The High Cost of Getting Psychotherapy Coding Wrong

Behavioral and mental health is a central aspect of an individual’s overall health. 

More and more medical providers are providing services like psychotherapy, often referred to as ‘talk therapy’ as part of mental health care.  

However, the codes used to report psychotherapy are regularly scrutinized and enforcement does take place when these services are not documented appropriately or are not provided in compliance with regulations. 

Psychotherapy 

According to the CPT^® Manual, “Psychotherapy is the treatment of mental illness and behavioral disturbances in which the physician or other qualified health care professional, through definitive therapeutic communication, attempts to alleviate the emotional disturbances, reverse or change maladaptive patterns of behavior, and encourage personality growth and development.” 

This is a mainstay and fundamental part of the delivery of psychological care. Though there are multiple codes concerning psychotherapy, some of the most common are the time-based psychotherapy codes 90832 (Psychotherapy, 30 minutes with patient), 90834 (Psychotherapy, 45 minutes with patient), and 90837 (Psychotherapy, 60 minutes with patient). 

Since these are time-based codes, clearly documenting the time is essential for accurate and compliant coding and billing. Coding guidelines instruct providers to choose the code closest to the actual time (i.e., 16-37 minutes for 90832, 38-52 minutes for 90834, and 53 or more minutes for 90837). Psychotherapy of less than 16 minutes duration should not be reported. 

Getting the time requirement correct really matters. Earlier in 2025, there was a $386,000 settlement announced by the U.S. Department of Justice with a medical provider practicing in 17 states. The company was performing telehealth psychotherapy. For the dates of service in question, telehealth psychotherapy was allowed, but the settlement focused on allegations that the billing providers were not meeting the minimum time requirements for the psychotherapy codes they were reporting. The government alleged that, between January 1, 2017, and November 30, 2022, the company submitted and caused the submission of claims to Medicare for telehealth psychotherapy sessions that did not meet the minimum time requirements for payments and relied on false time records in support of these same telehealth services. The allegations arose from a whistleblower suit filed in federal court in Kentucky. 

In a different case in Rhode Island, a clinical social worker was sentenced to three years of supervised release (including three months of home detention) after pleading guilty to a charge of conspiracy to commit health care fraud. 

The social worker routinely submitted false and fraudulent claims for psychotherapy and counseling services that did not occur for the length of time billed, consistently billing for far more patients than was possible to have seen during office hours. She was known as the “Five Minute Queen” for her speed in seeing patients for so-called counseling sessions, billed for 45-minute sessions when she actually saw patients for no more than 5-10 minutes, at times asking patients only one question before she ended a session. 

To compound the issue, she directed counselors and others to record in their notes that they were providing counseling in 45-minute intervals, but without listing AM or PM for the start time. She gave this instruction, so it would be not clear in the documentation that they were seeing more patients than possible within a single hour. She also instructed other counselors to copy and paste the last visit’s note into each entry to make the bill look complete. As a result, many of the patient notes for patients billed were simply identical cut-and paste copies of the same note. 

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