CMS to Eliminate Outpatient Mental Health Treatment Limitation

November 19, 2009


As part of its final 2010 ruling on the physician fee schedule, the Centers for Medicare and Medicaid Services (CMS) has initiated a plan to phase out the current limitation on payment for outpatient mental health treatment. This transition is set to take place over a five-year period from 2010 to 2014, and means that Medicare will pay outpatient mental health services at the same rate as other services by 2014. Both neurologists and their patients will benefit from the provision, which applies to all psychiatric conditions listed within the range of 290–319 in the ICD-9 code book.

The announcement comes as a result of a mandate in the Medicare Improvements for Patients and Providers Act (MIPPA) enacted by Congress and is not new CMS policy. The implementation timeline, as laid out by CMS, is as follows:

  • January 1, 2010–December 31, 2011
    Limitation percentage is 68.75 percent (of which Medicare pays 55 percent and the patient pays 45 percent)

  • January 1, 2012–December 31, 2012
    Limitation percentage is 75 percent (of which Medicare pays 60 percent and the patient pays 40 percent)

  • January 1, 2013 –December 31, 2013
    Limitation percentage is 81.25 percent (of which Medicare pays 65 percent and the patient pays 35 percent)

  • January 1, 2014–onward
    Limitation percentage is 100 percent, at which time Medicare pays 80 percent and the patient pays 20 percent

Read a CMS MedLearn Matters article about this topic.