Updated Billing Guidelines for Psychiatric Services

Undoubtedly, mental health services are now more accessible and essential to overall patient care. In fact, the need for correct psychiatric service billing compliance has reached unprecedented importance. That’s why the Centers for Medicare & Medicaid Services (CMS) and HIPAA created new updates that influence psychiatric care documentation procedures, supervision protocols, and payment methods.

Furthermore, the "incident-to" billing model has been expanded to enhance access to behavioral health services. These updates also offer a better understanding of what supervision needs to meet. Similarly, patient confidentiality stands as one of the most important concerns, particularly during psychotherapy notes.

Therefore, mental health providers have the responsibility to both understand and strictly comply with the latest supervision guidelines and documentation requirements. Also, accurate reimbursement depends on correct CPT coding practice. In fact, a healthcare provider must be fully compliant with HIPAA rules for psychotherapy notes to sustain patient trust while adhering to regulations.

This blog includes updated psychiatric billing rules, documentation tips, coding guidelines, and compliance essentials for 2025.

Updated Billing Guidelines in 2025

1. Incident-To Billing and Supervision

Incident-to billing allows services provided by auxiliary personnel (e.g., LPCs, LMFTs) to be billed under a supervising physician or NPP (Non-Physician Practitioner), such as a Nurse Practitioner (NP) or Physician Assistant (PA), as if the physician had personally provided them.

2025 Update – Key Change:

• The Final Rule now allows general supervision rather than direct supervision for behavioral health services furnished incident-to.
• This means the physician/NPP does not need to be physically present during the provision of services, but must be available for consultation.

Key Requirements:

• Supervising provider must initiate the patient’s care.
• Clear documentation should establish the connection between the auxiliary provider and the supervising professional.
• Physicians must note their involvement and oversight in the patient’s care on medical records.

2. Medical Documentation Requirements

Accurate documentation is critical for incident-to billing and compliance with Medicare requirements. The medical record must include:

• Co-signature or credentials (e.g., MD, DO, NP, PA) of both the service provider and the supervising physician.
• An explicit notation of the supervising physician’s participation.
• Reference to the initial or past visits by the supervising provider to establish continuity of care.

Without these components, claims can be denied or subjected to audits.

3. CPT Code and Modifier Usage

Psychiatric services use time-based Current Procedural Terminology (CPT) codes to reflect the duration and type of therapy:

CPT Code	Session Duration
90832	16–37 minutes (brief therapy)
90834	38–52 minutes (standard session)
90837	53+ minutes (extended session)

Modifiers are used to indicate special circumstances:

• 95 Modifier – Used for synchronous telehealth services
• GT Modifier – Telemedicine delivered through interactive audio and video systems

Important: Always verify if payers require specific modifiers for teletherapy. Some local or commercial plans may have unique requirements.

4. HIPAA Guidelines for Psychotherapy Notes

Psychotherapy notes are treated differently under the HIPAA Privacy Rule:

• They must be kept separate from the general medical record.
• They require patient authorization before disclosure – even for treatment purposes.
• Exceptions (without patient authorization) include:
  • Legal mandates (e.g., abuse reporting)
  • Imminent threats (e.g., suicide risk)
  • Court-ordered disclosures

These notes are primarily for the therapist’s use and are not necessary for billing unless directly related to a dispute or audit.

5. Essential Documentation Elements

To ensure compliance and support medical necessity, each session should include:

• Date of service and provider’s name and credentials
• Patient’s history and session context
• Observations and therapy techniques used
• Current diagnosis(es) and clinical reasoning
• Medication management, if any
• Progress toward goals and treatment plan
• Evaluation and Management (E/M) details if combined with psychotherapy

Thorough, structured notes reduce denials and support continuity of care.

6. Common Claim Denials & How to Prevent Them

Common Issue	Prevention Tip
Incomplete Documentation	Always include duration, diagnosis, and session outcome.
Incorrect CPT Codes	Match the therapy duration with the proper code.
Supervision Not Properly Noted	Add the supervising provider’s name and role in the chart.
Telehealth Modifier Missing	Use modifiers like 95 or GT when billing remotely.
Insurance Verification Issues	Recheck patient eligibility and benefits before sessions.
Late Filing of Claims	Follow each payer’s filing deadlines strictly.

Conclusion

Did you know? Psychiatric billing in 2025 demands precision, compliance, and awareness of changing guidelines. From updated supervision rules under incident-to billing to proper documentation and HIPAA-compliant note handling, mental health professionals must implement best practices for accurate billing.

24/7 Medical Billing Services simplifies the billing journey with expert guidance, coding audits, and end-to-end medical billing solutions tailored to mental health providers. Contact the professionals to stay compliant with guidelines and multiply the healthcare reimbursement so that you can focus on your services rather than paperwork.

FAQs

Q1: Can I bill E/M with psychotherapy services?

A: Yes, if both evaluation/management and psychotherapy are provided on the same day, and time is documented separately.

Q2: How is the 90837 CPT code different from the 90834?

A: Both are different based on actual session time, whereby the 90837 code is for 53+ minutes of psychotherapy and the 90834 is used for 38–52 minutes sessions.

Q3: Do I need a modifier for teletherapy sessions?

A: Yes, use modifier 95 or GT as required by the payer to indicate telehealth services.

Q4: Are psychotherapy notes part of the medical record?

A: No, they are protected separately under HIPAA and require patient consent for disclosure.

Q5: Can LPCs or LMFTs bill under incident-to?

A: Yes, under general supervision, LPCs and LMFTs can provide services billed as incident-to a supervising physician/NPP.

Q6: What causes claim denials in psychiatric billing?

A: Common causes include incomplete documentation, wrong CPT codes, insurance errors, and missed deadlines.

Q7: What CPT code is used for couples therapy?

A: Use 90847 for family psychotherapy with the patient present.

Q8: Can I bill CPT 90837 twice in one day?

A: Generally, no. Only one session is billable per day unless there is a medical necessity and separate documentation.

Q9: How can I ensure my psychiatric billing is compliant?

A: Outsourcing billing for psychiatric services to professionals of 24/7 Medical Billing Services helps ensure accurate, compliant, and optimized billing.