The landscape of mental health billing has undergone a seismic shift in recent years. What was once a relatively straightforward process centered on face-to-face session billing has evolved into a complex matrix of codes, modifiers, and regulations distinguishing telehealth billing from traditional in-person therapy billing. For therapists, psychologists, counselors, and practice administrators, mastering these differences isn’t just about administrative accuracy—it’s about ensuring financial stability, maintaining compliance, and maximizing accessibility for clients in a hybrid care model.

At EzMedPro, we understand that therapist billing in today’s environment requires more than basic coding knowledge. It demands a nuanced understanding of insurance reimbursement rules, payer-specific guidelines, and the critical technical distinctions that determine whether a claim is paid promptly or denied. This comprehensive guide provides the definitive resource for navigating mental health billing for both virtual session billing and remote therapy billing, ensuring your practice can thrive regardless of how services are delivered.

The Fundamental Shift: Why Billing Differences Matter?

The COVID-19 pandemic accelerated the adoption of teletherapy billing, but even as public health emergencies wane, telehealth remains a permanent fixture in behavioral healthcare. This permanence is backed by parity laws in many states that require insurers to reimburse telehealth CPT codes at the same rate as in-person therapy billing. However, parity in payment doesn’t mean parity in process. The billing requirements diverge significantly in three key areas:

• Place of Service (POS) Codes: The foundational identifier that tells the payer where the service occurred.
• Modifier Codes: The crucial appendages that specify how the service was delivered (e.g., via telehealth).
• Documentation & Compliance: The added layers of consent, technology description, and location verification required for telemedicine reimbursement.

Misunderstanding these elements is the primary cause of reducing claim denials and delayed payments, directly impacting a practice’s improve cash flow. This guide will dissect each component, providing a clear roadmap for accurate behavioral health billing.

The Core Components – POS Codes and Modifiers Decoded

The most critical technical distinction in mental health billing lies in the correct use of Place of Service codes and telehealth modifiers. Getting this combination wrong guarantees a claim rejection.

Place of Service (POS) Codes: Where Service Happens

The POS code is a two-digit number on the claim form that indicates the physical setting of the patient during the service.

• For In-Person Sessions: This is straightforward.
  • POS 11 – Office: Used when the service is provided in the therapist’s office or a professional office setting. This is the most common code for traditional face-to-face session billing.
  • POS 12 – Home: Used when the therapist provides services in the patient’s home (relevant for certain in-home therapy models).
  • POS 03 – School: For school-based services.
  • POS 32 – Nursing Facility: For services provided in a skilled nursing facility.
• For Telehealth Sessions: This is where confusion arises. The correct POS code depends entirely on payer-specific guidelines.
  • The Medicare Rule (and many follow): For telehealth, you use the POS code that would have applied if the service were furnished in-person. For a patient at home receiving telehealth, you would use POS 12 – Home. For a patient at an office connecting remotely, it would be POS 11.
  • The Other Common Rule: Some commercial payers, particularly since the pandemic, have adopted POS 02 – Telehealth. This code specifically indicates the service was provided via telehealth and the patient was not in a healthcare facility.
  • Critical Action: You must verify each major payer’s preference. Using POS 02 when a payer expects POS 11/12 will cause a denial.

Telehealth Modifier Codes: How Service Was Delivered

Modifiers provide additional information about a service. For telehealth, they are often used in conjunction with the POS code to explicitly signal the modality.

• Modifier 95 – Synchronous Telehealth Service: This is the most widely accepted modifier for live, interactive audio-video telehealth billing. It is used with the appropriate psychotherapy CPT codes (90832, 90834, 90837, etc.).
• Modifier 02 – Telehealth (GT is its archaic predecessor): Historically, GT was used. Modifier 02 is now its successor in many systems. Some payers want this instead of, or in addition to, modifier 95. Again, check payer-specific guidelines.
• Modifier 93 – Synchronous Telemedicine (Telephone/Internet): This is for real-time telephone or other real-time interactive audio-only telecommunications systems. This is crucial for billing phone sessions where parity laws or payer rules allow it.
• Modifier FQ & Modifier GQ: These are specific to asynchronous telehealth (store-and-forward) and federal telemedicine demonstration programs, respectively, and are less common in standard psychotherapy.

The Golden Rule: For a standard video therapy session billed to a commercial payer, the most common and safe combination is: CPT Code 90837 + POS 02 (or payer-preferred POS) + Modifier 95.

CPT Codes – The Universal Language of Services

The procedure codes themselves are the constant in the equation. The same therapeutic interventions are billed using the same CPT codes for therapy, regardless of modality. The difference is in the accompanying POS and modifier.

Common Psychotherapy CPT Codes (Applicable to Both Modalities)

• 90832: Psychotherapy, 30 minutes
• 90834: Psychotherapy, 45 minutes
• 90837: Psychotherapy, 60 minutes
• 90846: Family psychotherapy (without the patient present), 50 minutes
• 90847: Family psychotherapy (with the patient present), 50 minutes
• 90853: Group psychotherapy

Key Point: There are no unique telehealth CPT codes. You use the standard psychotherapy code that matches the time and service provided. A 60-minute individual therapy session is 90837, whether in your office or over a secure video platform.

Payer-Specific Rules – The Moving Target

This is the most challenging aspect of mental health billing. Each insurance company has its own policy manual.

• Medicare Telehealth Rules: Medicare has specific, well-defined rules. They cover eligible providers, eligible services (90832, 90834, 90837, etc.), and originating site requirements (the patient’s location). Post-PHE, many restrictions have been lifted, but rules are updated frequently.
• Medicaid Telehealth Billing: This is state-specific. Parity laws vary dramatically. Some states have broad telehealth coverage, while others have limitations on provider type, modality (allowing video but not audio-only), or frequency.
• Commercial Payers (Blue Cross, Aetna, United, etc.): Each has published telehealth policies. You must check for:
  • Covered services.
  • Required POS code and modifier combinations.
  • Any pre-authorization requirements specific to telehealth.
  • Licensing & cross-state billing policies if you see patients across state lines.

Actionable Strategy: Create a payer matrix for your practice. For each major insurer you work with, document their preferred POS code, required modifier, and any unique rules for telemedicine reimbursement. Update this matrix quarterly.

Documentation & Compliance – Protecting Your Practice

Accurate mental health billing is inseparable from defensible documentation. Telehealth adds unique layers.

For All Sessions (In-Person & Telehealth):

• Start/stop times and total duration.
• Modality of service (clearly stated).
• Treatment plan relevance, interventions used, and patient response.
• Progress toward goals.

Additional Requirements for Telehealth Sessions:

• Informed Consent: Documentation that verbal or written consent for telehealth was obtained, including risks/benefits (e.g., technical failures, privacy limitations).
• Patient Location: Note the patient’s physical address (city/state at minimum) at the time of service. This is critical for compliance and for determining correct POS codes.
• Provider Location: Your own location.
• Technology: A brief note on the platform used (e.g., “Secure HIPAA-compliant video conferencing platform”).
• Confirmation of Audio/Video: A statement that the visual and audio quality was sufficient for the service provided.
• HIPAA Compliance for Telehealth: You must use a HIPAA-compliant, secure video platform with a Business Associate Agreement (BAA). Using consumer-grade apps without a BAA poses a significant compliance risk.

The Financial Comparison – Reimbursement Rates and Cash Flow

A central question for every practice is: “Do I get paid the same?”

• Parity Laws: Over 40 states have enacted telehealth parity laws that mandate private insurers reimburse covered telehealth services at the same rate as in-person services. This means your reimbursement rates comparison should show no difference for the allowed amount.
• The Reality: While the allowed amount may be the same, other factors affect improve cash flow:
  • Fewer No-Shows/Late Cancellations: Telehealth often reduces last-minute cancellations, creating more stable revenue.
  • Reduced Overhead: No cost for physical office space, utilities, or front-desk staff for telehealth-only practices.
  • Faster Payment Potential? Electronic claims for telehealth are processed identically to in-person. Speed is determined by billing accuracy, not modality.
• The Verdict: Financially, with accurate billing, reimbursements should be equivalent per session. The business case for telehealth is built on geographic reach, reduced overhead, and higher session consistency.

Navigating Special Challenges

Cross-State Licensing & Billing

This is a top challenge for teletherapy billing. You must be licensed in the state where the patient is physically located at the time of service. Billing software for telehealth must be configured to handle different payer rules by state. The insurance company must be willing to pay for an out-of-state provider, which often requires being credentialed on that state’s plan.

Credentialing for Telehealth

Most payers require you to be fully credentialed with them, regardless of modality. Some, during the PHE, allowed provisional credentials or cross-state credentialing waivers. These are largely expiring. Standard credentialing for telehealth with each payer in each state you practice is now the rule.

Patient Eligibility Verification

Always verify benefits specifically for telehealth before the first session. Ask: “Does the patient’s plan cover telehealth behavioral health services? Are there any modality restrictions (video-only)? What is the cost-share?”

Implementing a Flawless Billing System

To streamline therapy billing in a hybrid model, your systems must be robust.

• Use Integrated Practice Management/Billing Software: Choose a platform built for mental health practice management that allows you to easily toggle between POS codes and add modifiers based on appointment type.
• Automate What You Can: Set up appointment types in your EHR (e.g., “Telehealth Intake,” “In-Person 45-min Session”) that auto-populate the correct CPT code, POS code, and modifier.
• Train Your Team: Everyone, from the clinician writing the note to the biller submitting the claim, must understand the differences. This is foundational to revenue cycle management for therapists.
• Conduct Regular Audits: Perform quarterly audits of denied claims. Sort by denial reason and by modality (telehealth vs. in-person) to identify patterns and correct systemic errors. This is key to maximize insurance reimbursements.

Frequently Asked Questions
Mental Health Billing

Do I use different CPT codes for telehealth vs. in-person therapy sessions?

No. You use the same CPT codes for therapy (e.g., 90837 for 60-minute individual therapy) regardless of whether the session is in-person or via telehealth. The difference is communicated through the Place of Service (POS) codes and modifier codes (like 95) that you append to the CPT code on the claim form. This is the most fundamental rule in mental health billing.

What is the correct Place of Service code for a telehealth session?

This depends on your patient’s insurance. There are two primary schools of thought:

• POS 02 – Telehealth: This is increasingly common and explicitly indicates a telehealth service.
• The Patient’s Location POS (e.g., 11, 12): Following traditional Medicare telehealth rules, you use the POS code for where the patient is physically located (e.g., POS 12 for Home, POS 11 if they are at their workplace).
  You must check each payer’s policy. Using the wrong POS code is a major reason for reducing claim denials. When in doubt for a commercial payer, POS 02 with modifier 95 is a strong starting point.

Will insurance pay the same rate for a telehealth session as an in-person one?

In most cases, yes, due to state parity laws. These laws require insurers to reimburse covered telehealth services at the same rate as in-person services. However, you must verify the patient’s specific plan covers telehealth, as there can still be limitations (e.g., only covering telehealth for certain diagnoses or restricting audio-only visits). Your reimbursement rates comparison should show parity if you are billing correctly and the service is covered.

What are the key documentation differences for telehealth sessions?

Beyond standard psychotherapy notes, for telehealth billing, your documentation should specifically include:

• Confirmation that verbal/written consent for telehealth was obtained.
• The patient’s location (city, state) at the time of the session.
• Your location.
• A note that the session was conducted via secure, HIPAA-compliant telehealth video/audio platform.
• A statement that the video and audio quality were sufficient for the service provided. This extra layer protects you during audits and ensure[s] accurate coding compliance.

Can I see a patient via telehealth who is in a different state?

You can only provide telehealth to a patient in a state where you are actively licensed. Licensing & cross-state billing is the major hurdle. Furthermore, you must be credentialed with the patient’s insurance plan for that state. Some interstate compacts (like the Psychology Interjurisdictional Compact, PSYPACT) facilitate this for psychologists, but most licenses are state-specific. Always verify licensing and payer credentialing for telehealth requirements before providing cross-state care.

Expert Insight

The dichotomy between telehealth billing and in-person therapy billing is now a permanent feature of the behavioral health billing landscape. Success no longer lies in choosing one over the other, but in developing the expertise to navigate both with equal precision. The practices that thrive will be those that view these billing complexities not as an administrative burden, but as a strategic component of their clinical service delivery.

Mastering mental health billing in this context means building systems that are flexible, informed, and meticulous. It requires a commitment to ongoing education as payer-specific guidelines evolve, and a proactive approach to ensure accurate coding on every single claim. The financial health of your practice—its ability to improve cash flow and simplify multi-state practice billing—depends directly on this mastery.

At EzMedPro, we specialize in transforming this complexity into clarity. By providing the tools, knowledge, and support tailored to the unique needs of therapist billing and psychologist billing, we empower your practice to focus on what matters most: delivering exceptional care, whether across the desk or across the miles.

Trusted Industry Leader

Navigating the complexities of mental health billing for a hybrid practice is time-consuming and fraught with risk. One coding error can lead to denied claims, delayed revenue, and compliance headaches.

Let EzMedPro be your expert guide. Our billing solutions and practice management tools are specifically designed for the nuances of therapist billing and behavioral health billing, ensuring you capture every dollar you’ve earned—for both telehealth and in-person sessions.

Schedule a Free Billing Practice Audit Today

In 30 minutes, we’ll:

• Analyze a sample of your recent claims for both telehealth and in-person sessions.
• Identify any patterns of errors in POS codes, modifiers, or documentation.
• Provide a clear assessment of your revenue cycle health.
• Show you how our specialized system can streamline therapy billing and maximize insurance reimbursements.

Take the first step toward billing confidence and financial peace of mind. Contact EzMedPro now for your free, no-obligation audit.