In 2026, behavioral health billing has become more complex due to rigorous enforcement of mental health parity laws, changes in telehealth regulations, and increasingly detailed time-based coding practices. The smallest mistake can lead to the rejection of a claim, a decrease in revenue, or your practice coming under regulatory scrutiny and facing penalties. This compliance checklist outlines the key rules that all professionals in mental health, such as therapists, psychologists, and psychiatrists, should follow for proper billing in behavioral health and to receive the highest possible reimbursement.

New Telehealth Billing Requirements for Mental Health Services

The 2026 updates have permanently transformed telehealth billing for mental health, offering expanded access while introducing new compliance obligations that providers must follow carefully.

Medicare Telehealth Permanency and Coverage Expansions

Medicare has permanently eliminated geographic restrictions on mental health telehealth services, allowing the patient’s home to serve as an authorized originating site. This change allows providers to bill at non-facility rates when using the Place of Service (POS) code 10. Audio-only telehealth is now permanently allowed for mental health encounters when audio-video technology is available but not used, ensuring patients with limited technology access can still receive care.

In-Person Visit Requirements You Must Follow

Starting January 30, 2026, Medicare requires providers to have furnished an in-person service within six months prior to the initial telehealth service. After the initial visit, providers must conduct at least one in-person visit every 12 months to maintain eligibility for telehealth billing. Document each in-person visit thoroughly, including the date, location, and services provided, as auditors will verify compliance with these requirements.

Place of Service Codes for Telehealth Mental Health

Critical billing requirements for POS codes:

  • Use POS 10 when the patient is at home to receive non-facility reimbursement rates
  • Use POS 02 for telehealth services when the patient is in a healthcare facility
  • Incorrect POS designation costs practices an average of $35-$60 per visit
  • Apply modifier 95 to indicate services were provided via telehealth
  • Ensure your billing system correctly pairs POS codes with CPT codes

Proper place-of-service coding directly impacts behavioral health reimbursement. Using the wrong code is one of the most common behavioral health billing errors and can significantly reduce your revenue over time.

Time-Based Coding and Documentation Standards

Accurate time tracking and documentation are fundamental to behavioral health CPT codes. The 2026 guidelines require exact compliance with minimum time thresholds and comprehensive session documentation.

Common Therapy CPT Codes and Time Requirements

Psychotherapy time-based codes must meet these exact ranges:

  • 90832: Psychotherapy, 30 minutes (actual time: 16-37 minutes)
  • 90834: Psychotherapy, 45 minutes (actual time: 38-52 minutes)
  • 90837: Psychotherapy, 60 minutes (actual time: 53+ minutes)

When invoicing these mental health billing codes, it is necessary to record the exact start and end times of each session. If your therapy lasts 36 minutes, you can only claim 90832, not 90834. The correct understanding of billing 90837 requires the written record of 53 minutes, at least, of face-to-face psychotherapy time. Upcoding by selecting a higher time-based code without proper documentation violates compliance standards and triggers audit flags.

Essential Documentation for Medical Necessity

Every behavioral health billing claim must demonstrate medical necessity through comprehensive documentation. Your records should clearly explain why the service is needed by linking symptoms, functional impairments, and treatment goals. Treatment plans must outline personalized, measurable goals that are updated regularly to reflect patient progress.

Your progress notes must include:

  • Specific interventions used during the session
  • Patient’s response to treatment
  • Observable changes in symptoms or functioning
  • Exact time spent on service delivery
  • Clinical reasoning for continued treatment

Diagnosis codes should reflect severity and comorbidities using appropriate ICD-10 codes. This level of detail helps justify ongoing care and supports insurer authorization requests. When documentation clearly demonstrates medical necessity, you reduce the risk of claim denials and improve your behavioral health claim acceptance rate.

Common Billing Errors to Avoid in 2026

Prevent these frequent mistakes:

  • Billing therapy codes without documenting exact session duration
  • Using POS 02 instead of POS 10 for home-based telehealth visits
  • Missing the required in-person visits for telehealth patients
  • Submitting incomplete treatment plans that lack measurable goals
  • Selecting diagnosis codes that don’t reflect the patient’s severity level
  • Failing to obtain proper documentation of patient consent for telehealth
  • Not maintaining audit-ready records with provider signatures and credentials

Mental Health Parity and Compliance Essentials

Mental health parity laws ensure that behavioral health services receive equal treatment compared to medical and surgical benefits. Compliance with these regulations directly affects coverage decisions and reimbursement rates.

Understanding Mental Health Parity Laws in Billing

Mental health parity billing requirements mean that health insurance plans must apply the identical deductibles, co-payments, and coinsurance to the treatment of mental illnesses and drug abuse as they do for the treatment of physical ailments. Insurance companies cannot impose restrictions, such as visit limits, prior authorization, or utilization review, on mental health services unless they apply to medical services.

In the case of insurers, they are to carry out documented comparative analyses that can be presented as proof of equal stringency for both mental and medical benefits. If you experience a claim denial or coverage restriction, the tussle with the insurance company could involve requesting these analyses to verify parity compliance. It is the network adequacy standards that require plans to ensure sufficient access to mental health clinicians so patients do not have to endure long wait times or travel long distances.

Credentialing and Contracting Considerations

Proper credentialing is essential for behavioral health billing across different provider types. Licensed Clinical Social Workers (LCSWs), psychologists, and psychiatrists each have specific credentialing requirements that vary by state and payer. Participating providers must maintain active contracts with insurers and verify that their credentials remain current to avoid claim denials.

Medicaid behavioral health billing requirements differ significantly by state. Some states require additional provider enrollment steps, specific modifiers for certain services, or prior authorization for therapy codes beyond a certain number of visits. Review your state’s Medicaid behavioral health manual regularly to ensure compliance with local regulations.

Optimizing Your Behavioral Health Revenue Cycle Management

Implementing strong revenue cycle management practices helps minimize claim denials and accelerate reimbursement. Verify patient eligibility before each appointment to confirm active coverage and understand benefit limitations. Submit claims promptly with complete, accurate information to avoid processing delays.

Monitor your denial rates closely and identify patterns in rejected claims. Common issues include incorrect coding, insufficient documentation, or missing prior authorizations. Develop standardized workflows for eligibility verification, coding, documentation, and claim submission to maintain consistency across your practice.

Conclusion

Behavioral health billing compliance in 2026 requires vigilant attention to telehealth requirements, precise time-based coding, comprehensive documentation, and mental health parity standards. By following this compliance checklist, you protect your practice from claim denials, ensure proper reimbursement, and maintain regulatory compliance.

Implement these guidelines immediately to optimize your behavioral health billing processes. Regularly review updates from CMS, state Medicaid programs, and private payers to stay current with evolving requirements. Consider partnering with specialized behavioral health billing services if managing compliance in-house becomes overwhelming, allowing you to focus on delivering quality patient care while experts handle your revenue cycle management.

Ready to improve your billing compliance? Partner with our specialized behavioral health billing services to ensure your practice meets every 2026 requirement while you focus on patient care.

 

FAQs

Q1: What is the in-person visit requirement for Medicare telehealth in 2026?

Providers must conduct an in-person visit within 6 months before the initial telehealth service, then at least one in-person visit every 12 months to maintain telehealth billing eligibility.

Q2: What’s the difference between CPT codes 90834 and 90837?

90834 covers 45-minute psychotherapy sessions (38-52 minutes actual time), while 90837 covers 60-minute sessions (53+ minutes actual time). You must document exact session times to bill correctly.

Q3: Which Place of Service code should I use for home-based telehealth?

Use POS 10 when the patient is at home to receive non-facility reimbursement rates. Using the incorrect POS 02 code can cost your practice $35-$60 per visit.

Q4: What documentation is required to prove medical necessity?

Your records must link symptoms to functional impairments and treatment goals, include personalized treatment plans with measurable objectives, detail interventions used, patient responses, and exact time spent on services.