between evaluation and management (E/M) CPT codes and psychotherapy CPT codes. The following table outlines the key distinctions between these code types:

While E/M codes center around assessment, diagnosis, and management of patient care, psychotherapy codes specifically pertain to individual or group therapy sessions. Psychotherapy codes are time-based, requiring documentation of the time spent with the patient. In contrast, E/M codes do not have a time-based component.

It is important to understand these distinctions to ensure accurate coding and billing for the services provided in psychotherapy and evaluation and management contexts

Each specifically describing a medical, diagnostic, or surgical procedure or service. These codes were developed by the American Medical Association (AMA) to accurately represent the services rendered by healthcare professionals. Medical coders must select the most appropriate code that best reflects the provided service.

Let’s examine three CPT codes in detail to gain a better understanding of the requirements for performing and documenting specific psychotherapy services:

This code denotes a comprehensive psychiatric diagnostic evaluation that includes an integrated biopsychosocial assessment encompassing history, mental status, and recommendations. It is used to describe an initial visit for a new patient or an established patient with a new diagnosis. While this visit may involve diagnostic assessment or reassessment, it does not encompass psychotherapy services. During the encounter, the provider must document:

• Elicitation of a complete medical and psychiatric history, including past, family, and social aspects.
• Mental status examination.
• Establishment of an initial diagnosis.
• Evaluation of the patient’s ability and capacity to respond to treatment.
• Initial plan of treatment.
• This code can be reported once per day and should not be reported on the same day as an E/M service performed by the same individual for the same patient.
• Coverage is typically limited to the outset of an illness or suspected illness (exceptions may apply; refer to Local Coverage Determination – LCD).

This code represents psychotherapy, which involves the treatment of mental illness and behavioral disturbances through definitive therapeutic communication. The objective is to alleviate emotional disturbances, reverse or modify maladaptive patterns of behavior, and foster personality growth and development. Documentation supporting psychotherapy should include, but is not limited to, the following:

• Time element, as noted above (30 minutes).
• Modalities and frequency.

Clinical notes for each encounter, summarizing:

• Diagnosis.
• Symptoms.
• Functional status.
• Focused mental status examination.
• Treatment plan, prognosis, and progress.
• Name, signature, and credentials of the person performing the service.

This code encompasses a mental status examination and psychotherapy provided during a crisis situation. It involves urgent assessment and history of a crisis state, a mental status examination, and determining the appropriate disposition. Crisis cases typically involve life-threatening or complex issues requiring immediate attention for patients experiencing high distress. During the encounter, the provider must document:

• A 60-minute session with start and stop time (30-74 minutes).
• Preliminary assessment of risk, mental status, and medical stability.
• Provision of psychotherapy (for crises lasting less than 30 minutes on a specific date, report 90832 or 90833, along with evaluation and management services if applicable).
• Mobilization of resources to defuse the crisis and restore safety.
• The need for further evaluation or referral to other mental health services, if necessary.
• Communication with contacts who may have relevant information for the assessment.
• Provision of psychotherapeutic intervention to minimize emotional trauma.
• Substance use, if applicable.
• Outcome of the session.

By understanding these specific CPT codes and their associated documentation requirements, mental health professionals can accurately report and document psychotherapy services rendered.

Collaboration among multiple healthcare professionals is common in patient care. When a non-physician provider delivers services under the supervision of a physician professional, incident-to guidelines are employed for billing for psychotherapy services purposes using the provider’s National Provider Identifier (NPI). According to the Medicare Benefit Policy Manual, incident-to is defined as:

“In accordance with the Final Rule, which amends the direct supervision requirement under the incident-to billing regulation, behavioral health services may be furnished under the general (instead of direct) supervision of a physician or Non-Physician Practitioner (NPP) when provided by auxiliary personnel, such as licensed professional counselors (LPCs) and licensed marriage and family therapists (LMFTs), incident to the services of a physician or NPP.”

To comply with incident-to guidelines, the physician professional must clearly document the involvement of a non-physician provider in the medical record. The following information should be included:

• Documentation entries must include the co-signature or legible identity and credentials (e.g., MD, DO, NP, PA) of both the practitioner who provided the service and the supervising physician.
• There should be an indication of the supervising physician’s involvement in the patient’s care. This can be achieved by noting the supervising physician’s involvement within the text of the associated medical record entry, with the degree of involvement aligning with the clinical circumstances of the care.
• Documentation from other dates of service, such as the initial visit, can establish a link between the two providers.

Modifiers are utilized to indicate specific circumstances that modify a medical service or procedure without changing its definition or code.

In psychotherapy medical billing, there are no specific modifiers associated with the services. However, it is advisable to review the requirements of your insurance carriers as they may mandate the use of local modifiers. For instance, if psychotherapy is conducted via teletherapy, an applicable telemedicine modifier might be necessary.

Documentation plays a critical role in explaining the medical necessity of procedures performed by the provider. All documentation must adhere to the legal and regulatory requirements of the state in which the provider practices.

Regarding HIPAA guidelines, psychotherapy notes are treated differently from other mental health information due to their sensitive nature and their status as personal notes of the therapist, which are typically not required or useful for treatment, payment, or healthcare operations purposes, except by the mental health professional who created them. Therefore, with few exceptions, the Privacy Rule mandates that a covered entity obtain the patient’s authorization before disclosing psychotherapy notes for any reason, including disclosure for treatment purposes to a healthcare provider other than the originator of the notes. Notable exceptions exist for disclosures required by other laws, such as mandatory reporting of abuse and situations involving a “duty to warn” regarding threats of serious and imminent harm made by the patient (state laws may vary regarding the mandatory or permissible nature of such warnings).

All medical records should include the following information:

• Date of service and provider information
• History
• Observations and type of therapy
• Diagnoses
• Medications
• Progress and follow-up
• E/M documentation if applicable

If you find yourself uncertain about documentation or lack the time to handle it, consider hiring a virtual medical assistant. These professionals can expertly and efficiently manage various administrative and clerical tasks.

Several factors can lead to denials of psychotherapy claims. The most common reasons include

Incomplete documentation for behavioral health services rendered.

Incorrect patient insurance and coverage: Always verify patient eligibility and coverage, especially when mental health services are covered by third-party insurance. Conducting a thorough verification of benefits is crucial.

Incorrect CPT codes: CPT codes change frequently, so it is essential for your practice to keep superbills updated with the most accurate codes set by the American Medical Association (AMA).

Inaccurate time-based codes: Errors can occur when reporting time-based codes, so it is important to ensure the units of service are accurate.

Timely filing: Ensure all claims are submitted within the designated timeframes. Missing even a single deadline can cause significant delays in filing and reimbursement.

By addressing these common pitfalls and adhering to proper documentation practices, you can minimize claim denials and optimize the reimbursement process.

We trust that this guide has provided you and your practice with a solid understanding of the fundamentals of psychotherapy medical billing and coding. Regardless of your specialization, it is essential for all healthcare providers to ensure accurate and comprehensive medical documentation, clearly articulate the medical necessity of the services rendered, and submit error-free claims to insurance companies.

By maintaining clear and well-written documentation, the billing process can become smoother. It is crucial to stay updated on the latest developments in psychotherapy medical billing to avoid potential difficulties in the future.

If you require prompt assistance with your psychotherapy medical billing, consider engaging the comprehensive services offered by BillingParadise. Our team collaborates with therapists and mental health professionals nationwide to streamline their billing procedures and enhance their financial stability.

Feel free to contact us at any time to get more information about our mental health revenue cycle management services.