How to Bill Medicaid for Mental Health Services (MHS)

How to Bill Medicaid for Mental Health Services (MHS)


Medicaid Services are provided to those who can not have an insurance policy or cannot pay for health services. Medicaid Services are implemented by the state favoring low-income people, pregnant women, the disabled, and those who need treatment for long-term for various illnesses.

Medicaid services include access to healthcare, evaluation, treatment, and rehabilitation. Medicaid covers healthcare services for physical as well as mental illnesses. The services and eligibility criteria may vary from state to state.

Medicaid coverage for mental health services:

The Medicaid programs are almost always designed to provide treatment or rehabilitation for various mental illnesses. In most cases, the service coverage is the same for psychological and physical health.

In the case of mental illness, psychotherapy and behavioral treatment are considered essential. Counseling services are part of behavioral treatment. Mental health services include consultation with other providers, coordination, outreach, education, and screening and treatment.

The mental health services include drug abuse rehabilitation, which comes under substance use disorder. Medicaid services cover both residential inpatients and outpatients. Some mental health services like career counseling, chiropractic care, holistic treatments, and coaching do not come under the domain of Medicaid Services.

Billing for mental health services:

How to bill Medicaid for mental health services

How to bill Medicaid for mental health services – Billing for mental health services

The documentation and coding for services are essential to the health care system to extract maximum reimbursement. Doing this helps keep track of refunds and the costs of the services.

To avoid significant financial loss and penalties, healthcare providers must document the service efficiently.

Billing for Diagnosis:

For the sake of billing for diagnosis, the International Classification of Diseases (ICD) coding system is followed more frequently with the mental health CPT codes.

The second option is the 90801 code of Current Procedural Terminology (CPT) under the Psychiatry heading. The American Medical Association introduces the CPT coding system. This system uses numbers assigned to all healthcare services that insurers use to determine the amount of payment a practitioner will get.

Healthcare providers can use this coding system in several settings, including consultations, residential patients, outpatients, or nursing homes.

Diagnosis covers:

  • Chief and present complaint
  • Medical and psychiatric history
  • Family history
  • Social history
  • Complete mental examination
  • Laboratory tests

The International Classification of Diseases (ICD) system uses ICD-10-CM codes for mental health diagnosis.

Billing for Mental Health Treatment:

Two coding systems are most frequently used while billing for the treatment of mental illness:

  1. Current Procedural Terminology (CPT) coding system
  2. Healthcare Common Procedure Coding System (HCPCS)

CPT coding for Mental health therapy:

CPT codes ranging between 90802-90899 for therapeutic documentation are used for mental health services.

HCPCS coding for mental health services:

HCPCS codes are primarily used while billing for Medicare and Medicaid Services. deal with these codes.

There are two levels of HCPCS codes that relate to medical services:

Level I: Level I of HCPCS is the CPT coding system. The codes in this classification are numeric codes only, e.g., 90899.

Level II: This level deals with the Alpha Numeric codes not mentioned or classified in the CPT coding. The grouping of these codes is denoted by the letters. These codes represent the services as follows:

A- codes: Transportation, Supplies, and Miscellaneous

B-codes: Parenteral and Enteral Therapy

C-codes: Outpatient Payment

D-codes: Dental Care

E-codes: Medical Equipment

G-codes: Temporary Procedural and Professional Services

H-codes: Rehabilitation

J-codes: Drugs administered other than orally

K-codes: Medical equipment carriers

L-codes: Orthotic and Prosthetic care

M-codes: Medical Services

P-codes: Pathology and laboratory services

Q-codes: Temporary codes

R-codes: Diagnostic Radiology

S-codes: Codes for Private Payers

T-codes: State Medicaid Agency

V-codes: Vision and Hearing

HCPCS codes specifically used for Medicaid mental services:

Only the H, T, and G series of HCPCS codes are used for billing Medicaid mental health services.

Documentation of the medical records:

A successful billing process depends mainly on documenting all the medical records and health services. Psychiatrists use the codes to cover various areas, including counseling, diagnostic techniques, results, risks, benefits, follow-up, and prognosis.

The records must be complete and comprehensive; documentation should include the chief complaint and medical, social, and financial history. It makes the process of consultation smoother and quicker.

The Healthcare providers are instructed to check the eligibility for Medicaid Services by calling the insurance card through customer services and asking them to verify the eligibility. For this purpose, they must provide their NPI and Tax ID, the patient’s name, date of birth, and a Subscriber ID. They should also ask for patients’ copay and coinsurance and keep a record of them.

Mental Health Services Billing Guide:

In the case of Medicaid care being the payer of the services, the providers may follow these codes for Small Practices:

Screening Psychotherapy:

Provider types: Medical Doctor (MD), Physician Assistant (PA), Registered Nurse (RN), Licensed Clinical Social Worker (LCSW)/Licensed Master Social Worker (LMSW)


Screening for Depression (including Attention-deficit-hyperactive-syndrome and anxiety):

  • 99201-99205 (CPT codes) for screening and managing new patients in the doctor’s office.
  • 99212-99215 (CPT codes) for screening and managing the established patients
  • G8431 and G8510 (HCPCS Level II) for the depression screening with positive and negative results, respectively.

Screening for drugs and alcohol:

H0049 (HCPCS code) for the screening of drugs and alcohol.

Screening for Substance use and abuse: G0442 (HCPCS code) for annual substance abuse screening.

Interventional (Psychotherapy):

Provider types: Medical Doctor (MD), Nurse Practitioner (NP), Physician Assistant (PA), Licensed Clinical Social Worker (LCSW)/Licensed Master Social Worker (LMSW)


Follow-up and treatment plan: 90832, 90834, and 90837 (CPT codes) for the Psychotherapy for 30, 45, and 60 minutes respectively.

H0050 (HCPCS code) for brief alcohol and drug abuse intervention (15 minutes).

Pharmacological Management:

Provider types:

Licensed Clinical Social Worker (LCSW) and Primary Care Provider (PCP)


90863 is the CPT code for a Medication review in the case of LCSW as a service provider. In contrast, 99201-99215 (CPT codes) are evaluation and management services for a Medication review in the case of PCP as a service provider.

For Large Practices:

For large practices, the coding is the same as that of smaller ones except for the service providers being Medical Doctor (MD), Physician Assistant (PA), Nurse Practitioner (NP), Certified Nurse Midwife (CNM), Clinical Nurse Specialist (CNS), and Licensed Clinical Social Worker (LCSW)/Licensed Master Social Worker (LMSW).

Mental Health billing is different from medical Billing because it requires the pre-authorization of the mental health services before the patients file for claims. Unlike other medical services, mental health services lack the administrative staff to deal with Billing and coding.

The services mental health professionals offer are often customized. It makes the process of Billing more complicated and time-consuming. It also makes creating the Superbill (many services combined into one bill) more challenging.

Why is Billing necessary?

The Billing helps in improving general practices of Mental Healthcare. It makes the process more efficient and easy. It enhances the quality of healthcare services. The billing service takes care of the insurance claims and payment process and makes it easier for the practitioner to deal with the companies.

The Billing for mental health services:

  • Enhance access to therapy by taking care of the financial processing.
  • Decrease the complications in payment hence improving the provider-patient relationship.
  • Improve the quality of healthcare by sparing health providers of all financial burdens.

The insurance companies will only pay the mental health providers if the patient’s insurance covers the mental health services. Mental Health billing service verifies this insurance and deals with the payments saving time and effort for the providers to get engaged in the payment processing themselves.

Billing will enable mental health providers to adhere to the patient’s treatment, improving the doctor-patient relationship, which is key to an ideal healthcare system. The mental health professional will be able to acquire more patients this way, expanding the overall income.


Timalyn Bowens; Does Medicaid Cover Therapy? A Guide to Mental Health Services and Medicaid Coverage; GoodRx Health; May 24, 2022.

Richard J. Goldberg; Billing for psychiatric evaluations: options for coding and reimbursement; General Hospital Psychiatry, Volume 26, Issue 4; 2004.

Indiana Administrative Code; Medicaid Rehabilitation Option Services; 2022.

Indiana Health Coverage Programs; Mental Health and Addiction Treatment; Behavioral Health Services; 2022.

eMEDNY; New York State Medicaid General Billing Guidelines; 2022.

Washington Apple Health (Medicaid); Mental Health Billing Services Guide; 2022.

See Also

Medical Billing and Coding Salary

How to Apply Medical Billing and Coding Schools

Best Medical Billing Companies

Medical Billing and Coding Grants

Insurance Claim Types

Podiatry Billing and Coding Guidelines

Current Version
December 26, 2022
Written By
Asher Ashfaq, OMPT, PT, CPC, CMP

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