Starting January 1, 2023, Medicare will expand and increase coverage of certain services and providers to advance access to prevention and treatment services for substance use disorders (SUD) and mental health services. These changes, implemented in the 2023 Physician fee schedule final rule (Final Rule) published last week, further the goals of the Centers of Medicare and Medicaid Services (CMS) in its 2022 Behavioral Health Strategy, as follows:

• Introduced flexibility in supervision requirements to allow behavioral health clinicians of various types to bill more readily for their services;

• Under the Psychiatric Collaborative Care Model, a clinical psychologist or clinical social worker can serve as the focal point of care integration rather than a physician as previously required;

• Changed methodology for methadone treatment reimbursement; and

• New billing code to allow for longer sessions of psychotherapy given the increased need for behavioral health services in connection with SUD treatment.

The combination of the opioid crisis and the COVID-19 pandemic have led to record need for behavioral health treatment. As previously discussed, Medicare does not cover a full range of services, providers, and settings for behavioral health treatment. In an attempt to meet its goals of improving access and quality of mental health services, the Final Rule includes a number of changes that modernize and expand Medicare coverage.

Behavioral Health Treating Provider Flexibilities

CMS updated regulations to provide more flexibility regarding the types of practitioners that may provide behavioral health care services, which will address significant behavioral health staffing shortages, particularly in rural areas. CMS acknowledged that there are no direct billing codes to reimburse many types of behavioral health specialists such as Licensed Professional Counselors (LPCs) and Marriage and Family Therapists (MFTs). CMS noted it did not have the authority to create new statutory categories for reimbursable practitioner types. Instead, they amended the direct supervision requirement for these types of providers such that their services can be billed “incident to” a physician’s services, but without the need for continuous, physical supervision of a physician. Additionally, CMS established a new code to encourage the integration of mental health services. Under the Psychiatric Collaborative Care Model, a clinical psychologist or clinical social worker can serve as the focal point of care integration rather than a physician, as previously required.

Reimbursement Enhancements for Methadone and Opioid Treatment Programs

In the Final Rule, CMS also updates various billing codes related to behavioral health and SUD treatment. First, CMS updated the methodology to determine the reimbursement rate for methadone (a frequently prescribed drug for serious opioid use dependence). CMS was reluctant to rely on the voluntary reporting of average sales price data for methadone because it would result in a lower reimbursement for the upcoming year. Concerned that this would limit availability of methadone at a time when opioid drug overdoses continue to soar, CMS adopted the payment rate from 2021, with an annual update for inflation. CMS also updated the rate for individual therapy provided in an Opioid Treatment Program (OTP), commonly referred to as a methadone clinic, to allow for longer sessions at 45 minutes. Commentary to the Final Rule recognizes that patients diagnosed with Opioid Use Disorder and receiving services in an OTP generally require and benefit from a psychotherapy session longer than the average patient (which has historically been covered for a 30 minute psychotherapy session). CMS noted that studies have found that the average length of a therapy session during the initial months of treatment in an OTP is 50 minutes. Accordingly, the change to reimbursement for 45 minute therapy sessions in an OTP is particularly important because it allows Medicare to reimburse providers for an amount of time that better approximates actual time spent.

Second, while CMS solicited comments on whether there is a gap in coding for intensive outpatient (IOP) services, the Final Rule did not include any changes in this area. Though CMS acknowledged the receipt of several comments advocating for the benefits of IOP, particularly for SUD treatment, CMS said it would consider these comments in future rulemaking.

On balance, it is expected that these changes implemented by the Final Rule will increase access and quality of behavioral health and SUD resources for Medicare beneficiaries across the country and are welcome steps towards alleviating the lack of access to treatment that has been exacerbated by the COVID-19 pandemic and opioid epidemic. Providers and investors in national behavioral health platforms should welcome the additional clinician flexibility and reimbursement enhancements evidenced by the Final Rule.