Psychiatry and Psychology are specialized fields for the diagnosis and
treatment of various mental health disorders and/or diseases.  
  
References to providers throughout this policy include physicians, and non-
physicians, such as clinical psychologists, independent psychologist, nurse
practitioners, clinical nurse specialists and physician assistants when the
services performed are within the scope of their clinical practice/education
and authorized under the state law.  
  
 **Psychiatry Services with Evaluation and Management (E/M)**  
Some psychiatry services may be reported with evaluation and management (E/M)
services or other services when performed. An E/M code may be used to report
evaluation and management services alone (no other service reported that day)
or used to report an E/M service with psychotherapy. An E/M service is based
on the physician's work and includes services medically necessary to evaluate
and treat the patient.  
  
**Psychiatric Diagnostic Evaluation**  
A psychiatric diagnostic evaluation is an integrated assessment that includes
history, mental status and recommendations. It may include communicating with
the family and ordering further diagnostic studies. A psychiatric diagnostic
evaluation with medical services includes a psychiatric diagnostic evaluation
and a medical assessment. It may require a physical exam, communication with
the family, prescription medications and ordering laboratory or other
diagnostic studies. A psychiatric diagnostic evaluation with medical services
also includes physical examination elements.  
  
Patients may need an evaluation and diagnosis by a multidisciplinary team
prior to implantation of peripheral and central nervous system stimulators for
chronic intractable pain. (See NCD 160.7 Electrical Nerve Stimulators.)  
  
The following information pertains to both psychiatric diagnostic evaluation;
and psychiatric diagnostic evaluation with medical services:

    1. Cannot be reported with an E/M code on the same day by the same provider
    2. Cannot be reported with a psychotherapy service code on the same day
    3. May only be reported once per day
    4. May be reported more than once for a patient when separate evaluations are conducted with the patient and other informants (i.e., family members, guardians, significant others) on different days. This service is considered medically necessary once every 6 months per episode of illness. *However, if reported more than once per episode of illness, documentation will be required for the establishment of medical necessity.
    5. In certain circumstances family members, guardians, or significant others may be seen in lieu of the patient.

**Interactive Complexity**  
  
Interactive Complexity refers to communication difficulties during the
psychiatric procedure.  
  
When performed with psychotherapy, the interactive complexity component
relates only to the increased work intensity of the psychotherapy service, but
does **not** change the time for the psychotherapy service.  
  
The medical record for interactive complexity reported with the psychiatric
procedures must indicate that the person being evaluated does not have the
ability to interact through normal verbal communicative channels, include
adaptations utilized in the session and the rationale for employing these
interactive techniques, and recommendations for future care.  
  
 **Psychotherapy**  
Psychotherapy is defined as the treatment for mental illness and behavioral
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 or support
current evaluation of functioning. Psychotherapy services include ongoing
assessment and adjustment of psychotherapeutic interventions and may include
involvement of family member(s) or others in the treatment process. Although
maintenance per se is not covered, helping a patient maintain his/her highest
level of functioning, such as a patient with borderline personality disorder,
may be covered on a case-by-case basis. These case-by-case considerations must
be supported by the evaluation and a plan with clearly identified goal(s).  
  
Psychotherapy time may include face to face time with family members as long
as the patient is present for part of the service.  
  
To report both E/M and psychotherapy, the two services must be significant and
separately identifiable.

    1. The type and level of E/M service is selected first based upon the key components of history, examination, and medical decision-making. For office services on or after 01/01/2021, choose the level of E/M service based on either medical decision making or time.
    2. Time associated with activities used to meet criteria for the E/M service is _not_ included in the time used for reporting the psychotherapy service (i.e., time spent on history, examination, and medical decision making when used for the E/M service is not psychotherapy time). Time may _not_ be used to determine E/M code selection. Prolonged Services may be reported when E/M and psychotherapy are reported.
    3. A separate diagnosis is _not_ required for the reporting of E/M and psychotherapy on the same date of service.

**Psychotherapy for Crisis**  
A major concept and addition to the psychotherapy section is the addition of
codes for psychotherapy for crisis when psychotherapy services are provided to
a patient who presents in high distress with complex or life-threatening
circumstances that require immediate attention.  
These codes do not include medical services. In a crisis situation,
psychiatrists may prefer the appropriate E/M code.  
  
**Documentation for Psychotherapy Services**  
The medical record must indicate the time spent in the psychotherapy encounter
and the therapeutic maneuvers, such as behavior modification, supportive or
interpretive interactions that were applied to produce a therapeutic change.  
  
Behavior modification is not a separate service, but is an adjunctive measure
in psychotherapy. Additionally, a periodic summary of goals, progress toward
goals, and an updated treatment plan must be included in the medical record.  
  
Prolonged treatment must be well supported by the content of the medical
documentation. Documentation must be present in the medical record supporting
the medical necessity for ongoing treatment.  
  
To establish medical necessity of the service, claims must be submitted with a
covered diagnosis.  
  
 **Family Psychotherapy**  
In certain types of medical conditions, including when a patient is withdrawn
and uncommunicative due to a mental disorder for example, the provider may
contact relatives and close associates to secure background information to
assist in diagnosis and treatment planning.  
  
Family psychotherapy services are covered only where the primary purpose of
such psychotherapy is the  
treatment of the patient's condition. Examples include:

    1. When there is a need to observe and correct, through psychotherapeutic techniques, the patient's interaction with family members and/or
    2. Where there is a need to assess the conflicts or impediments within the family, and assist, through psychotherapy, the family members in the management of the patient.

**Group Psychotherapy**  
Group Psychotherapy is psychotherapy administered in a group setting with a
trained therapist simultaneously providing therapy to several patients.
Personal and group dynamics are discussed and explored in a therapeutic
setting allowing emotional catharsis, instruction, insight, and support. To
establish medical necessity of the service, claims must be submitted with a
covered diagnosis.  
  
Group therapy, since it involves psychotherapy, must be led by a person who is
authorized by state statute to perform this service. This will usually mean a
physician, clinical psychologist, clinical social worker, physician assistant,
certified nurse practitioners, clinical nurse specialist, or other person
authorized by the state to perform this service.  
  
**Limitations for Psychotherapy**  
While a variety of psychotherapeutic techniques are recognized for coverage,
the services must be performed by persons authorized by their state to render
psychotherapy services.  
  
Psychotherapy services does not include teaching grooming skills, monitoring
activities of daily living (ADL), recreational therapy (dance, art, play) or
social interaction. It also does not include oversight activities such as
housing, or financial management.  
  
Severe and profound mental retardation is never covered for psychotherapy
services.  
  
Psychotherapy services are not covered when documentation indicates that
senile dementia has produced a severe enough cognitive defect to prevent
psychotherapy from being effective.  
  
Multiple-family group psychotherapy is for those situations where family
dynamics are occurring due to a commonality of problems in the family members
under treatment and would generally be non-covered by Medicare. Such group
therapy is directed to the effects of the patient's condition on the family,
and does not meet Medicare's standards of being part of the provider personal
services to the patient.  
  
Group therapy does not include socialization, music therapy, recreational
activities, art classes, excursions, sensory stimulation or eating together,
cognitive stimulation, or motion therapy.  
  
Self-help groups or support groups without a qualified professional present
are not covered. When covered the group size should be of a size that can be
successfully led (e.g., maximum of 12 people).  
  
 **Psychoanalysis**  
The practice of psychoanalysis is using special techniques to gain insight
into and treat a patient's unconscious motivations and conflicts using the
development and resolution of a therapeutic transference to achieve
therapeutic effect. It is a different therapeutic modality than psychotherapy.  
  
The medical record must document the indications for psychoanalysis,
description of the transference, and the psychoanalytic techniques used. To
establish medical necessity of the service, claims must be submitted with a
covered diagnosis.  
  
The provider using this technique must be trained by an accredited program of
psychoanalysis.  
  
 **Narcosynthesis**  
Narcosynthesis is used for the administration of sedative or tranquilizer
drugs, usually intravenously, to relax the patient and remove inhibitions for
discussion of subjects difficult for the patient to discuss freely in the
fully conscious state.  
  
The medical record should document the medical necessity of this procedure
(e.g., the patient had difficulty verbalizing his/her psychiatric problems
without the aid of the drug). The record should also document the specific
pharmacological agent, dosage administered, and whether the technique was
effective or non-effective.  
  
 **Limitation of Narcosynthesis**  
Narcosynthesis is restricted to physicians (M.D., D.O.) only.  
  
 **Hypnotherapy**  
Hypnosis is an artificially induced alteration of consciousness in which the
patient is in a state of increased suggestibility.  
  
To establish medical necessity of the service, claims must be submitted with a
covered diagnosis.  
  
Hypnosis may be used for diagnostic or therapeutic purposes.