Compliance with the provisions in this policy may be monitored and addressed
through post payment data analysis and subsequent medical review audits.  
  
 **History/Background and/or General Information  
  
** This LCD provides guidelines for many psychiatric services. However, this
LCD does not address all services, including BUT NOT LIMITED TO:

  * Speech-language pathology services for communication disorders (see LCD #L35070)

  
Psychiatric care includes the therapeutic services provided to a beneficiary
for the treatment of mental, psychoneurotic, and personality disorders which
are directed toward identifying specific behavior patterns, factors
determining such behavior, and effective goal oriented therapies.  
  
 **Providers of Mental Health Services  
  
** For approved providers of mental health services, the state licensure or
authorization must specify that the provider's scope of practice includes the
provision of clinical psychotherapy for the treatment of mental illness. It is
the responsibility of providers to be aware of their own state licensure laws
and written agreements or protocols required, including changes as they occur.  
  
Psychiatrists are physicians (MDs and DOs) trained in mental health disorders
and may provide all services described in this policy.  
  
Coverage for all non-physician practitioners is limited to services which they
are authorized to perform by the state in which they practice.  
  
 **Mental Health Services Under the "Incident to" Provision  
  
** Please see CMS IOM, Publication 100-02, _Medicare Benefit Policy Manual_ ,
Chapter 15, Section 60 and Section 80.2, for information regarding "incident
to" services  
  
A billing provider may not hire and supervise a professional whose scope of
practice is outside the hiring provider's own scope of practice as authorized
under State law, or whose professional qualifications exceed those of the
supervising provider.  
  
The training requirements and state licensure or authorization of individuals
who perform psychological services are intended to ensure an adequate level of
expertise in the cognitive skills required for the performance of diagnostic
and therapeutic psychological services.  
  
Please see IOM 100-02, _Medicare Benefit Policy Manual_ , Chapter 15, Section
80.2 for information regarding tests performed by technicians.  
  
 **Section I: Psychiatric Diagnostic Evaluation  
  
** **Indications**

  1. The diagnostic evaluation is a biopsychosocial assessment.
  2. The diagnostic evaluation with medical services is a biopsychosocial **and** medical assessment.
  3. Both of these evaluations may include discussion with family or other sources in addition to the patient.
  4. The diagnostic interview is indicated for initial or periodic diagnostic evaluation of a patient for suspected or diagnosed psychiatric illness.
  5. An additional diagnostic evaluation service may be considered medically reasonable and necessary for the same patient if a new episode of illness occurs, an admission or a readmission to inpatient status due to complications of the underlying condition occurs, or when re-evaluation is required to address a new referral question. Certain patients, especially children and geriatric patients may require more than one visit for the completion of the initial diagnostic evaluation. The indication for the assessment should be based on medical necessity and supported in the medical record.
  6. Interactive procedures may be necessary and considered reasonable and necessary for patients whose ability to communicate is impaired by expressive or receptive language impairment from various causes. These may include conductive or sensorineural hearing loss, deaf mutism, aphasia, language barrier, or lack of mental development (childhood).
  7. The Bariatric Surgical Management of Morbid Obesity LCD (L35022) provides specific criteria that support the medical necessity of the psychiatric diagnostic interview. Please refer to LCD L35022 for the specific criteria.
  8. Coverage for the diagnostic interview is limited to physicians (MDs, DOs), Clinical Social Workers (CSWs), Clinical Psychologists (CPs), Clinical Nurse Specialists (CNSs), Physician Assistants (PAs) and Nurse Practitioners (NPs) certified in the state or jurisdiction for psychiatric services.

**  
Section II: Psychological and Neuropsychological Testing**  
  
 **Indications**

  1. These diagnostic tests are used when mental illness is suspected, and clarification is essential for the diagnosis and the treatment plan.
  2. Testing conducted when no mental illness/disability is suspected would be considered screening and would not be covered by Medicare. Non-specific behaviors that do not suggest the possibility of mental illness or disability are not an acceptable indication for testing.
  3. Examples of problems that might require psychological or neuropsychological testing include: 
    * Assessment of mental functioning for individuals with suspected or known mental disorders for purposes of differential diagnosis or treatment planning.
    * Assessment of patient strengths and disabilities for use in treatment planning or management when signs or symptoms of a mental disorder are present.
    * Assessment of patient capacity for decision-making when impairment is suspected that would affect patient care or management.
    * Differential diagnosis between psychogenic and neurogenic syndromes (e.g., depression versus dementia).
    * Detection of neurologic disease based on quantitative assessment of neurocognitive abilities (e.g., mild head injury, anoxic injuries, Acquired Immune Deficiency Syndrome [AIDS] dementia).
    * Delineation of the neurocognitive effects of central nervous system disorders.
    * Neurocognitive monitoring of recovery or progression of central nervous system disorders.
  4. When a psychiatric condition or the presence of dementia has already been diagnosed, there is value to the testing only if the information derived from the testing would be expected to have significant impact on the understanding and treatment of the patient. Examples include: 
    * Significant change in the patient's condition.
    * The need to evaluate a patient's capacity to function in a given situation or environment.
    * The need to specifically tailor therapeutic and or compensatory techniques to particular aspects of the patient's pattern of strengths and disabilities.
  5. Adjustment reactions or dysphoria associated with moving to a nursing home do not automatically constitute medical necessity for testing. Testing of every patient upon entry to a nursing home would be considered a routine service and would not be covered by Medicare. However, some individuals enter a nursing home at a time of physical and cognitive decline, and may require psychological testing to arrive at a diagnosis and plan of care. Decisions to test individuals who have recently entered a nursing home need to be made judiciously, on a case-by-case basis. Medical necessity of such evaluations should be documented and maintained in the medical record.
  6. Each test administered must be medically necessary. Standardized batteries of tests are only acceptable if each component test is medically necessary.
  7. Depending on the issues to be assessed, a typical test battery may require 7 to 10 hours to perform, including administration, scoring and interpretation.
  8. Formal evaluation of aphasia with an instrument such as the Boston Diagnostic Aphasia Examination performed during treatment, is typically performed only once during treatment and its medical necessity should be documented. If the test is repeated during treatment, the medical necessity of the repeat administration of the test must also be documented.

**Rendering Providers**

  1. Physical Therapists (PTs), Occupational Therapists (OTs), and Speech Language Pathologists (SLPs) may perform assessment of aphasia with interpretation and report, developmental test administration performed by physician or other qualified health care professional, with interpretation and report and development testing, with interpretation and report, per standardized instrument form under the general supervision of a physician or a CP.
  2. Independently Practicing Psychologists (IPPs) may provide psychological and neuropsychological tests when the tests are ordered by a physician. Please see CMS IOM Publication 100-02, _Medicare Benefit Policy Manual_ , Chapter 15, Section 80.2 for information regarding non-physician practitioners (NPPs), such as NPs, CNSs and PAs who personally perform diagnostic psychological and neuropsychological tests and psychological and neuropsychological tests on an "incident to" basis.

**Limitations  
  
** The following are considered not medically reasonable:

  1. Routine re-evaluation of chronically disabled patients that is not required for a diagnosis or continued treatment is not medically reasonable and necessary.
  2. Brief screening measures such as the Folstein Mini-Mental Status Exam or use of other mental status exams in isolation should not be classified separately as psychological or neuropsychological testing, since they are typically part of a more general clinical exam or interview.

**  
Section III: Psychotherapy Services  
  
** Psychotherapy is the treatment for mental illness and behavior disturbances
in which the clinician establishes a professional contract with the patient
and, through definitive therapeutic communication, attempts to alleviate the
emotional disturbances, reverse or change maladaptive patterns of behavior,
and encourage personality growth and development.  
  
 **Indications**

  1. Psychotherapy will be considered medically reasonable and necessary when the patient has a psychiatric illness or is demonstrating emotional or behavioral symptoms sufficient to cause inappropriate behavior or maladaptive functioning.
  2. Psychotherapy services must be comprised of clinically recognized therapies that are pertinent to the patient's illness or condition. The type, frequency and duration of services must be medically necessary for the patient's condition under accepted practice standards.
  3. There must be a reasonable expectation of improvement in the patient's disorder or condition, demonstrated by an improved level of functioning, or maintenance of level of functioning where decline would otherwise be expected in the case of a disabling mental illness or condition, or chronic mental disorders.
  4. The patient must have the capacity to actively participate in all therapies prescribed.
  5. To benefit from psychotherapy, an individual must be cognitively intact to the degree that he/she can engage in a meaningful verbal interaction with the therapist.
  6. For patients suffering from dementia, the type and degree of dementia must be taken into account in planning and evaluating effective psychotherapeutic interventions. If psychotherapy is provided to a patient with dementia, the patient's record should support that the patient's cognitive level of functioning was sufficient to permit the patient to participate meaningfully in the treatment.
  7. The duration of psychotherapy must be individualized for every patient. The provider of service must document in the patient's record the medical necessity for continued (prolonged) treatments.
  8. Group therapy is defined as psychotherapy administered in a group setting with a trained group leader in charge of several patients. The group should not exceed 10 participants and the sessions should be at least 45 to 60 minutes in duration. While a video or movie may be used as an adjunct to the sessions, this modality should not be used as a replacement for the therapist's active participation and the majority of the session should involve the interaction between the participants and the therapist leading the session. If group psychotherapy is provided to a patient with dementia, the patient's record should document that the patient's cognitive level of functioning was sufficient to permit the patient to participate meaningfully in the treatment.
  9. Family therapy will be considered medically reasonable and necessary only for treatment of the Medicare beneficiary's mental illness and not the family member's problems. Family therapy is appropriate when intervention in the family interactions would be expected to improve or stabilize the patient's emotional/behavioral disturbance. Family therapy is commonly the major treatment, especially for children and also for the elderly. Where both husband and wife are covered by Medicare, such therapy may be the most effective treatment for both individuals.
  10. Family psychotherapy without the patient present does not represent routine consultation with staff about the patient's progress and treatment. Facility staff members are not considered caregivers for purposes of this policy; however, caretakers in group-living facilities may be considered caregivers for the purpose of this policy.

**  
Rendering Providers  
  
** Psychiatrists, CPs, CSWs, psychiatric nurse practitioners, CNSs and PAs may
provide all psychotherapy services described in this section with the
following exceptions:

  * CNSs may not render psychoanalysis services.
  * Please see CMS IOM 100-02, _Medicare Benefit Policy Manual_ , Chapter 15, Section 170 regarding CSW services.
  * Please see CMS IOM 100-02, _Medicare Benefit Policy Manual_ , Chapter 15, for information on providers that may render psychotherapy codes that include an evaluation and management (E/M) component. Each element of these services (therapy and E/M) must be medically reasonable and necessary and should be documented in the patient's records. 

**  
Limitations**

  1. Psychotherapy services are not considered medically reasonable and necessary when documentation indicates that dementia has produced a severe enough cognitive defect to prevent establishment of a relationship with the therapist, which allows insight-oriented, behavior-modifying or supportive therapy to be effective.
  2. Psychotherapy services are never covered for severe and profound mental retardation. Severe mental retardation is defined as an IQ 20-34 and profound mental retardation is defined as an IQ under 20.
  3. Psychotherapy services are not considered medically reasonable and necessary when they primarily include teaching grooming skills, monitoring activities of daily living, recreational therapy (dance, art, play) or social interaction.
  4. Family therapy sessions with a patient whose emotional disturbance would be unaffected by changes in the patterns of family interaction (i.e., a comatose patient) would not be considered medically reasonable and necessary. Similarly, an emotional disturbance in a family member, which does not impact on the Medicare patient's status, would not be covered by that patient's Medicare benefits.

**  
Section IV: Other Psychiatric and Psychological Services  
  
** **Indications**

  1. Narcosynthesis is indicated for patients who have difficulty verbalizing psychiatric problems without the aid of the drug.
  2. Electroconvulsive therapy (ECT) is used in the treatment of depression and related disorders and other severe psychiatric conditions. 
    * When a psychiatrist administers the anesthesia for an ECT procedure, the anesthesia service is considered part of the ECT procedure.

  
For frequency limitations please refer to the Utilization Guidelines section
below.  
  
 **Notice:** Services performed for any given diagnosis must meet all of the
indications and limitations stated in this policy, the general requirements
for medical necessity as stated in CMS payment policy manuals, any and all
existing CMS national coverage determinations, and all Medicare payment rules.  
  
The redetermination process may be utilized for consideration of services
performed outside of the reasonable and necessary requirements in this LCD.