Medicare pays a fixed approved amount for each mental health CPT code — a rate set annually by the Centers for Medicare & Medicaid Services (CMS) through the Medicare Physician Fee Schedule (MPFS). That amount is what Medicare considers the full value of the service, regardless of what a provider charges. Medicare then pays 80% of the approved amount after the beneficiary's deductible is met; the remaining 20% is the patient's responsibility, typically paid out-of-pocket or covered by a secondary insurance plan.
Understanding where those numbers come from — and where to find the current rate for your specific location — prevents two common billing mistakes: charging less than Medicare will actually pay, and expecting Medicare to pay more than its fee schedule allows.
How the Medicare-approved amount is calculated
Medicare doesn't set a flat national dollar amount for every service. Instead, it uses a formula:
Approved Amount = (Work RVU + Practice Expense RVU + Malpractice RVU) × Geographic Adjustment (GPCI) × Annual Conversion Factor
Each CPT code is assigned Relative Value Units (RVUs) reflecting the physician work, practice expenses, and malpractice costs involved. Those RVUs are adjusted by a Geographic Practice Cost Index (GPCI) that accounts for cost-of-living differences by location — a session in Manhattan is adjusted upward compared to the same session in rural Tennessee. The adjusted RVUs are then multiplied by the annual conversion factor, a dollar-per-RVU rate that CMS sets each year through the MPFS final rule.
The result is that the Medicare approved amount for the same CPT code in the same year can differ by 20–30% or more depending on where the practice is located.
2025 national average Medicare rates for common mental health codes
The rates below are approximate national averages based on the 2025 Medicare Physician Fee Schedule. Actual payment in your market will differ based on your GPCI locality. Use the CMS Physician Fee Schedule Look-Up Tool with your specific ZIP code or locality to get the exact approved amount for your practice location.
| CPT Code | Service | Approx. National Average (2025) | Medicare Pays (80%) |
|---|---|---|---|
| 90791 | Psychiatric diagnostic evaluation | $175 | ~$140 |
| 90834 | Individual psychotherapy, 45 min | $97 | ~$78 |
| 90837 | Individual psychotherapy, 60 min | $137 | ~$110 |
| 90847 | Family psychotherapy with patient present | $122 | ~$98 |
| 90853 | Group psychotherapy | $55 | ~$44 |
| 90785 | Interactive complexity add-on | $37 | ~$30 |
| 99213 | Office visit, established patient, low complexity (E/M) | $116 | ~$93 |
| 99214 | Office visit, established patient, moderate complexity (E/M) | $167 | ~$134 |
Rates are updated each January 1 when the new MPFS takes effect. The conversion factor — the per-RVU dollar rate — has been subject to annual cuts under current law unless Congress intervenes, which it has done repeatedly through continuing resolutions. Confirm current rates through the CMS fee schedule tool or through your MAC's published locality rates before each new calendar year.
The 20% patient responsibility adds up. A Medicare patient attending weekly 90837 sessions pays roughly $27 per session in coinsurance (20% of ~$137). Over a year, that's $1,400 in patient responsibility. Practices that don't track and collect patient coinsurance are losing revenue that has already been contracted — the Medicare-approved amount includes that 20%, and it's owed whether collected or not.
How telehealth affects Medicare mental health rates
Telehealth mental health sessions bill with the same CPT codes as in-person sessions, but with a telehealth place-of-service modifier. Medicare has maintained parity between in-person and telehealth rates for most behavioral health services — meaning the approved amount for a telehealth 90837 is the same as an in-person 90837 in most cases.
The key telehealth distinction for Medicare billing:
- POS 02 — Telehealth, patient not at home (patient at a clinic, school, or other non-home location)
- POS 10 — Telehealth, patient at home
For most Medicare mental health telehealth visits — where the patient is at home — POS 10 is correct. Using POS 02 for a home-based visit is an increasingly enforced billing error. The modifier 95 (synchronous telemedicine) is required on the service line for claims that include a telehealth POS code.
Telehealth flexibilities for mental health that were extended through the COVID-19 public health emergency have been subject to ongoing congressional action. Confirm current telehealth requirements with your MAC or through CMS telehealth guidance before billing assumes a policy that may have changed.
The CMS behavioral health fee schedule vs. the full MPFS
The CMS Physician Fee Schedule covers all Part B services — behavioral health codes are within it, not a separate document. When practitioners refer to the "CMS behavioral health fee schedule," they typically mean the subset of MPFS rates that apply to mental health and substance use disorder CPT codes.
CMS also publishes the Medicare Mental Health Parity guidance, which governs how Medicare Advantage plans must apply mental health benefits — but that's a coverage rule, not a fee schedule. Medicare Advantage plans set their own reimbursement rates within CMS framework, which means the approved amount from a Medicare Advantage plan may differ from traditional Medicare's MPFS rate for the same code.
If your practice accepts Medicare Advantage plans, verify rates with each plan separately — they negotiate fee schedules independently, and some pay above traditional Medicare rates while others pay below. "Medicare rates" and "Medicare Advantage rates" are not the same thing and should not be assumed to match.
What affects your actual Medicare payment
GPCI locality: Your practice's geographic locality determines the GPCI adjustment applied to each RVU. High-cost urban markets (Manhattan, San Francisco, Boston) receive higher adjustments; rural markets receive lower ones. The locality is tied to the practice address on your Medicare enrollment, not the patient's address.
Participating vs. non-participating provider status: Participating providers accept assignment on all Medicare claims and receive 100% of the Medicare-approved amount directly. Non-participating providers can choose whether to accept assignment claim-by-claim and receive 95% of the approved amount when they do. Most mental health providers enroll as participating to simplify billing and ensure direct payment.
Part B deductible status: The annual Part B deductible ($257 in 2025) must be met before Medicare pays its 80%. Early in the calendar year, claims for patients who haven't met their deductible will show a higher patient responsibility until the deductible clears.
Questions about Medicare rates in your specific market, how to verify your locality, or what to expect from your Medicare Advantage payer mix? Schedule a consultation — a direct conversation with a principal, not a sales script.