Tele-Mental Health Billing: Updated CMS & Payer Requirements

How has tele-mental health evolved from an emergency solution during the pandemic to a lasting model of care in 2025?

The shift has been remarkable, with technology bridging the gap between patients and providers like never before. During the pandemic, temporary billing flexibilities allowed mental health professionals to deliver care remotely without worrying about complex compliance rules.

But 2025 introduces a new phase where structured billing policies and compliance standards take center stage as healthcare systems stabilize. The CMS and major payers have released updated guidelines that redefine how tele-mental health services are billed, documented, and reimbursed.

This blog will help you understand these updates to ensure timely reimbursement, minimize claim denials, and maintain compliance in an increasingly digital mental health scenario.

Key CMS 2025 Updates

The CMS introduced major updates impacting how tele-mental health services are billed and reimbursed. These changes focus on maintaining access to behavioral health care while improving documentation accuracy and compliance.

• Permanent Coverage for Audio-Only Services

A significant update for 2025 is the permanent authorization of two-way audio-only telehealth for behavioral and mental health services. This ensures that patients who lack access to video-capable devices or stable internet can still receive essential care through phone-based communication. But providers must document why the video was not used and include all relevant clinical details within the patient record. This not only supports compliance but also protects against claim denials during audits.

• Patient Location Flexibility

CMS has retained location flexibility for tele-mental health care in 2025 to allow patients to receive treatment from the comfort of their own homes. Unlike most other telehealth services that returned to pre-pandemic restrictions after September 30, 2025, behavioral and mental health services remain exempt from geographic and originating site limitations. This continued flexibility ensures equitable access to care especially for patients in rural and underserved areas.

Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) are also permitted to provide tele-mental health services without requiring an in-person visit until January 1, 2026, allowing these facilities additional time to transition smoothly.

• Enhanced Documentation Requirements

CMS has strengthened documentation expectations for all tele-mental health claims in 2025. As a result providers are required to maintain comprehensive and clearly structured records that reflect the care delivered. In fact, each claim must include:

• A detailed treatment plan outlining goals and interventions.
• Progress notes describing clinical updates and outcomes.
• The communication method used (audio or video).
• The patient’s location during the session.

These enhanced requirements are designed to ensure accurate billing and compliance with CMS’s heightened auditing activities. Proper documentation helps validate medical necessity, prevents errors, and supports prompt reimbursement.

• Introduction of HCPCS Codes for DMHT

CMS introduced three new HCPCS codes for Digital Mental Health Treatment (DMHT) devices in recognition of the growing role of technology in behavioral health care. These codes allow for reimbursement when FDA-cleared digital tools are integrated into an active behavioral treatment plan.

• G0552: Covers the supply and setup of a digital mental health device.
• G0553: Applies to the first 20 minutes of monthly device management.
• G0554: Applies to each additional 20 minutes of management time.

This update encourages providers to incorporate evidence-based digital interventions into their ongoing therapy, while ensuring fair compensation for the time and resources required.

• Billing Codes and Medicare Guidance

Although the American Medical Association (AMA) introduced the 98000-98015 series of CPT codes for telemedicine in 2025, Medicare has not yet recognized most of these codes for billing purposes. Therefore, providers should continue using traditional Evaluation and Management (E/M) codes (99202–99215) for Medicare claims.

Additionally, a new CPT code 98016 was introduced for brief (5–10 minute) communication-based services such as check-ins or follow-up calls. However, this code is not yet reimbursed by Medicare and should only be used if accepted by a specific payer. Therefore, it is essential to confirm the acceptance with each payer before billing.

• Correct Use of Modifiers and Place of Service Codes

CMS emphasizes the correct application of modifiers and service location codes to ensure claim accuracy.

• Modifier 93: Used for audio-only telehealth visits and documentation must explain why video was not feasible.
• Modifier 95: Indicates synchronous, video-based telehealth interactions.
• Modifier FQ: Used by RHCs and FQHCs for audio-only behavioral health encounters.
• Place of Service (POS) 10: Identifies the patient's home as the location of service.

Using these identifiers correctly helps distinguish between service types, prevents billing errors, and supports smoother reimbursement processing.

Payer-Specific Requirements and Variations

Though CMS provides nationwide rules for Medicare, commercial insurers and Medicaid programs often maintain their own tele-mental health billing policies. These differences have become more noticeable in 2025 as various payers adjusted their requirements independently.

• Varying Rules Among Payers

Commercial payers and Medicaid programs differ in their coverage criteria, accepted codes and documentation standards. Some insurers continue to honor expanded telehealth flexibilities introduced during the pandemic, whereas others have reverted to pre-2020 restrictions. This variation means that specific private payers may not cover a service reimbursed by Medicare. Therefore, providers should routinely review each payer's telehealth policy to ensure correct coding and billing.

• Maintaining Compliance Across Payers

Keeping in mind the rapid pace of policy changes, ongoing monitoring of payer updates is essential. As a result, practices can ensure compliance by:

• Creating a centralized payer policy tracker listing accepted codes, modifiers and service locations.
• Conducting routine staff training to keep billing teams informed of updates.
• Performing periodic internal audits to detect errors early and reduce denials.

These proactive measures help ensure accuracy, maintain consistency across claims and safeguard reimbursement from multiple payers.

Conclusion

Staying compliant with the evolving tele-mental health billing requirements in 2025 requires a proactive and organized approach. Healthcare providers should begin by carefully reviewing payer-specific telehealth and mental health billing policies to ensure alignment with both CMS and commercial payer standards. This foundational step helps prevent claim denials and ensures that reimbursement processes remain consistent across different payers.

The next step is updating internal documentation templates for treatment plans and progress notes. These updates allow providers to capture all required information in accordance with the latest regulations to ensure accurate record-keeping and smooth audit readiness. Moreover it is crucial to ensure that technology systems are capable of accurately capturing patient locations and visit modalities. This not only supports regulatory compliance but also enhances transparency during billing reviews.

Furthermore, partnering with an experienced medical billing company, such as 24/7 Medical Billing Services, can make this transition smoother and more efficient. With their expertise in tele-mental health billing, they offer continuous compliance guidance, streamlined claim management, and real-time updates on regulatory changes. Their comprehensive support enables providers to stay focused on delivering quality care while maintaining financial stability and maximizing reimbursement potential in 2025.

FAQs

Do the latest CMS and payer updates affect both psychiatrists and therapists?

The new rules apply to all qualified mental and behavioral health professionals offering telehealth services.

Are there any changes to patient consent requirements for tele-mental health?

Providers must obtain and document patient consent for each telehealth encounter.

How can providers prepare for future telehealth policy updates?

Regularly reviewing CMS publications and payer bulletins ensures continued compliance and readiness.

Do the updates encourage hybrid models of care?

CMS supports combining virtual and in-person visits to enhance flexibility in mental health treatment.