Psychotherapy Coverage Criteria: Treatment Plans

Individualized Treatment Plan: (A plan is not required if only a few brief services will be furnished)

• The plan must include:
  • Date plan was established (can be no older than one year prior to the date of service on the claim)
  • Type of services to be furnished
  • Amount of services to be furnished (anticipated session length)
  • Frequency of services to be furnished
  • Duration of the services to be furnished (can be a target date; however, less than one year)
  • Diagnoses
  • Anticipated goals
  • Signature approved provider of service, with credentials

Frequency and Duration of Services

There are no specific limits on the length of time that services may be covered. There are many factors that affect the outcome of treatment; among them are the nature of the illness, prior history, the goals of treatment and the patient's response. As long as the evidence shows that the patient continues to show improvement in accordance with his/her individualized treatment plan and the frequency of services is within accepted norms of medical practice, coverage may be continued.

When a patient reaches a point in his/her treatment where further improvement does not appear to be indicated and there is no reasonable expectation of improvement, the outpatient psychiatric services are no longer considered reasonable or medically necessary.

Reasonable Expectation of Improvement

Services must be for the purpose of diagnostic study or reasonably be expected to improve the patient's condition. The treatment must, at a minimum, be designed to reduce or control the patient's psychiatric symptoms so as to prevent relapse or hospitalization, and improve or maintain the patient's level of functioning. When stability can be maintained without further treatment or with less intensive treatment, the psychological services are no longer medically necessary.

It is not necessary that a course of therapy have as its goal restoration of the patient to the level of functioning exhibited prior to the onset of the illness, although this may be appropriate for some patients. For many other psychiatric patients, particularly those with long-term, chronic conditions, control of symptoms and maintenance of a functional level to avoid further deterioration or hospitalization is an acceptable expectation of improvement. "Improvement" in this context is measured by comparing the effect of continuing treatment versus discontinuing it. Where there is a reasonable expectation that if treatment services were withdrawn the patient's condition would deteriorate, relapse further, or require hospitalization, this criterion would be met (Centers for Medicare & Medicaid Services (CMS) Internet-Only Manual (IOM) Publication 100-02, Medicare Benefit Policy Manual, Chapter 6, Section 70.1).

Related Content

• Local Coverage Determination (LCD): Psychiatry and Psychology Services (L33632)
• Local Coverage Article: Billing and Coding: Psychiatry and Psychology Services (A56937)
• Local Coverage Article: Psychological Services Coverage under the Incident to Provision for Physicians and Non-physicians – Medical Policy Article (A52825)
• YouTube Video “Psychotherapy and Individual Therapy” by NGS

 Posted 2/8/2021