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June 2001 Department
of Health and Human Services
Office of Inspector General
 Medicare Part B Payments
for Mental Health Services
Part B claims for mental health services are processed and paid
by Medicare carriers that contract with the Health Care Financing
Administration (HCFA). Section 1862 (a)(1)(A) of the Social
Security Act states that all Medicare Part B services, including
mental health services, must be "reasonable and necessary for
the diagnosis or treatment of an illness or injury or to improve
the functioning of a malformed body member." To date, HCFA
has not established a national medical review policy for all
carriers to follow in assessing the appropriateness of claims for
mental health services. Rather, carriers develop local medical
review policies that describe the medical criteria beneficiaries
must meet for particular mental health services to be considered
medically necessary and appropriate, as well as criteria for
satisfactory documentation of mental health services.
For this inspection, we selected a stratified random sample of
1998 claims for outpatient mental health services. The sample
included claims for individual psychotherapy, group psychotherapy,
psychological testing, and pharmacologic management. We collected
mental health records from Medicare providers in support of
sampled services. An independent medical review contractor
examined the records to make determinations about the medical
necessity and appropriateness of mental health services.
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