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Richard S. Cooper. Esq., Member, McDonald Hopkins LLC

CMS Expands Medicare Payment for Behavioral Health Services

By Richard S. Cooper, Esq.
McDonald Hopkins LLC

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Original Publish Date: December 6, 2016

Commencing January 1, 2017, Medicare will pay for mental and behavioral health services under new billing codes set forth in the 2017 Medicare Physician Fee Schedule Final Rule (the “MPFS Final Rule”) issued by the Centers for Medicare & Medicaid Services (CMS) on November 2, 2016.

Psychiatric Collaborative Care Model (3 New Codes: G0502, G0503, and G0504)

CMS is establishing four new behavioral health integration (BHI) billing codes, three of which apply to care provided under the psychiatric Collaborative Care Model (“CoCM”) by a primary care team consisting of a treating physician or other qualified health care professional (e.g., a nurse practitioner (NP) or physician assistant (PA))1 and a behavioral health care manager working in collaboration with a psychiatric consultant. The three CoCM G codes2 describe psychiatric collaborative care management directed by the treating physician in consultation with a behavioral health care manager:

The CoCM services can be furnished when the beneficiary has one or more psychiatric or behavioral health conditions (including substance abuse disorders) that, in the treating physician’s judgment, warrant a behavioral health care assessment, a care plan, and brief interventions. In its commentary, CMS elaborated on several key points: (1) the patient must present with a psychiatric or behavioral health condition that, in the clinical judgment of the treating physician, warrants referral to the behavioral health care manager for further assessment and treatment through CoCM services, (2) the diagnosis may be pre-existing or established by the treating physician, and (3)) the CoCM codes are not limited to a particular set of behavioral health conditions.

The CoCM codes can only be reported by a treating physician who directs the behavioral health care manager and oversees the beneficiary’s care. The physician must remain involved in ongoing oversight, management, collaboration, and assessment for the duration of the time that he or she is reporting it. CMS expects most CoCM services to be performed by primary care practitioners, but recognizes that the CoCM codes can also be billed in other medical specialty settings when the physician manages the beneficiary’s behavioral health and other conditions. CMS generally does not expect psychiatrists to bill the CoCM codes, because psychiatric work is defined as a sub-component of the CoCM codes.

The MPFS Final Rule also describes the roles and qualifications of the behavioral health care manager and the psychiatric consultant, both of whom are subject to the “incident to” rules and regulations as well as state law, licensure, and scope of practice. The MPFS Final Rule revises the “incident to” regulation to allow general supervision (rather than the more stringent direct supervision standard in place for most “incident to” services) for the CoCM and general BHI codes as well as the non-face-to-face portion of other designated care management services such as complex chronic care management.3

The behavioral health care manager must have formal education or specialized training in behavioral health. CMS recognizes social work, nursing and psychology as acceptable disciplines. The responsibilities of the behavioral health care manager include:

The proposed rule would have required the behavioral health care manager to be a member of the treating physician’s clinical staff and to be located on site. CMS now recognizes that some CoCM services can be contracted out to third parties and that a behavioral health care manager may provide his or her services from remote locations. The behavioral health care manager must be available to provide services on a face-to-face basis, but CMS does not require face-to-face services.

The psychiatric consultant must be a medical professional (e.g., a psychiatrist or an NP with psychiatry board-certification) trained in psychiatry and qualified to prescribe the full range of medications. The psychiatric consultant advises and makes psychiatric and other medical care recommendations that are communicated to the treating physician, typically through the behavioral health care manager. The psychiatric consultant does not typically see the beneficiary or prescribe medications, except in rare circumstances, but should facilitate referral for direct psychiatric care when clinically indicated.

General Care Management for Behavioral Health Conditions (One New General Code: G0507)

CMS is also adding a new general BHI code (G0507) covering care management services of behavioral health conditions for at least 20 minutes of clinical staff time per month. The following elements must be satisfied:

Like the three CoCM codes, G0507 is reported by the treating physician4 for services furnished when the beneficiary has one or more psychiatric or behavioral health conditions that, in the treating physician’s clinical judgment, require a behavioral health care assessment, behavioral health care planning, and interventions.

Services under G0507 may be provided by the treating physician or by clinical staff under his or her direction. Clinical staff members providing services under G0507 are not required to satisfy specific qualifications such as those set forth in the CoCM standards for a behavioral health care manager or psychiatric consultant.

All of the CoCM and general BHI codes require an initiating visit that is separately billable, as well as prior beneficiary consent.

Assessment and Care Planning for Patients with Cognitive Impairment (One New Code: G0505)

New code G0505 will cover assessment and care planning for patients with cognitive impairment, such as Alzheimer’s disease or dementia, if the following elements are satisfied:

All of the specified elements under G0505 must be performed by the billing physician.


The new codes for CoCM, general BHI, and cognitive impairment assessment offer new sources of revenue for care management services relating to mental health. Physician practices and other providers, however, need to take care to establish appropriate policies and procedures to ensure that all requirements are satisfied and documented for billing and compliance purposes.

Mr. Cooper provides legal representation to a broad range of hospitals, other healthcare facilities and physician groups across the United States. He has been listed in The Best Lawyers in America for health law for twenty-three consecutive years and selected for inclusion in Ohio Super Lawyers (2005-2015).

Visit the McDonald Hopkins LLC web site at

1 In the interest of simplicity, this article generally refers to the treating physician or other qualifying health care professional as the “physician” even though the new codes are not limited to physicians and apply to other health care providers such as NPs and PAs.
2 G codes (rather than CPT codes) will initially be used because the new CPT codes that have been approved by the CPT Editorial Panel will not be ready until 2018.
3 The “incident to” regulation already applies the general supervision standard to chronic care management and transitional care management.
4 Or other qualified health care professional.