01-106 Psychotherapy Services Findings of Medical Review

Noridian Healthcare Solutions, LLC, (Noridian), as the Supplemental Medical Review Contractor (SMRC) for the Centers for Medicare and Medicaid (CMS), has conducted post-payment review of claims for Medicare Part B billed on dates of service from January 1, 2023, through May 11, 2023. Below are the review results:

Project ID Project Title Error Rate for Reviewed Claims No Response to ADR Denials
01-106 OIG Psychotherapy Services 56% 29%


The codes used to bill psychotherapy services are time-based codes. Start and stop times or total times must be documented for Current Procedural Terminology (CPT) codes 90832 (Psychotherapy 30 minutes); 90834 (Psychotherapy 45 minutes); and 90837 (Psychotherapy 1 hour). For psychotherapy services performed with an Evaluation and Management (E&M) service, the psychotherapy time may not be continuous in a combined psychotherapy with an E&M service. Therefore, documentation must support the start and stop times, or total time of the psychotherapy with an E&M service and documentation must support the start and stop times, or total time devoted to psychotherapy. Psychotherapy of less than 16 minutes duration should not be reported.

The Office of Inspector General (OIG), published a report in May 2023 (A-09-21-03021) titled, Medicare Improperly Paid Providers for Psychotherapy Services, Including Those Provided Via Telehealth During the First Year of The Covid-19 Public Health Emergency (PHE).” Prior OIG audits of four psychotherapy providers identified high improper payment rates for psychotherapy services furnished before the PHE.

Telemedicine is defined as the exchange of medical information from one site to another through electronic communication, to improve a beneficiary’s health. An example of telemedicine services includes telehealth which is the use of interactive audio and video (two-way) telecommunications system allowing real-time communication between the originating (patient location) and distant site (provider location) to provide approved telehealth services for Medicare beneficiaries.

Reason for Review

As a result of the OIG report, CMS tasked the SMRC to conduct data analysis and perform medical review on psychotherapy services, including services provided via telehealth, to verify that the services are documented and billed in accordance with Medicare requirements.

The SMRC conducted medical record reviews in accordance with applicable waivers/flexibilities/statutory, regulatory, and sub-regulatory guidance.

Common Reasons for Denial

  • Non-Response to the ADR
    • Refer to Internet-Only Manual Publication (Pub.) 100-08, Chapter 3, Section, 42 CFR 424.5(a)(6) and Social Security Act Title XVIII, Sections 1815(a), 1833(e), and 1862(a)(1)(A). No medical record documentation was received. The Medicare Program Integrity Manual (PIM) Pub. 100-08, Chapter 3, Section requires providers to respond to requests for documentation within 45 calendar days of the additional documentation request for the dates of service under review. The documentation was not submitted from the provider to support the claim as requested by the additional documentation request (ADR).
  • Incomplete and/or Insufficient Documentation
    • 42 CFR 424.5(a)(6), Social Security Act 1862(a)(1)(A), Social Security Act 1833(e). The documentation was insufficient to support the psychotherapy service. The submitted documentation did not contain a psychotherapy treatment plan, or the treatment plan was incomplete. The incomplete treatment plans were lacking elements such as goals, frequency, and duration.
  • Medical Necessity
    • Social Security Act 1862, Internet Only Manual, Pub 100-08, Medicare Program Integrity Manual (MPIM), Chapter 3, Section Documentation submitted did not support reasonable and necessary criteria was met. The documentation submitted did not support the requirements for psychotherapy treatment plans including the frequency, duration of the services to be provided, and anticipated goals.


Social Security Act (SSA), Title XI

  • §1135 Authority to Waive Requirements During National Emergencies

Social Security Act (SSA), Title XVIII

  • §1815(a) Providers must furnish information
  • §1833(e) Payment of Benefits
  • §1834(m) Payment for Telehealth Services
  • §1842(p)(4) Provisions Relating to the Administration of Part B
  • §1862(a)(1)(A) Exclusion from Coverage and Medicare as a Secondary Payer
  • §1877(g) Blanket Waivers of Section 1877 (G) of the Social Security Act Due to Declaration of COVID-19 Outbreak in the United States as a National Emergency
  • §1879 (a)(1) Limitation on Liability of Beneficiary Where Medicare Claims are Disallowed

Title 42 of the Code of Federal Regulations (CFR)

  • §410.78 Telehealth Services
  • §411.15(k)(1) Particular Services Excluded from Coverage
  • §414.65 Payment for Telehealth Services
  • §§424.5 and 424.5(a)(6) Basic Conditions and Sufficient Information

Public Laws

  • CMS 1744-IFC Medicare and Medicaid Programs, Policy, and Regulatory Revisions in Response to the COVID-19 Public Health Emergency
  • Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (Pub. L. 116-123, March 6, 2020). Telehealth Services During Certain Emergency Periods
  • Public Health Service Act, 2021, Section 319(e) Telehealth Enhancements for Emergency Response
  • Robert T. Stafford Disaster Relief and Emergency Assistance Act, Pub. L. No. 100-707, 102 Stat. 4689 (1988), Codified as Amended 42. U.S.C. § 5121. Disaster Relief and Emergency Assistance Amendments

Federal Register

  • Interim Final Rule with Comments (IFC) 85 FR 19230. Revisions in Response to the COVID-19 Public Health Emergency (CMS-1744-IFC). Effective March 31, 2020
  • Federal Register, Vol. 77, No. 222. November 6, 2012. Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule. CMS-1590-FC. Effective January 1, 2013

Internet Only Manual (IOM), Medicare Benefit Policy Manual (MBPM), Pub. 100-02

  • Chapter (Ch.) 6 § 70 Outpatient Hospital Psychiatric Services
  • Ch. 15, §270 Telehealth Services
  • Ch. 16 General Exclusions from Coverage

IOM, Medicare Claims Processing Manual, Publication (MCPM) 100-04

  • Ch. 12, §150 Clinical Social Worker (CSW) Services
  • Ch. 12, §160 Independent Psychologist Services
  • Ch. 12, §170 Clinical Psychologist Services
  • Ch. 12, §190 Medicare Payment for Telehealth Services
  • Ch. 23, §20.9 National Correct Coding Initiative (NCCI)

IOM, Medicare Program Integrity Manual, Publication (MPIM) 100-08

  • Ch. 3, § Coverage Determinations
  • Ch. 3, § Reasonable and Necessary Criteria
  • Ch. 3, § Limitation of Liability Determinations
  • Ch. 3, § Signature Requirements
  • Ch. 3, § Amendments, Corrections and Delayed Entries in Medical Documentation
  • Ch. 13, §13.5.4 Reasonable and Necessary Provisions in LCDs
  • Ch. 3, § Coding Determination
  • Ch. 3, § Denial Types
  • Ch 3, § Psychotherapy Notes
  • Ch. 3, § No response of Insufficient Response to Additional Documentation Requests

CMS Coding Policies

  • National Correct Coding Initiative Coding Policy Manual for Medicare Services

Technical Direction Letter (TDL)

  • TDL 210317 Medical Review of Timed Codes

Local Coverage Determination (LCD)

  • L33252 Psychiatric Diagnostic Evaluation and Psychotherapy Services
  • L33632 Psychiatry and Psychology Services
  • L34353 Outpatient Psychiatry and Psychology Services
  • L34616 Psychiatry and Psychology Services
  • L35101 Psychiatric Codes

Local Coverage Article (LCA)

  • A56937 Billing and coding: Psychiatry and Psychology Services
  • A57065 Billing and Coding: Outpatient Psychiatry and Psychology Services
  • A57130 Billing and Coding: Psychiatric Codes
  • A57480 Billing and Coding: Psychiatry and Psychology Services
  • A57520 Billing and Coding: Psychiatric Diagnostic Evaluation and Psychotherapy Services


  • American Medical Association, Current Procedural Terminology (CPT) Manual, Professional Edition (2020)
  • Medicare Learning Network (MLN) 2020-11-12-MLNC, COVID 19: Non-Physician Practitioner Billing Audio Services
  • Medicare Leaning Network (MLN), MM12427 New/Modifications to the Place of Service (POS) Codes for Telehealth. Effective January 1, 2022

Last Updated May 31, 2024