Medicare for mental health services

Are you a mental health clinician with questions about Medicare for mental health services?

Many therapists (and clients) often ask: “Does Medicare cover psychotherapy?” And if so: “How many therapy sessions does Medicare pay for?”

Clients may also wonder, “Does Medicare cover counseling for depression?” or “Does Medicare cover psychiatry?”

In this comprehensive guide, we’ll address all the essential information about Medicare behavioral health coverage that clinicians and patients need to know.

As of 2024, approximately 61 million Americans are enrolled in Medicare parts A and B. The vast majority (89%) of Medicare beneficiaries are ages 65 and older.

Both clinicians and Medicare beneficiaries accessing Medicare behavioral health services often have numerous questions about coverage and processes.

Does Medicare cover mental health services?  If so, what exactly does it cover—and how can your clients access those services?

As a mental health provider, what do you need to know to effectively provide and bill for mental health services to Medicare beneficiaries?

Let’s explore the most common questions about Medicare for mental health services.

How Medicare for mental health works

In order to understand Medicare behavioral health coverage, it’s crucil to understand how Medicare is structured.

Medicare is broken down into different “parts” that cover different healthcare needs.

Those parts include:

• Medicare Part A (hospital insurance): Covers hospital stays and inpatient care (including hospice care or skilled nursing facility care)
• Medicare Part B (medical insurance): Covers outpatient services like provider visits, home health care, necessary medical equipment, and preventative services (including annual depression screenings)
• Medicare Part C (Medicare Advantage): Medicare-approved plans from private companies
• Medicare Part D: Prescription drug coverage

Americans can enroll in Medicare through two main pathways:

Original Medicare includes both Part A and Part B. Beneficiaries with Original Medicare typically enroll in a Medicare drug program (Part D) to cover prescription costs—and may purchase supplemental coverage (Medigap) to help with out-of-pocket expenses.

Medicare Advantage (Part C) offers an alternative from private companies that typically “bundle” Parts A, B, and D together. These plans may provide additional benefits beyond Original Medicare but may have different costs or restrictions.

Does Medicare cover mental health services?

Now that you understand how Medicare for mental health works, let’s address the primary question: does Medicare provide mental health coverage?

The answer is yes—Medicare does cover mental health services.

However, “mental health” encompasses many different services, so let’s clarify what Medicare behavioral health  benefits actually include.

Does Medicare cover psychotherapy? Does Medicare cover counseling for depression? Does Medicare cover psychiatry? And, what about medications?

“Medicare covers a wide range of outpatient mental health care,” explains Louise Norris, health policy analyst for medicareresources.org. “This includes individual and group therapy sessions with licensed psychiatrists, psychologists, and other eligible professionals”—all covered under Medicare Part B.

Medicare for mental health also provides coverage for inpatient treatment when necessary.

“If the mental health disorder requires hospitalization, Part A will cover inpatient services, up to limits, for providers who accept Medicare,” says Michael Orefice, SVP of Operations at insurance comparison website SmartFinancial.

Under Part B, there’s also coverage for intensive treatment options that don’t require hospitalization.

“For people who don’t need inpatient mental health treatment—but whose treatment needs are more extensive than regular outpatient therapy—Medicare will cover partial hospitalization and intensive outpatient program services,” Norris says.

Finally, Medicare for mental health covers medications needed to manage mental health conditions, provided they’re prescribed and medically necessary.

“Medicare Part D covers medications prescribed by a psychiatrist or clinical nurse,” notes Orefice.

It’s important to understand that Medicare doesn’t cover all mental health treatments without conditions.

For outpatient services to be covered, patients must see providers who accept Medicare (meaning they accept Medicare’s approved amount as full payment for covered services).

For inpatient care, treatment must be received at Medicare-certified facilities.

How much does Medicare cover for mental health?

Another common question about  Medicare behavioral health coverage concerns coverage limits and out-of-pocket costs.

For inpatient care, coverage limits depend on the facility type.

“Original Medicare coverage of inpatient care in a psychiatric hospital is limited to 190 days over a person’s lifetime,” says Norris.

However, “if inpatient mental health care is provided in a general hospital, Medicare Part A regular rules apply,” Norris adds. “This means there are no limits on the number of benefit periods [which start when you enter the inpatient care facility and end 60 days after you last receive care] that can be covered.”

If hospitalization exceeds 90 days in a single benefit period, patients will need to use lifetime reserve days—with a lifetime total of 60 days available.

For outpatient services, “there are no specific limits on how much medically necessary outpatient mental health therapy can be covered,” says Norris.

So, how many therapy sessions does Medicare pay for? There’s no pre-set limit for medically necessary care.

However, treatment isn’t free. Beneficiaries remain responsible for deductibles and copays—though “out-of-pocket costs can be paid by supplemental coverage, including an employer’s plan, Medicaid, or a Medigap plan,” Norris says.

Who can bill Medicare for mental health services?

In order to bill Medicare for mental health services, health care providers need to fall into one of two categories:

• Participating providers, which means they agree to accept the Medicare-approved amount as full payment for a covered service
• “Non-participating providers,” who may choose to accept the Medicare-approved amount as full payment for a covered service on a case-by-case basis or may charge up to 15% more (which increases out-of-pocket costs for the patient)

“A wide range of medical professionals can be contracted with Medicare to provide mental health services,” says Norris. “The list includes psychiatrists or other doctors, clinical psychologists, clinical social workers, clinical nurse specialists, nurse practitioners, physician assistants, marriage and family therapists, and mental health counselors.”

Providers who opt out of the Medicare program can not bill Medicare to be reimbursed for mental health services (except in emergencies).

How to find Medicare behavioral health providers 

To access Medicare for mental health benefits, patients must see Medicare-contracted practitioners. But how can they find these providers?

For Original Medicare, “you can visit Medicare.gov or ask your primary care physician for a referral,” recommends Orefice.

Since Medicare Advantage plans are administered by private companies, patients should look for in-network providers “on your Medicare Advantage insurance company’s website or by asking your primary care provider for a referral,” Orefice suggests.

Does location matter for Medicare coverage?

With Original Medicare, location within the United States doesn’t affect service access.

“Original Medicare is federally funded and has the same requirements in every state,” explains Orefice.

“Original Medicare’s benefits, costs, and coverage rules are the same nationwide,” Norris confirms.

Medicare Advantage (Part C) plans, however, vary by location.

“Medicare Advantage plans have benefits and coverage rules that vary by plan, and different plans are available in different areas,” says Norris. “So if you’re enrolled in a Medicare Advantage plan, you need to be aware of your plan’s specific benefits and coverage rules.”

“Private Medicare, Part C, which has specific and limited coverage areas, works much like any work-sponsored health plan, except it must meet certain federal standards of care,” adds Orefice.

Sources

1. Data.CMS.gov Centers for Medicare & Medicaid Services. Medicare Monthly Enrollment.
2. KFF.org. Medicare Advantage in 2024: Enrollment Update and Key Trends
3. Medicare.gov. Parts of Medicare.
4. Medicareresources.org. What are lifetime reserve days?
5. Medicare.gov. Does your provider accept Medicare as full payment?
6. Medicare Interactive. Participating, non-participating, and opt-out providers.

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