Psychiatry sits at the intersection of medical billing and behavioral health billing — and it follows the rules of neither cleanly.
A psychiatrist who conducts a medication management visit and then spends additional time on psychotherapy can bill both services for the same encounter. The E/M visit is billed using standard medical evaluation codes. The psychotherapy is billed using the add-on codes — 90833 for 16–37 minutes, 90836 for 38–52 minutes. But the E/M code requires Modifier 25 to establish that it was a separately identifiable service, and the documentation must clearly support both components.
Most psychiatric practices bill one or the other — not both — because the combined billing is complex enough that errors are common. That caution costs practices significant recurring revenue.
The Three Billing Problems That Hit Psychiatry Practices Hardest
1. E/M + Psychotherapy Add-On Code Combinations
The add-on codes 90833, 90836, and 90838 can only be billed alongside specific E/M codes. They require a Modifier 25 on the E/M, documentation supporting both the evaluation and psychotherapy component, and a time record showing that the psychotherapy portion met the minimum threshold. The most common error: billing the E/M correctly but omitting the add-on code entirely.
2. MDM vs. Time-Based Billing After the 2021 Changes
Since the 2021 E/M coding changes, psychiatrists can choose between MDM-based E/M leveling and time-based E/M leveling. Time-based leveling counts total time spent with the patient — including psychotherapy time — which changes the calculation when both services are billed. Most psychiatric practices haven’t fully adapted to this flexibility.
3. Credentialing Differences Between Medical and Behavioral Health Plans
Psychiatrists frequently have different credentialing status with the medical insurance plan and the behavioral health carve-out network managed by Magellan, Optum, or Beacon. A psychiatrist who is in-network with Blue Cross for medical visits may be out-of-network with the Blue Cross behavioral health carve-out for psychiatric care. Claims go to the wrong payer, get denied, and require correction — sometimes after the timely filing window has closed.
A solo psychiatry practice came to us billing only E/M codes — no add-on psychotherapy codes — because a previous biller had told the physician the combined billing was “too complicated and not worth the hassle.”
We reviewed 90 days of encounters in Kareo. The physician was conducting 15–25 minute psychotherapy additions on approximately 60% of encounters and documenting them in clinical notes — the documentation was there. The billing simply wasn’t capturing it.
We implemented the E/M + add-on workflow with Modifier 25 and time documentation. Within the first full billing cycle, monthly collections increased by $9,200. The physician had been leaving that revenue uncollected for over 18 months.
Separately, four patients on Cigna plans had been denied CO-109 for six months. The psychiatrist was in-network with Cigna Medical but had never enrolled with Cigna Behavioral Health — the carved-out behavioral entity that handled all outpatient psychiatric services. We corrected the enrollment and resubmitted all claims within the timely filing window, recovering $17,400 in back-paid claims.
Common Psychiatry Billing Denial Codes
| Denial Code | Reason | Fix |
|---|---|---|
| CO-4 | Modifier missing or incorrect | Modifier 25 required on E/M when add-on psychotherapy billed |
| CO-97 | Payment bundled with other service | Add-on submitted without required base E/M — resubmit both together |
| CO-50 | Non-covered service | Verify behavioral health vs medical benefit for psychiatry |
| CO-109 | Claim not covered by this payer | Identify carve-out at eligibility; route to behavioral health entity |
| CO-B7 | Provider not eligible | Confirm credentialing with both medical plan and behavioral carve-out |
Frequently Asked Questions
Should psychiatrists bill E/M codes, psychotherapy codes, or both?
When a psychiatrist conducts medication management and then performs psychotherapy in the same session, billing both the E/M and the add-on psychotherapy code is appropriate and fully supported by CMS. Most practices that aren’t doing this are leaving $4,000 to $10,000 per month uncollected.
How much additional revenue does E/M plus add-on billing generate?
A psychiatrist seeing 18 patients per day with 60% eligible for add-on billing — at an average add-on reimbursement of $40–55 per session — generates $7,800–$10,800 per month in additional collections. Most practices see the full impact within the first billing cycle.
How do you identify carve-out credentialing gaps?
Before the first claim is submitted, our billers verify payer routing for each patient and run a credentialing audit to identify any gaps between medical panel enrollment and behavioral health panel enrollment that may be causing silent denials.
What EHR systems do your psychiatry billers support?
Kareo/Tebra, SimplePractice, AdvancedMD, Therapy Notes, Office Ally, NextGen, and Practice Fusion.
Psychiatry billing requires E/M and add-on code expertise, carve-out payer routing, and Modifier 25 discipline — every session. Stop leaving the add-on revenue uncollected.
Book a free 15-minute call at drbillerz.com — or start the 4-week free pilot. No contracts. No obligation.