On November 16, the Centers for Medicare & Medicaid Services (CMS) published its Medicare Physician Fee Schedule (PFS) final rule for calendar year 2024 (PFS Final Rule). According to the CMS press release, the PFS Final Rule includes “some of the most important changes to improve access to behavioral health care in the Medicare program’s history.” Highlights include Medicare Part B coverage and payment for the services of marriage and family therapists (MFTs) and mental health counselors (MHCs); new HCPCS codes for psychotherapy for crisis services performed in certain non-office locations; and several updates related to telehealth, including the extension of certain flexibilities for opioid treatment programs (OTPs).

Many of the changes finalized by CMS are consistent with the CMS Behavioral Health Strategy, which broadly aims to strengthen quality and equity in behavioral healthcare; improve access to substance use disorders prevention, treatment and recovery services; ensure effective pain treatment and management; improve mental healthcare and services; and utilize data for effective actions and impact.

These policy changes generally take effect on January 1, 2024. Below is a summary of the key changes impacting Medicare coverage of behavioral health services.

Marriage and Family Therapists and Mental Health Counselors

The PFS Final Rule implements Medicare Part B coverage and payment policies for services furnished and directly billed by MFTs and MHCs, as required by the Consolidated Appropriations Act, 2023 (CAA). CMS will also recognize MFTs and MHCs as distant site practitioners for the purpose of furnishing telehealth services, effective January 1, 2024.

In the PFS Final Rule, CMS defines MFT services and MHC services as those furnished by an MFT or MHC, respectively, for the diagnosis and treatment of mental illness (other than services furnished to an inpatient of a hospital, since those services are paid under the hospital inpatient prospective payment system). The MFT or MHC must be legally authorized to perform the services under applicable state laws, and the services must be of a type that would be covered if they were furnished by a physician or as “incident to” a physician’s professional services. CMS also finalized its proposed definitions and qualifications for MFTs and MHCs. Recognizing that licensure terminology for MHCs and MFTs varies across states, CMS finalized its proposal to allow addiction counselors and drug and alcohol counselors who meet applicable requirements to enroll in Medicare as MHCs and bill Medicare for MHC services. Commenters supported this flexibility, noting it will increase access to care for Medicare beneficiaries with substance use disorders (SUDs). Similarly, CMS clarified that other individuals who meet the federal qualifications for MHCs, but who are licensed to furnish mental health counseling in their state under a different title, are eligible to enroll in Medicare as MHCs.

Medicare reimbursement for MFT and MHC services will be 80% of the lesser of (1) the actual charge for the services or (2) 75% of the amount that would have been paid to a clinical psychologist.

As required by the CAA, MFTs and MHCs, like many other practitioners, can only be paid by Medicare on an assignment-related basis – meaning they may not bill or collect from the beneficiary or another person for any Medicare-covered services, except for applicable deductible and coinsurance amounts. Notably, MFT and MHC services are not bundled into the skilled nursing facility prospective payment system. To allow MFTs and MHCs to bill for their services, CMS finalized certain coding updates, including changes to behavioral health integration codes.

MFTs and MHCs can already submit Medicare enrollment applications. However, MFTs’ and MHCs’ enrollment will not be effective until January 1, 2024, at the earliest; and services provided prior to January 1, 2024, are not reimbursable. CMS published a Provider Enrollment Frequently Asked Questions document for MFTs and MHCs in September 2023.

Improving Mobile Crisis Care

CMS finalized its proposal to cover psychotherapy for crisis services furnished in “an applicable site of service,” meaning any non-facility locations (e.g., home, school, shelter) other than an office setting. Psychotherapy for crisis services is appropriate when a patient is in high distress from life-threatening, complex problems that require immediate intervention.

The services include the following:

  • Providing an urgent assessment and history of a crisis state.
  • Performing a mental status exam and psychotherapy.
  • Mobilizing resources to defuse the crisis and restore safety.
  • Using interventions to minimize the potential for psychological trauma.

The full list of “non-facility” locations can be found on the CMS website – notably, effective October 1, 2023, “Outreach Site/Street” is a recognized place of service. To enable coverage of mobile psychotherapy crisis care, CMS established two new G-codes (G0017, G0018). As required by the CAA, the payment amounts for these codes will be equal to 150% of the fee schedule amounts for CPT codes 90839 and 90840, which are psychotherapy codes for crisis services commonly provided in a practitioner’s office.

The CAA requires CMS to provide education and outreach to providers, physicians, and practitioners with respect to their ability to use and bill for auxiliary personnel, including peer support specialists, in the furnishing of psychotherapy for crisis services, as well as other services that can be furnished to a Medicare beneficiary experiencing a mental or behavioral crisis. For Medicare payment purposes, “auxiliary personnel” is defined at 42 CFR 410.26 “as any individual who is acting under the supervision of a physician (or other practitioner) … and meets any applicable requirements to provide incident to services, including [state] licensure….” CMS did not propose, nor did it finalize, any changes to the definition of auxiliary personnel. CMS received and responded to several comments related to peer support specialists, some of which highlighted that furnishing psychotherapy is not within the scope of practice for peer support specialists. CMS emphasized that peer support specialists participating in the furnishing of any service as auxiliary personnel, including psychotherapy for crisis, must operate within the scope of their role as a peer support specialist and meet any applicable requirements to provide incident to services, including licensure, imposed by the relevant state.

Health Behavior Assessment and Intervention Services

CMS finalized its proposal to allow the Health Behavior Assessment and Intervention (HBAI) services to be billed by clinical social workers (CSWs), MFTs, and MHCs. HBAI codes describe services that address psychological, behavioral, emotional, cognitive, and interpersonal factors in the treatment and/or management of patients diagnosed with physical health issues and are intended to be used when the primary diagnosis is a medical condition. Historically, HBAI codes could only be used by clinical psychologists. However, CMS revisited this policy in light of the expanded coverage of services provided by MFTs and MHCs and, in doing so, decided to extend its new policy to CSWs as well. The agency explained that permitting a wider range of practitioners to furnish HBAI services will allow for better integration of physical and behavioral healthcare.


CMS made several updates and refinements in the PFS Final Rule related to telehealth services, generally continuing many of the flexibilities for Medicare telehealth services that were put in place during the COVID-19 public health emergency (PHE) at least until the end of 2024. With regard to policy changes that specifically relate to mental health services, CMS delayed the requirement for an in-person visit with the physician or practitioner within six months prior to initiating mental health telehealth services (and again at subsequent intervals) until dates of service on or after January 1, 2025. Beginning in 2025, in-person visit requirements will apply for mental health services furnished via telehealth, including an in-person visit within the six months prior to the initial telehealth treatment and subsequent in-person visits at least every 12 months, subject to limited exceptions. CMS similarly delayed in-person requirements for mental health visits furnished by Rural Health Clinics and Federally Qualified Health Centers.

In addition, CMS extended certain OTPs related flexibilities. Through the end of calendar year 2024, OPTs can furnish periodic assessments (HCPCS code G2077) via audio-only communication in cases where a beneficiary does not have access to two-way audio-video communications technology—to the extent this is authorized by the Substance Abuse and Mental Health Services Administration (SAMHSA) and the Drug Enforcement Administration (DEA) at the time the service is furnished and all other applicable requirements are satisfied. Generally, periodic assessments must be furnished during a face-to-face encounter, which can be accomplished by two-way interactive audio-video communication technology, as clinically appropriate, provided other applicable requirements are satisfied. However, in the PFS Final Rule, CMS recognized that audio-only therapy and recovery support systems provided by SUD programs have been one of the most common modes of treatment for opioid use disorder (OUD) and suggested extending this flexibility may promote health equity and minimize disparities in access to care. CMS indicated that the extension through 2024 will allow it more time to consider whether to make this audio-only flexibility permanent.

More generally, CMS highlighted that practice patterns for many mental health practitioners have evolved, with practitioners now seeing patients in office settings as well as via telehealth. The agency seemed to recognize that whether on telehealth or in-person, the practitioners were still incurring the expense of maintaining an office. In an effort to more accurately recognize the resource costs of behavioral health providers when considering shifting practice models and to protect patient access to services, CMS finalized its proposal to pay for telehealth services furnished in a patient’s home at the same rate as an office visit – i.e., paying the non-facility PFS rate. The non-facility PFS rate is slightly higher than the facility rates in recognition of the expenses incurred to maintain an office, whereas the reimbursement for most professional services performed in a facility is lower because the facility (e.g., hospital) is separately paid for the expense of providing the facilities. CMS uses place of service (POS) codes to determine whether to pay a practitioner using the lower facility (e.g., hospital) or higher non-facility rate.

As finalized in the PFS Final Rule, beginning January 1, 2024:

  • Claims billed with POS 10 (Telehealth Provided in Patient’s Home) will be paid at the non-facility rate.
  • Claims billed with POS 02 (Telehealth Provided Other than in Patient’s Home) will continue to be paid at the PFS facility rate because the facility costs associated with those services will be incurred by and paid to originating sites that were typical prior to the PHE (e.g., physician offices, hospitals).
  • When a clinician is in the hospital and the patient is in the home, a hospital POS code should be used, along with modifier 95.

CMS offered a detailed explanation of its expectations regarding resource costs in the future, including a reminder that in-person visit requirements will apply beginning in 2025 for mental health services furnished via telehealth, which means mental health practitioners will have to maintain offices and incur practice expense costs of a hybrid model.

Bridging the Gap: Intensive Outpatient Program Services

The Medicare Part B benefit for OUD treatment services furnished by OTPs during an episode of care was established approximately five years ago under the Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act). CMS first implemented the benefit, including provider enrollment requirements and payment methodology, under the PFS final rule for the 2020 calendar year. Since then, CMS has continued to modify and expand its approach—for example, through the extension of telehealth flexibilities, as described above.

The CAA established Medicare coverage for intensive outpatient services furnished by an intensive outpatient program (IOP), effective January 1, 2024. In the PFS proposed rule for 2023, CMS solicited comments on intensive outpatient mental health treatment, including SUD treatment, furnished by IOPs. It explored whether existing PFS coding and payment mechanisms adequately account for intensive outpatient services that are part of a continuum of care in treatment – i.e., whether there was a gap in coding under the PFS or other Medicare payment systems that was limiting access to needed levels of care for mental health or SUD treatment. However, instead of making changes in the PFS Final Rule, CMS points to the Hospital Outpatient Prospective Payment System final rule for calendar year 2024 (OPPS Final Rule) for details regarding Medicare payment for IOP services provided by OTPs.

The OPPS Final Rule, which aims to improve health outcomes by filling “longstanding gaps in behavioral health treatment,” establishes payment and program requirements for IOP services provided to individuals with acute behavioral health needs, as mandated by the CAA. CMS finalized its proposed definition of “intensive outpatient services,” incorporating a requirement that the services be furnished in accordance with a physician certification and plan of care and adding a clarifying note that IOP services are not required to be provided in lieu of inpatient hospitalization (in contrast to partial hospitalization program services). The IOP services requirements will apply across various settings – hospital outpatient departments, community mental health centers, federally qualified health centers, and rural health clinics – effective January 1, 2024. IOP services will be available both for individuals with acute mental illness and individuals with SUDs.

In addition, recognizing that IOPs can be housed in OTPs, CMS extended coverage for intensive outpatient services in OTPs for the treatment of OUD, even though this was not specifically mandated or addressed by the CAA. The agency set out detailed requirements for its newly defined category of OUD treatment services called “OTP intensive outpatient services.” For example, a physician or non-physician practitioner must certify that the individual has a need for certain services (e.g., individual and group therapy services as specified by regulation) for a minimum of nine hours per week and requires a higher level of care intensity compared to existing OTP services. CMS indicated in the OPPS Final Rule that it plans to monitor the utilization of IOP services in various settings to inform refinements in the future and noted in the PFS Final Rule that it continues to monitor the utilization of OUD treatment services furnished by OTPs to ensure that Medicare beneficiaries have appropriate access to care.

Other Behavioral Health Changes

In addition to the changes outlined above, the CY 2024 PFS includes the following updates:

  • Valuation of Timed Psychotherapy Services. Citing the emerging need for access to behavioral healthcare and continuing difficulties in behavioral health workforce capacity, CMS finalized a reimbursement increase for timed behavioral health services under the PFS by way of a relative value unit (RVU) adjustment. Specifically, the PFS Final Rule increases the work RVUs for standalone psychotherapy services by applying a 19.1% upward adjustment. The reimbursement adjustment also applies to psychotherapy codes billed as an add-on to an E/M visit and codes describing HBAI services. The increases in work RVUs will be implemented over a four-year transition period. CMS indicated it believes the changes will begin to address distortions that have occurred over time in valuing time-based behavioral health services.
  • Payment Rates for the PFS SUD Bundle. CMS finalized an increase in payment rates for the PFS SUD bundle to more accurately reflect the cost, time, and effort of delivering office-based SUD services. Intending to incentivize more office-based practices to offer these services, CMS made this change in response to public comments after increases CMS made to the OTP bundled payments for CY 2023. The agency noted it was persuaded by commenters requesting consistent pricing for office-based services, acknowledging that patients receiving buprenorphine in non-OTP settings may have similarly complex care needs as those receiving services through OTPs.
  • Caregiver Training Services. CMS finalized its proposal for Medicare reimbursement when physicians or certain non-physician practitioners (including clinical psychologists) train caregivers to support patients with certain diseases or illnesses in carrying out a treatment plan. The caregiver training services (CTS) must be congruent with the treatment plan and designed to effectuate desired patient outcomes. Further, patient consent is required for a caregiver to receive CTS. The PFS Final Rule and the proposed rule for CY 2024 provide non-exhaustive examples of physical and behavioral clinical scenarios under which CTS might be appropriate, including when patients with dementia, autism spectrum disorder, or individuals with other intellectual or cognitive disabilities may require assistance with challenging behaviors to carry out a treatment plan.
  • Hospice Interdisciplinary Groups. In an effort to provide hospices with greater flexibility to meet the mental health needs of patients and families, the PFS Final Rule adds an MFT and MHC to the individuals who can comprise the hospice interdisciplinary group (IDG). As a result, the hospice IDG will be required to include at least one social worker (SW), MFT or MHC. The PFS Final Rule also modified the hospice personnel qualifications to include MFT and MHC qualifications. CMS stated it believes it is important for the hospice IDG to consider patient needs when selecting a SW, MFT, or MHC. However, CMS declined to finalize its proposal that the selection of a SW, MFT, or MHC as a member of the IDG be “based on the needs and preferences of the patient,” acknowledging that it may be administratively impractical to change team members based on the needs of one patient. Instead, it stressed that hospices may have non-IDG staff who provide patient care attend IDG meetings. CMS indicated that additional information regarding the implementation of these changes will be provided in future interpretive guidance.

CMS indicated that it welcomes feedback regarding ways the agency can further expand access to behavioral services, so we won’t be surprised to see additional changes in the years to come.

Please contact the authors if you have any questions about the changes in the PFS Final Rule related to the behavioral health sector.