Outpatient Mental Health Treatment Limitation Set

The Centers for Medicare & Medicaid Services (CMS) is phasing out the outpatient mental health treatment limitation (the limitation) over a five-year period, from 2010-2014. At the end of the five-year period, Medicare will pay outpatient mental health services at the same rate as other Part B services ― that is, at 80 percent of the physician fee schedule.

Section 102 of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) requires the current 62.5 percent limitation (effective since the inception of the Medicare program until Dec. 31) to be reduced as follows:

  • Jan. 1, 2010 – Dec. 31, 2011, the limitation is 68.75 percent (of which Medicare pays 55 percent and the patient pays 45 percent);
  • Jan. 1, 2012 – Dec. 31, 2012, the limitation is 75 percent (of which Medicare pays 60 percent and the patient pays 40 percent);
  • Jan. 1, 2013 – Dec. 31, 2013, the limitation is 81.25 percent (of which Medicare pays 65 percent and the patient pays 35 percent); and
  • Jan. 1, 2014 – onward, the limitation is 100 percent (of which Medicare pays 80 percent and the patient pays 20 percent.

Services Not Subject to the Limitation

Medicare will not apply the limitation on type of bill (TOB) 75x. Since comprehensive outpatient rehabilitation facilities (CORFs) do not provide mental health therapeutic services, the limitation does not apply to CORF services. Note that 96152 Health and behavior intervention, each 15 minutes, face-to-face; individual is the only CPT® code allowed for behavioral health services provided in a CORF, and this service is not subject to the limitation.

When the primary diagnosis reported for a particular service is Alzheimer’s disease or a related disorder, your Medicare contractor will look to the nature of the rendered service in determining whether it is subject to the limitation.

Alzheimer’s disease is coded with ICD-9-CM 331.0 Alzheimer’s disease, which is outside the diagnosis code range 290-319 that represents mental, psychoneurotic, and personality disorders potentially subject to the limitation. Alzheimer’s related disorders are identified by Medicare contractors under ICD-9 codes outside the 290-319 diagnosis code range.

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 (such as described under CPT® code 90862 Pharmacologic management, including prescription, use, and review of medication with no more than minimal medical psychotherapy or any successor code) and is not subject to the limitation. It is subject to the limitation, however, when the primary treatment rendered to a patient with a diagnosis of Alzheimer’s disease or a related disorder is solely psychotherapy.


Source: MLN Matters article MM6686, and CMS Transmittal 114, CR 6686.

One Response to “Outpatient Mental Health Treatment Limitation Set”

  1. Surani says:

    A friend loaned me a copy of a new 2009 documentary film called “I Remember Better When I Paint”. The film is about how the creative arts are being used around the world to treat Alzheimer’s patients, to regain quality of life and help to open up memory and communications channels, with positive, dramatic effects. Am wondering if this type of treatment would be covered by medicare.

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