Medicare coverage

Medicare allows for the billing of “incident to” services performed by ancillary personnel under the supervision of a qualified Medicare provider. Services furnished “incident to” a psychologist’s services are covered by Medicare if they meet specified requirements outlined in Chapter 15 of the CMS Publication 100-02opens in new window, Medicare Benefit Policy Manual. These requirements state that the services must be:

• Mental health services that are commonly furnished in a psychologist’s office
• An integral, although incidental, part of the professional services performed by the psychologist
• Performed under the direct personal supervision of the psychologist
• Furnished without charge or included in the psychologist’s bill
• Performed by an employee of the clinical psychologist (or an employee of the legal entity that employs the supervising clinical psychologist) under the common law control test of the Act, as set forth in 20 CFR 404.1007opens in new window and §RS 2101.020 of the Retirement and Survivors Insurance part of the Social Security Program Operations Manual System
• Diagnostic psychological testing services when furnished under the general supervision of a clinical psychologist

Psychologists should closely review their MAC’s LCDs, when available, for any limitations or restrictions on “incident to” services.

Definition of auxiliary personnel

Effective January 1, 2015, CMS required that all “incident to” services and supplies must be furnished in accordance with applicable state law. The definition of auxiliary personnel was also clarified to require that the individual furnishing “incident to” services must meet any applicable requirements to provide such services, including licensure, imposed by the state in which the services are furnished.

Any person performing an “incident to” service must be an employee (part-time, full-time), a leased employee, or independent contractor of the psychologist or an employee of the legal entity that employs or contracts with the supervising psychologist.

A leased employee is a person working under a written employee leasing agreement which provides that:

• The ancillary personnel, although employed by the leasing company, provides services as a leased employee of the psychologist (or the entity that employs the psychologist).
• The psychologist (or the psychologist’s employer) exercises control over all actions taken by the leased employee to the same extent as the psychologist/employer would if the leased employee was directly employed by the psychologist/employer.

Individuals who are not licensed or otherwise authorized by state law to provide psychological services may not provide psychological services under the “incident to” provision. This level of professional credentialing is necessary to furnish appropriate medically necessary services under the “incident to” provision. However, individuals who are performing services “incident to” a qualified Medicare practitioner are not required to be separately enrolled as an independent practitioner in Medicare.

Further, it is not permissible for the psychologist to hire and supervise a professional whose scope of practice is outside the provider’s own scope of practice as authorized under state law, or whose professional qualifications exceed those of the “supervising” provider. For example, a certified nurse-midwife (CNM) may not hire a psychologist and bill for that psychologist’s services under the “incident to” provision, because a psychologist’s services are not integral to a CNM’s personal professional services and are not regularly included in the CNM’s bill. Even though sections Section 1861(s)(2)(H) and 1861(ii) of the Social Security Act (PDF: 2.9MB)opens in new window authorize coverage for services furnished “incident to” a psychologist’s services, CNM services are not commonly furnished in psychologist’s offices nor within their scope of practice.

Interns and postdoctoral graduate students

Medicare does not allow for services provided by interns or postdoctoral graduate students to be billed under the “incident to” provisions. Medicare considers services furnished by interns or postdoctoral graduate students to be training and therefore not eligible for Part B funding.

Telehealth in Medicare allows psychologists to bill for certain services furnished to a Medicare beneficiary via a telecommunications system. Telehealth is generally available for Part B services furnished to beneficiaries enrolled in fee-for-service Medicare but may be available in Medicare Advantage.

In the Physician Fee Schedule for CY 2026, CMS permanently allowed psychologists to report all services that were previously only billable as a telehealth service on a provisional basis; in this rule, CMS also allowed additional services, such as Multiple-family group psychotherapy (CPT code 90849) and Face-to-face behavioral counseling for obesity, group (2-10), 30 minutes (HCPCS code G0473), to be furnished via telehealth.

Several requirements must be met for a psychologist to bill for telehealth services:

Technology requirements

The service must generally be provided using an interactive audio and video telecommunications system that permits real-time communication between the psychologist and the beneficiary. However, coverage of telehealth services furnished via 2-way, interactive, audio-only technology is available if the psychologist is technically capable of using an audio-video telehealth system and the patient is in their home but is not capable of, or does not consent to, using video technology.

Location of beneficiary

Congress permanently repealed former requirements that patients receiving behavioral/mental health care via telehealth must be physically located at certain types of facilities and locations (distant sites).

Congress also enacted a requirement that patients receiving behavioral/mental health treatment via telehealth must receive an in-person visit within six months of an initial Medicare behavioral/mental telehealth service, and once each year thereafter. However, the in-person visit requirement has never been implemented, as Congress continues to delay this requirement from going into effect.

Not all services furnished by psychologists are covered under Medicare. To be reimbursed by Medicare, any service performed by a psychologist must be medically necessary and within the scope of his/her license under state law. The service must directly benefit the Medicare patient.

Medically necessary services are defined as “health care services or supplies needed to diagnose or treat an illness, injury, condition, disease or its symptoms and that meet accepted standards of medicine.” (see HealthCare.gov glossaryopens in new window)

Services Medicare does not cover

Health and behavior family services without the patient

Because Medicare services must directly benefit the patient to be reimbursed, a health behavior family intervention without the patient present, reported using CPT^® codes 96170, 96171, are excluded from Medicare coverage. Medicare does however cover a health behavior family intervention family with the patient, reported using codes 96167, 96168.

Psychophysiological therapy incorporating biofeedback

Individual psychophysiological therapy incorporating biofeedback training with psychotherapy is captured by two codes—code 90875 is reported when the service is furnished for 30 minutes, and code 90876 is reported for a 45-minute service—neither of which are covered by Medicare.

Pharmacologic management

As of May 2026, there are eight states (Colorado, Idaho, Illinois, Iowa, Louisiana, New Mexico, Utah, and Vermont) that grant prescriptive authority to qualified psychologists which allows Medicaid, Medicare Advantage plans, and commercial payers to reimburse psychologists with prescriptive authority for evaluation and management (E/M) services (codes 99202–99205, 99211–99215), for the purpose of furnishing medication management services.

Psychologists with prescriptive authority who provide E/M services as well as psychotherapy have two reporting options depending on the type of service delivered. They can report an appropriate E/M code along with a psychotherapy add-on code (90833, 90836, or 90838) if both E/M and psychotherapy are provided, or they can simply report an E/M code if they provide pharmacologic management but not psychotherapy.

If a psychologist expects that a service will not be covered by Medicare, the psychologist should send the beneficiary an advance beneficiary notice (ABN), before providing the noncovered series of treatments, alerting the beneficiary that they may be responsible for the entire cost of the service. If the treatment is expected to be ongoing, the psychologist can provide the beneficiary with an ABN clearly listing all items/services that will be provided and must specify the duration (e.g., start and end dates) of the treatment period.

ABNs in both English and Spanish, as well as information about potentially noncovered services provided in hospitals, skilled nursing facilities, and home health agencies, are available on the CMS websiteopens in new window.

ABNs are intended to protect both providers and beneficiaries. Beneficiaries who are alerted that a service may not be covered by Medicare may then decide when or if they still wish to obtain the service. Using an ABN allows the provider to seek payment from the beneficiary if Medicare does not cover the service.

Beneficiaries must sign the ABN. If a beneficiary refuses to sign, and the psychologist decides to continue to provide the service regardless, the psychologist can only collect payment from the beneficiary if the beneficiary’s refusal to sign was witnessed and documented. Documentation of the beneficiary’s refusal to sign must include the date of the refusal, who refused to sign (i.e., the beneficiary or a representative), the identity and signature of the witness, the service identified in the ABN, and the date the service was provided.

When submitting a claim to Medicare for a service the psychologist expects will be denied, the psychologist must submit their claim with the appropriate modifier (–GA, –GX, –GY, or –GZ).

The –GA modifier (“Waiver of Liability Statement Issued as Required by Payer Policy”) should be used when physicians, practitioners, or suppliers want to indicate that they anticipate Medicare will deny a specific service as not reasonable and necessary, and they do have an ABN signed by the beneficiary on file. The –GA can also be reported when a patient refuses to sign the ABN and the latter is properly witnessed.

Modifier GX (“Notice of Liability Issued, Voluntary Under Payer Policy”) should be used when the beneficiary has signed an ABN, and a denial is anticipated based on provisions other than medical necessity, such as statutory exclusions of coverage or technical issues. An ABN is not required for these denials, but noncovered services are reported with modifier GX, will automatically be denied services.

The –GZ modifier should be used when physicians, practitioners, or suppliers want to indicate that they expect Medicare will deny an item or service as not reasonable and necessary, and they have not had an ABN signed by the beneficiary. If the service is statutorily noncovered, or without a benefit category, submit the appropriate CPT/HCPCS code with the –GY modifier. An ABN is not required for these denials, and the limitation of liability does not apply for beneficiaries. Services with modifier GY will automatically deny.

For complete instructions on use of the ABN, please refer to Chapter 30 of the CMS Publication 100-04, Medicare Claims Processing Manualopens in new window.