In mental health billing, precision is not optional, it’s essential. Modifiers serve as vital two-character codes that provide clarity to payers, explaining why a service was altered without changing its definition. For behavioral health providers, using the correct modifiers can mean the difference between a clean claim and a costly denial. Unlike general healthcare billing, mental health services often involve nuanced care models—telepsychiatry, therapy sessions, multiple same-day encounters, and extended visits. That is where modifiers come in. They help understand the service provided, whether it was delivered virtually, by a supervising clinician, or involved a prolonged duration. In this blog, we will break down:
Whether you are billing for psychotherapy, psychiatric evaluations, or medication management, this guide will help you apply modifiers confidently and correctly.
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Modifiers play a pivotal role in clarifying the who, what, how, and where of mental health services. While they are universal in purpose, their application can vary significantly by state, payer, and setting—especially in mental health billing across states like Texas, California behavioral health billing, New York, and Florida.
Used When: A psychiatrist or mental health NP performs an Evaluation and Management (E/M) service in addition to psychotherapy on the same day.
Example Scenario: In Texas Medicaid billing, Modifier 25 is frequently used to separate a medication check from therapy provided by the same clinician.
Best practice: Document both services thoroughly to avoid CO-97 (denied as included in another service).
Used When: You need to report two services that are not normally reported together but are appropriate due to different times, sessions, or practitioners.
California Tip: Medi-Cal audits often flag Modifier 59 if used without clinical justification. In Los Angeles County, providers must specify in progress notes how the procedures are different in context.
Used When: Documenting services rendered by less than a master’s-level provider, e.g., case managers, peer support specialists, or BA-level staff.
Local Variation: In Florida’s Behavioral Health System, HN is used with H0031 (mental health assessment by non-physician) to distinguish the provider’s qualifications.
Used When: Services are rendered via synchronous telecommunication (video/audio).
State Nuance: In New York mental health billing, Medicaid mandates Modifier 95, and sometimes POS 10 (home-based telehealth) must be paired for reimbursement.
Common For: Therapists holding an LCSW, LMFT, or LPC license.
California Insight: In counties under CalAIM (California Advancing and Innovating Medi-Cal), Modifier HO is essential for reimbursement tracking and care coordination payments.
Used When: Reporting services delivered in a group therapy setting.
In Texas: Billing 90853 (group therapy) with Modifier HQ is required by Texas Medicaid, especially in Federally Qualified Health Centers (FQHCs).
This modifier is commonly required in state-funded or block grant billing situations to denote that services are delivered under a mental health program umbrella.
Example: In Missouri, HE is needed for grant-funded crisis services, often alongside Modifier HF (substance use program).
Used By: Licensed clinical psychologists when billing for psychotherapy services.
Billing tip: Avoid misuse with LCSWs or MFTs—AJ is strictly for psychologists. Incorrect application can lead to CO 4 denials (procedure code inconsistent with provider type).
Many urban Medicaid programs, like those in San Francisco, Houston, or Miami-Dade, apply prior authorization rules and documentation standards that influence how modifiers like 25, 59, and HO must be used.
For instance:
Misapplying modifiers can trigger common denial codes such as:
In mental health billing, modifiers do not always work alone. Strategic use of modifier combinations can unlock full reimbursement, prevent downcoding, and improve transparency for payers—especially in telehealth, dual services, and multidisciplinary treatment cases.
Below are common modifier pairings, use-case walkthroughs, and how these combinations are interpreted by major payers in states like California, Texas, Florida, and New York.
Scenario: A psychiatrist provides a medication evaluation (E/M service) followed by telepsychiatry psychotherapy.
Used In:
Claim Tip: The EHR documentation must clearly distinguish the E/M and psychotherapy segments.
Scenario: A licensed professional counselor (LPC) provides 45-minute therapy via video.
Common in:
Scenario: A mental health provider offers a group therapy session and a separate diagnostic assessment on the same day.
Used by:
Scenario: A case manager (BA-level) performs case coordination as part of a state-funded program.
Required by:
Compliance Note: Documentation must validate program enrollment and provider credentials.
Scenario: A clinical psychologist offers a psychiatric assessment and provides therapy on the same day.
Used In:
Scenario: Some legacy systems or hybrid health plans may still request both modifiers, although generally one is sufficient.
Billing Alert: Check payer policies — some Texas managed care organizations (MCOs) and tribal health clinics still accept GT along with 95 for older platforms.
Modifier(s) | Used In | Common CPT Codes | Payer Expectations |
---|---|---|---|
Modifier 95 | California, Texas, New York | 90834, 90837 | Must be paired with POS 10 or 02 for telehealth; some payers require prior authorization. |
Modifier GT | Rural States (e.g., Montana, Idaho) | 90791, 90832 | Used by Medicare Advantage plans; indicates real-time interactive telehealth. |
Modifier 25 | All states | 99213 + 90833 | Signifies separate E/M service with psychotherapy; required by most private payers. |
Modifier 59 | California, Florida | H2019 + 90837 | Indicates distinct procedural service; required when bundling risks overlap. |
Modifier HF | Texas, Georgia, North Carolina | H0001, H0031 | Used for substance abuse and behavioral services billing under Medicaid. |
Even experienced billers and mental health providers often make critical errors when applying modifiers. These mistakes lead to claim denials, reduced reimbursement, and payer audits. Below, we explore the most common modifier billing mistakes in behavioral health and how to avoid them.
Mistake: Applying Modifier 25 on an E/M code with psychotherapy (e.g., 99214 + 90833) without clear documentation showing a distinct and separately identifiable service.
Why it Fails: Many payers, including Medicare and Aetna, require detailed progress notes indicating the E/M service was medically necessary and separate from the therapy session.
Fix: Include supporting documentation such as:
Modifier 95
GT
Mistake: Using both Modifier 95 and GT on the same telehealth CPT code or applying the wrong one based on the payer.
Why it Fails: Medicare now prefers POS 10 with Modifier 95. GT is legacy and primarily used by some Medicaid and commercial plans. Mixing them signals non-compliance.
Fix:
Mistake: Adding Modifier 59 to psychotherapy codes just to override edits, especially with H-codes like H2019 and 90837.
Why it Fails: Modifier 59 should be used only when the procedures are distinctly different and performed in separate encounters or anatomical sites—not simply to get a claim paid.
Fix:
Mistake: Billing Medicaid in states like Texas or Florida without state-required modifiers (e.g., Modifier HF for substance abuse, Modifier U1-U9 for service tiering).
Why it Fails: Medicaid programs vary drastically by state. Missing modifiers signal non-compliance, especially for intensive outpatient programs or MHSA-funded services.
Fix:
Mistake: Habitually adding Modifiers 25, 59, or 95 on claims to push them through clearinghouses without clinical justification.
Why it Fails: Carriers can audit such claims retroactively, and unsupported use can lead to recoupment, fines, or fraud investigations.
Fix:
Mental health billing modifiers are not universally standardized—each U.S. state may enforce unique Medicaid requirements and modifier rules, particularly for behavioral health and substance use services. Failing to comply with these local variations can result in claim denials, delayed reimbursements, and audits. Below is a deep dive into how modifiers are used differently across key states.
Using the right modifier in medical billing in mental health claims is not just a compliance step—it is a critical strategy to ensure full and timely payment of medical services. Below are proven tips and best practices that behavioral health providers and billing teams can follow to optimize modifier usage and avoid common revenue cycle issues.
Modifiers like HO (Master’s level clinician) and HN (Bachelor’s level) must match the provider’s credentialing file and the payer’s documentation. A mismatch can cause:
Always refer to:
Many denials occur simply due to outdated or missing modifier references.
Many services require stacked modifiers to indicate:
💡 Tip: If you’re unsure whether multiple modifiers are allowed, check with payer-specific billing guidelines—some systems reject claims with only one when two are expected.
✅ Both must be clearly documented in the patient chart.
⚠️ Misuse of these modifiers is a red flag for audits.
Payers like Medicare, Medicaid, UnitedHealthcare, Aetna, and state-managed MCOs often:
Subscribe to payer bulletins, and assign a billing staff member to track modifier changes quarterly.
Maintain a report that tracks:
From this, update your modifier cheat sheet and include payer-specific notes.
Include modifier usage in:
This reduces:
Modern EHRs in mental health billing and billing systems can:
This reduces manual error and ensures compliance with real-time payer rules.
Even seasoned billing professionals make mistakes with mental health modifiers, leading to delayed payments, denials, and compliance risks. Below are the most frequent errors in mental health billing modifier usage—and how to prevent them.
Many practices forget to include modifier GT, 95, or FQ/FQHC-specific modifiers when billing telepsychiatry or online therapy. This leads to automatic rejections from payers.
Fix:
Some billers use modifier 25 incorrectly when billing E/M + psychotherapy (e.g., 99214 + 90833). Without clear separation in documentation, the claim may be flagged or denied.
Fix:
State Medicaid programs (e.g., in California, Texas, and Florida) often require HO, HN, or HU modifiers to denote provider level. Missing these leads to denied or underpaid claims.
Fix:
Some billing systems allow incompatible modifiers like 59 and 25 or GT and 95 to be used together, which can result in NCCI edits or payer denial.
Fix:
Modifiers like U4–U9 or state-specific ones can be retired or changed annually. Using them can cause claim suspension or trigger audits.
Fix:
If a modifier (e.g., 59 or 25) is used, but the documentation doesn’t support it, the claim can be denied or recouped during an audit.
Fix:
Common Error | Modifier(s) Involved | Quick Fix |
---|---|---|
Forgot telehealth modifier | GT, 95, FQ | Add correct modifier + POS 10/02 |
Incorrectly used Modifier 25 | 25 | Separate, justify, and document E/M + psychotherapy |
Missed provider credential modifier | HO, HN, HU | Match modifier to credential and state rule |
Used conflicting modifiers | 59 + 25, GT + 95 | Verify against NCCI or payer-specific edit policies |
Outdated modifiers still in use | U4–U9, others | Update billing libraries quarterly |
No supporting documentation for modifier use | Any | Ensure note content aligns with modifier expectations |
In the realm of mental health billing, modifier compliance is not just about clean claims—it’s about protecting your practice from denials, clawbacks, and regulatory penalties. Accurate modifier use can make or break your audit outcomes and reimbursement reliability.
Insurance payers and federal programs like Medicare and Medicaid scrutinize modifier use, especially when it affects:
In states like California, Texas, and New York, where Medicaid managed care organizations (MCOs) have stricter documentation protocols, modifier misuse can result in:
To ensure audit-proof modifier usage:
Pro Tip: Payers like Aetna and Anthem often request clinical notes for claims with Modifier 25 or 59—even if not pre-authorized. Be ready.
Building audit resilience starts with proactive internal checks:
For mental health practices in urban regions like Los Angeles, Houston, or Chicago, insurers frequently audit telehealth services, especially where modifiers interact with parity laws.
The world of mental health billing is rapidly evolving—and so is the use of modifiers. As payer policies adapt to post-pandemic care models, digital therapy platforms, and parity enforcement, modifiers are becoming more nuanced, tech-integrated, and state-specific.
Future-Ready Tip: Join mental health billing forums, subscribe to CMS/Medicaid newsletters, and consult with billing experts quarterly to adapt to changes proactively.
Understanding and properly applying modifiers in mental health billing is not just about getting paid—it is about compliance, accuracy, and sustainable reimbursement. As telehealth expands, integrated care models grow, and states customize billing rules, modifiers will play an even more vital role in ensuring that mental health professionals are reimbursed fairly for the services they provide.
Whether you are a solo therapist, group practice, or behavioral health clinic, working with a billing partner that understands modifier-specific policies by state, payer, and service type can be a game-changer. With smart use of modifiers, you can reduce denials, maximize revenue, and future-proof your practice in a rapidly evolving mental healthcare landscape.
Stop letting modifier mistakes cost your practice time and money. At MedStates, we specialize in mental health billing with a deep understanding of CPT modifiers, payer-specific rules, and state-by-state variations.
Get in touch today for a free consultation and let us streamline your billing — so you can focus on what matters most: your patients.
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