Medicare audits of behavioral health claims turn on two questions: does the billed time match the code, and does the billed format, individual or group, match what the record actually shows. A psychiatrist, psychologist, or licensed clinical social worker who bills CPT 90837 for a session the note supports only at the CPT 90834 level, or bills individual psychotherapy for what the chart describes as a group check-in, is handing a Medicare contractor two straightforward findings. Those findings rarely stay small. A pattern drawn from a handful of sampled claims can become the basis for extrapolation across the full audit period, and the resulting recoupment demand can reach six figures before an appeal is ever filed.
Time-Based Coding and What Documentation Must Show
The psychotherapy codes billed most often to Medicare are time-banded: 90832 covers 16 to 37 minutes of face-to-face psychotherapy, 90834 covers 38 to 52 minutes, and 90837 covers 53 minutes or more. There is no rounding between bands and no credit for scheduling, charting, or hallway time. Medicare Administrative Contractors, through their published local coverage determination and coding articles, expect the note to state a start and stop time or a total face-to-face minute count, the specific therapeutic intervention used, and the patient's response to it. CMS's own billing and coding guidance for psychiatry and psychology services sets that standard, and it is the single most common documentation gap contractors cite when a psychotherapy claim is pulled for review; missing or absent time documentation was flagged repeatedly in the HHS Office of Inspector General's May 2023 review of Medicare psychotherapy payments.
Individual Versus Group Therapy Findings
Group psychotherapy billed under CPT 90853 carries its own documentation burden, separate from the time-band rules that govern individual sessions. Each participant's chart needs its own note describing that patient's specific participation and response, not a copied summary of what the group discussed. The patient's treatment plan has to call for group therapy as a service directed at a stated goal, and the facilitator's name and license have to appear in the record. When a Medicare contractor samples a behavioral health practice's 90853 claims and finds templated notes, a treatment plan silent on group participation, or no documented facilitator credential, the finding is usually framed as lack of medical necessity rather than a coding error, which narrows the practice's options on appeal.
How Documentation Gaps Become Extrapolated Recoupment Demands
Medicare Administrative Contractors, Supplemental Medical Review Contractors, and Recovery Audit Contractors typically start a behavioral health review with a small sample of claims. When the sample shows a pattern, such as sessions billed at the 90837 level without supporting time documentation, the contractor applies statistical extrapolation to project the sample's error rate across every claim in the audit period. The OIG's own review of Part B psychotherapy payments during the first year of the COVID-19 public health emergency estimated $580 million in improper payments out of roughly $1 billion paid for psychotherapy services, with $232 million of that tied to non-telehealth sessions where documentation, not the service itself, was the problem. A practice that receives an additional documentation request on behavioral health claims should treat the response as the point where the extrapolated exposure gets set, not as a formality.
A documented start and stop time, or a stated total face-to-face minute count, is often the only thing standing between a psychotherapy claim and a Medicare audit finding.
Why Early Legal Counsel Is Critical
It is critical that behavioral health providers promptly retain experienced healthcare defense counsel upon receiving a Medicare additional documentation request or audit notice. Early legal intervention can protect the provider's rights, ensure appropriate responses to the contractor's requests, avoid inadvertent admissions, preserve relevant defenses, and allow counsel to communicate with the auditor on the provider's behalf. Delaying legal representation can significantly affect the outcome of the audit and expose the provider to unnecessary risk.
How Health Law Alliance Can Help
Health Law Alliance defends physicians, psychologists, and behavioral health practices against Medicare audits built on time-based coding and group therapy documentation findings. Our attorneys have overseen 2,000+ Audits, and our bench includes a former federal prosecutor and a former senior executive at a major pharmacy benefit manager, background that shapes how a documentation-based finding gets tested before it becomes an extrapolated demand. If your practice has received a Medicare audit notice or documentation request on behavioral health claims, contact us for a free, confidential consultation.
