POS Codes in Mental Health Billing – State Rules, Telehealth, and Common Mistakes
BLOG OUTLINE
- Introduction
- Why POS Codes Matter in Mental Health Billing
- Most Common POS Codes Used in Mental Health Services
- State Variations in Mental Health POS Codes
- POS Codes and Telehealth in Mental Health Billing
- Common Mistakes in Mental Health POS Coding (and How to Avoid Them)
- How to Prevent POS-Related Claim Denials in Mental Health
- Conclusion
- FAQs
Introduction
In mental health billing, accuracy does not mean choosing the right CPT code but it is also about the POS code submitted with each service claim. POS codes assist the payers in identification of location where mental health service was actually delivered. The code of place of service refers to an office, a school, via telehealth, or a hospital outpatient program. When billing for behavioral health providers, using the wrong POS code leads to claim denials, reduced reimbursement, or compliance issues. Especially when telehealth is involved, the consequence are irreparable. Therefore, the significance of understanding the application of POS codes specifically to therapy, psychiatry, behavioral health programs, and school-based counseling is not optional, it is essential. To get a complete list of all POS codes used in medical billing, check out our All Place of Service Codes and POS 11 in Medical Billing guide. However, this article focuses exclusively on mental health POS codes, their state-specific rules, and the most common mistakes that can cost providers time and revenue.
Why POS Codes Matter in Mental Health Billing
In mental health billing, the Place of Service (POS) code is more than just a location indicator, it directly impacts:
1. Reimbursement Rates
- Some payers reimburse differently based on the POS.
- For example, an in-office therapy session (POS 11) may be paid at a different rate than the same service provided via telehealth (POS 02 or POS 10).
2. Claim Acceptance
- Mismatched POS and CPT codes can trigger automatic denials.
- For instance, billing 90837 (psychotherapy) with POS 11 for a session that was actually conducted via telehealth will likely result in a rejection.
3. Compliance
- Using the wrong POS can be seen as misrepresentation, potentially leading to audits.
- Medicaid and commercial payers often have strict state-specific requirements for mental health POS usage.
4. Workflow Efficiency
- Accurate POS coding reduces the need for rework and claim resubmissions, speeding up cash flow for practices.
📌 Related Reading: Learn how Mental Health CPT Codes and Modifiers in Mental Health Billing work together with POS codes to ensure complete and accurate claims. Correct POS usage is especially critical for telehealth, school-based programs, and partial hospitalization, where payer rules vary significantly by state.
For Insurance Credentialing, Medical Billing Services and other services
Most Common POS Codes Used in Mental Health Services
While the complete list of POS codes covers every medical specialty, mental health billing typically involves a smaller, high-frequency set of codes. These are the ones often used for therapy, counseling, psychiatry and behavioral health services.
| POS Code | Location | When to Use | Example in Mental Health |
|---|---|---|---|
| 11 | Office | Outpatient mental health visits in the provider’s own office or clinic. | Individual therapy session at a private practice. |
| 02 | Telehealth Provided Other Than Patient’s Home | Real-time video or audio-video sessions when the patient is not at home. | Telepsychiatry session with a patient at a community center. |
| 10 | Telehealth Provided in Patient’s Home | Real-time video sessions when the patient is at home. | Online CBT session conducted from patient’s living room. |
| 03 | School | Mental health services provided in a school setting. | School counseling under an IEP plan. |
| 22 | Outpatient Hospital | Services provided in a hospital outpatient department. | Partial hospitalization program for behavioral health. |
| 49 | Independent Clinic | Free-standing clinic not affiliated with a hospital. | Community mental health center therapy session. |
Tip: POS codes must match the CPT codes and modifiers on the claim form whether its a UB-04 claim form or CMS-1500 HCFA claim form. For example, billing CPT 90791 with POS 10 must include the modifier 95 for telehealth to avoid claim denial. For providers working in multiple locations (e.g., telehealth and in-office), maintaining a POS code reference sheet for staff is necessary for accurate and timely reimbursement.
📍 State-specific guidance:
- Texas Mental Health Billing Services – Medicaid rules for POS 02 and POS 10 with telehealth modifiers.
- California Mental Health Billing Services – Medi-Cal requirements for school-based POS usage.
- Florida Mental Health Billing Services – AHCA policies for telehealth and outpatient mental health claims.
State Variations in Mental Health POS Codes
POS codes are standardized location codes used nationwide but state-specific Medicaid and commercial payer rules can change their application in mental health billing. Continue reading below to understand the most common variations.
Texas
In Texas, Medicaid telehealth mental health services require POS 02 or POS 10 with specific modifiers:
- POS 10 – patient at home.
- POS 02 – patient at another site (e.g., school, clinic).
- GT or 95 modifiers often required for behavioral health CPT codes.
📌 Read our Texas Mental Health Billing Services guide for full Medicaid telehealth rules and POS code compliance tips.
California
Medi-Cal requires precise POS coding for school-based mental health services:
- POS 03 – for IEP or state-approved in-school counseling.
- POS 02 + 95 – when telehealth is used in a school setting.
- POS 22 – for outpatient hospital behavioral health services.
📌 Explore California Mental Health Billing Services for a complete Medi-Cal POS code breakdown.
Florida
Florida Medicaid and AHCA rules are strict for telehealth and community mental health centers:
- POS 10 – home-based telehealth.
- POS 02 – non-home telehealth.
- POS 49 – independent mental health clinics.
📌 Learn more in our Florida Mental Health Billing Services resource.
New York
New York Medicaid and commercial payers require:
- POS 02 or POS 10 – with telehealth documentation and modifier 95.
- POS 15 – for mobile unit behavioral health services (common in outreach programs).
Illinois
Illinois Medicaid allows:
- POS 03 – school-based counseling.
- POS 02 – telehealth at non-home locations.
- POS 10 – telehealth from patient’s home.
Special rule: Telephonic-only sessions may need an additional FQ modifier.
Pennsylvania
PA Medicaid notes:
- POS 31 – nursing facility behavioral health services.
- POS 53 – community mental health center day programs.
- POS 02/10 – for telehealth, depending on patient location.
Pro Tip: If you serve clients across multiple states, maintain a state-by-state POS code checklist for quick reference to maintain accuracy
POS Codes and Telehealth in Mental Health Billing
Telehealth has transformed how therapy and psychiatry are delivered, but correct POS code selection is critical for timely reimbursement. In mental health billing, the difference between POS 02 and POS 10 directly impacts clean claim rate.
Differences Between POS 02 vs POS 10 in Therapy and Psychiatry
POS 02 – Telehealth Provided Other Than Patient’s Home
Use when the patient is located at a non-home site during the session.
Example: A client attends a telepsychiatry session from a local clinic or school counseling office.
POS 10 – Telehealth Provided in Patient’s Home
Use when the patient is at home during the telehealth session.
Example: A therapist provides online CBT to a patient in their living room.
📌 More details on correct usage for behavioral health sessions in our Mental Health CPT Codes Guide.
Common Telehealth Modifiers Paired with These POS Codes
In addition to selecting the right POS, most payers require a modifier to indicate the telehealth delivery method:
| Modifier | Use Case | Example |
|---|---|---|
| 95 | Real-time interactive audio and video. | Online EMDR therapy session via Zoom. |
| GT | Older designation for synchronous telehealth (still used by some Medicaid plans). | Telepsychiatry follow-up with Medicaid patient. |
| FQ | Audio-only telehealth. | Counseling session conducted entirely by phone. |
⚠ Always confirm payer-specific rules — some still require GT instead of 95, while others reject claims if both are used.
State-Specific Telehealth Exceptions for Mental Health Services
While POS 02 and POS 10 are standard nationally, some states have unique telehealth billing exceptions for mental health services:
- Texas – Medicaid requires GT or 95 with POS 02/10, and certain therapy CPT codes must have place-of-service match documentation.
- California – Medi-Cal requires modifier 95 for all telehealth, but audio-only therapy must use FQ.
- Florida – AHCA mandates POS 10 for home-based telehealth and rejects POS 02 if the patient is at home.
- New York – Telehealth from mobile units may require POS 15 instead of POS 02/10.
- Illinois – Audio-only therapy allowed with FQ modifier, but telehealth from schools must still use POS 02.
Common Mistakes in Mental Health POS Coding (and How to Avoid Them)
Even experienced billers can make errors with place of service codes, especially in the context of mental health telehealth rules. These mistakes can cause claim denials, delayed payments, or compliance risks.
1. Using POS 02 for Home-Based Telehealth
🚫 The Mistake: Many providers default to POS 02 for all telehealth sessions, even when the patient is at home.
⚠️ The Risk: Payers like Medicare and Florida Medicaid reject claims if POS 02 is used for home telehealth instead of POS 10.
The Fix:
- Use POS 10 when the patient is at home.
- Reserve POS 02 for sessions where the patient is not at home (school, clinic, community site).
📌 Reference: POS Codes and Telehealth in Mental Health Billing
2. Forgetting to Add Required Modifiers
🚫 The Mistake: Submitting the correct POS code but omitting modifiers like 95, GT, or FQ.
⚠️ The Risk: The claim may process as an in-person service — leading to underpayment or rejection.
The Fix:
- Maintain a modifier cheat sheet per payer.
- Add 95 for live video, GT if required by older Medicaid rules, and FQ for audio-only sessions.
📌 More in: Modifiers Used in Mental Health Billing
3. Ignoring State-Specific POS Exceptions
🚫 The Mistake: Applying national POS rules without checking state Medicaid or commercial payer variations.
⚠️ The Risk: Each state may have unique codes (e.g., NY uses POS 15 for mobile units).
The Fix:
- Create state-specific billing SOPs.
- Use our State-by-State Mental Health Billing Services pages for quick reference.
4. Mixing Facility and Non-Facility POS Codes
🚫 The Mistake: Using office POS (11) for sessions that occur in a hospital outpatient setting (22).
⚠️ The Risk: Payers can reprice claims at a lower rate or trigger audits.
The Fix:
- Match the POS to the physical or virtual location of the patient during the encounter.
5. Not Updating POS Codes After Telehealth Policy Changes
🚫 The Mistake: Continuing to use temporary COVID-era codes and rules after payers have reverted to pre-pandemic guidelines.
⚠️ The Risk: Claims denied for using expired policies.
The Fix:
- Subscribe to payer policy updates and review POS requirements quarterly.
The Easy Way to Avoid POS Denials
If your practice does not have the time or staff to keep up with POS code rules across states and payers, outsourcing your mental health billing and credentialing can eliminate these costly errors.
📌 Learn more about our specialized services:
How to Prevent POS-Related Claim Denials in Mental Health
Avoiding claim denials due to incorrect Place of Service codes comes down to a mix of technology, process, and training.
1. Use Claim Scrubbing Software in Your EHR
Most modern EHR and billing platforms can flag mismatched POS and CPT combinations before the claim is submitted.
- Example: A therapy session with CPT 90837 and POS 11 for a telehealth session would trigger an alert.
📌 Related: Mental Health Billing Software for POS accuracy and automation.
2. Keep a Payer-Specific POS Cheat Sheet
Every payer can have slightly different rules for telehealth and facility-based services. Maintaining a quick reference guide for your billing team ensures consistency.
3. Audit Telehealth Claims Monthly
Regularly check a sample of telehealth claims to confirm that POS 02 and POS 10 are being applied correctly, especially for Medicaid and out-of-state patients.
4. Train Billing Staff on Mental Health POS Requirements
POS coding for mental health can be more complex due to therapy-specific CPT codes, telehealth variations, and state laws. Regular training sessions can prevent recurring errors.
Conclusion
Accurate Place of Service (POS) coding for mental health providers is more than just meeting compliance requirements, it is essential for reducing claim denials, ensuring faster insurance reimbursements, and improving practice revenue. Whether you are billing for therapy sessions, psychiatric evaluations, counseling services, or telehealth mental health visits, the correct POS code helps you stay compliant with Medicare, Medicaid, and commercial insurance rules while meeting state-specific mental health billing regulations. At MedStates, we specialize in mental health billing for therapists, psychologists, psychiatrists, and behavioral health clinics in Texas, California, Florida, and nationwide through complex POS code requirements to maximize claim acceptance rates and cash flow. Book your free mental health billing consultation today and let us help you implement precise POS coding strategies that protect your revenue and prevent costly payment delays.
