Medicaid program integrity units are downcoding and recouping payment on psychotherapy claims billed under time-based CPT codes when the clinical note does not document the face-to-face time the claim requires. CPT codes 90832, 90834 and 90837 are time-based: each code is tied to a specific band of minutes, and the band, not the length of the appointment on the calendar, decides which code the claim can support. A documentation gap this specific drives a recurring category of Medicaid audit defense work. A Texas Health and Human Services Office of Inspector General audit of a Medicaid behavioral health provider found the same gap across dozens of sampled claims, and the finding did not stay confined to those claims. It extrapolated across the provider's full claim population.
The Time Bands Behind 90832, 90834 and 90837
The American Medical Association's CPT guidelines, reflected in Medicare's own billing and coding guidance for psychotherapy services, time-band each individual psychotherapy code. CPT 90832 describes psychotherapy, 30 minutes with the patient, and supports a session of 16 to 37 minutes of face-to-face time. The next band up, CPT 90834, describes psychotherapy, 45 minutes with the patient, for sessions of 38 to 52 minutes. At the top, CPT 90837 describes psychotherapy, 60 minutes with the patient, and requires 53 minutes or more. A session timed at 52 minutes of face-to-face time supports 90834. One minute later, at 53 minutes, the same session supports 90837. The same banded structure carries over to the add-on psychotherapy codes, 90833, 90836 and 90838, billed alongside a separate evaluation and management visit rather than standing alone.
What Medicaid Reviewers Expect in the Note
Because the codes are defined by minutes rather than by the service performed, a reviewer's first question is what the clock shows. A note that repeats the scheduled appointment length instead of the actual time spent, or that records one combined total when two separate services were billed together, does not establish which time band the claim can support. The record needs start and stop times, or a face-to-face total, that excludes charting, scheduling and any time already attributed to a same-day evaluation and management visit. When an add-on psychotherapy code is billed with an evaluation and management visit, the two services must be documented separately, and time spent on one cannot support the other.
A note that records one combined total for an evaluation and management visit and an add-on psychotherapy service does not support either code billed on its own.
A Texas Medicaid Audit Shows the Downcode in Practice
The Texas Health and Human Services Office of Inspector General's August 18, 2023 audit of a Texas Medicaid behavioral health provider, covering teleservices claims from June 1, 2021 through December 31, 2021, found that the provider failed to separately identify evaluation and management time and add-on psychotherapy time in 57 of 60 sampled claims. Separately, in six of the 60 sampled claims, the total time recorded fell under the 16-minute minimum for the add-on psychotherapy code billed. The audit cited 22 Tex. Admin. Code § 165.1(a)(9), a rule since repealed and reorganized into a new medical-records chapter, which at the time required that the CPT codes reported on a Medicaid claim be supported by the medical record. Using the sample's combined error rate, which included both the time-documentation finding and a separate finding on provider enrollment, the auditors calculated an extrapolated overpayment of $54,087.35 against claims that had been paid $381,573 during the audit period. The dollar exposure traced back to time documentation that did not separately support each billed service, not to any dispute that therapy had occurred. A finding like this one first arrives as a recoupment demand in a draft audit report, and responding to a draft Medicaid audit report is the point at which a provider can still contest the time calculation before it becomes final.
Health Law Alliance's attorneys have overseen 2,000+ audits and handled 5,000+ matters, with 25+ years of experience.
Why Early Legal Counsel Is Critical
It is critical that healthcare providers promptly retain experienced healthcare defense counsel upon receiving a Medicaid audit notice, a medical records request, or any other program-integrity inquiry involving psychotherapy billing. Early legal intervention can protect the provider's rights, ensure appropriate responses to government requests, avoid inadvertent admissions, preserve relevant defenses, and allow counsel to communicate with investigators on the provider's behalf. A pattern of unsupported time-based claims can also raise False Claims Act exposure when the billing reflects reckless disregard rather than an isolated clerical error. Delaying legal representation can significantly affect the outcome of a matter and expose the provider to unnecessary risk.
How Health Law Alliance Can Help
Health Law Alliance's behavioral health audit defense team represents psychotherapy and behavioral health providers facing Medicaid program-integrity audits, including disputes over time-based coding and extrapolated overpayment demands. Contact us today for a free, confidential consultation.
