Outpatient Mental Health Treatment Limitations
Outpatient Mental Health Limitations
Services provided in outpatient mental health settings are subject to a 62.5% limitation. The limitation applies to claims for professional services that represent mental health treatment furnished to individuals, who are not hospital inpatients, by physicians, clinical psychologists, clinical social workers, and other allied health professionals. Items and supplies furnished by physicians or other mental health practitioners in connection with treatment are also subject to limitation.
The limitation applies only to treatment services. It does not apply to diagnostic services. The following is a listing of services not subject to the limitation:
- Diagnosis of Alzheimer’s Disease or Related Disorder – When the primary diagnosis reported for a particular service is Alzheimer’s Disease, the nature of the service that has been rendered is looked at in determining whether it is subject to the limitation. Typically, treatment provided to a patient with a diagnosis of Alzheimer’s Disease or a related disorder represents medical management of the patient’s condition (rather than psychiatric treatment) and is not subject to the limitation. However, when the primary treatment rendered to a patient with such a diagnosis is psychotherapy, it is subject to the limitation.
- Brief Office Visits for Monitoring or Changing Drug Prescriptions – Brief office visits for the sole purpose of monitoring or changing drug prescriptions used in the treatment of mental, psychoneurotic and personality disorders are not subject to the limitation. These visits are reported using HCPCS code M0064 (brief office visit for the sole purpose of monitoring or changing drug prescriptions used in the treatment of mental, psychoneurotic, and personality disorders).
- Diagnostic Services – The limitation does not apply to tests and evaluations performed to establish or confirm the patient’s diagnosis. Diagnostic services include psychiatric or psychological tests and interpretations, diagnostic consultations, and initial evaluations. An initial visit to a practitioner for professional services often combines diagnostic evaluation and the start of therapy. Such a visit is neither solely diagnostic nor solely therapeutic. The initial visit is deemed to be diagnostic so that the limitation does not apply. Separating diagnostic and therapeutic components of a visit is not administratively feasible unless the practitioner already has separately identified them. Determining the entire visit to be therapeutic is not justifiable since some diagnostic work must be done before even a tentative diagnosis can be made and certainly before therapy can be instituted. Moreover, the patient should not be disadvantaged because therapeutic as well as diagnostic services were provided in the initial visit.
- Partial Hospitalization Services Not Directly Provided by Physician – The limitation does not apply to partial hospitalization services that are not directly provided by a physician. These services are billed by hospitals and community mental health centers (CMHCs) to intermediaries.
The following facilities are considered “inpatient” and are not subject to the outpatient limitation: Inpatient
- 21 Inpatient Hospital
- 61 Comprehensive Inpatient Rehabilitation Facility
- 51 Inpatient Psychiatric Facility
The limitation reduces the established fee schedule amount by 62.5% for each outpatient service received by the beneficiary. The beneficiary is responsible for the difference between the approved amount and the reduced amount in addition to the 20% co-insurance amount. If the patient has not satisfied their annual Medicare deductible, that amount is deducted from the approved amount after the 62.5% calculation.
| Provider Billed Charge | $ 100.00 |
| Approved Amount/ Fee Schedule Amount | $ 66.50 |
| 62.5% of $66.50 (Approved Amount) | |
| Adjusted/Reduced Medicare Allowance | $ 41.56 |
| Patient responsibility (PR) difference Between $66.50 and $41.56 | $24.94 (PR) |
| Medicare then calculates the 80% payment with the adjusted approved amount | |
| 80% of Reduced Medicare Allowance $41.56 x 80% = Medicare payment | $ 33.25 |
| 20% Patients Coinsurance $41.56 X 20% | $ 8.31 (PR) |
| Total Medicare Payment to Provider | $ 33.25 |
| Total Patient Responsibility (PR) ($24.94 plus $8.31) | $33.25 (PR) |
| With Deductible | |
| Provider Billed Charge | $ 100.00 |
| Approved Amount/ Fee Schedule Amount | $ 66.50 |
| 62.5% of $66.50 (Approved Amount) | |
| $ 41.56 | |
| Patient responsibility (PR) difference Between $66.50 and $41.56 | $ 24.94 (PR) |
| Medicare first applies the deductible then calculates the 80% payment with the adjusted approved amount. | |
| Deductible | $ 20.00 (PR) |
| 80% of Reduced Medicare Allowance $21.56 x 80% = Medicare payment | $ 17.25 |
| 20% Patients Coinsurance $21.56 X 20% | $ 4.31 (PR) |
| Total Medicare Payment to Provider | $ 17.25 |
| Total Patient Responsibility (PR) ($24.94 plus $20.00 plus $4.31) | $49.25 (PR) |
In this article we discussed outpatient mental health limitations, we hope that you might find it useful. If you are looking for overall Mental Health billing and coding services you can refer to E2E Medical Billing Services. Our accurate and affordable billing services will eliminate billing and coding errors and will increase your practice collection. To know more about our mental health billing and coding services, call us at 888-552-1290 or write to us at info@e2eMedicalBilling.com