Psychological testing codes under Medicare still lack ‘work values’
from the National Psychologist, May/June 2000.


By Paula E. Hartman-Stein, Ph.D.


Question: Why do psychological testing codes receive lower fees in the Medicare payment system?

A: Under the Resource-based Relative Value Scale (RBRVS) system that determines payment for all medical services reimbursable by Medicare, psychological testing codes have historically lacked "work values" which accounts for lower allowed fees than for procedures such as psychotherapy. James Georgoulakis, Ph.D., APA representative to the Health Care Financing Administration’s (HCFA) Relative Update Committee explains that "only codes that have exclusive physician input have work values."

In a meeting in April, high level HCFA officials, Georgoulakis, and APA staff discussed whether psychologists conduct the testing procedures themselves. Georgoulakis contends that "HCFA’s mind set is that psychological assessments have both a professional component and a technical component." Just as cardiologists have technicians involved in conducting an electrocardiogram, many neuropsychologists employ psychometricians to administer the testing procedures while the doctoral level clinician’s role is primarily that of test interpretation. Before work values will be assigned, "HCFA will need data that demonstrate the professional component connected with psychological testing."


The AMA’s Relative Update Committee is scheduled to meet later this year to begin to examine all codes that do not have work values. Georgoulakis predicts that the earliest that HCFA will assign work values to assessment procedures will be late 2001.

Q: Why are Medicare carriers conducting audits of psychological and neuropsychological testing procedures?



A: Medicare carriers are required by the Social Security Act to apply safeguards against unnecessary utilization of services furnished by providers. According to a 1996 report by the Office of Inspector General, psychological testing of Medicare patients is one procedure that is more likely to be medically unnecessary or questionable than evaluation and individual therapy. In the last few years Medicare carriers are complying with the OIG’s recommendation to conduct focused medical reviews of psychologists whose utilization of psychological testing procedures is greater than their peers.

Q: What does the carrier ask the psychologist to produce to justify testing procedures?

A: To learn how the psychologist uses the testing procedure codes, the clinician will be asked to send in to the carrier documentation that may include a facesheet/patient history form, physician’s orders, and testing report.

Billing for psychological services that are not medically indicated by evidence in the patients’ medical records is considered abuse of the Medicare program.

Q: How much time is generally acceptable for billing when conducting psychological testing?

A: According to Antonio Puente, Ph.D., neuropsychologist from Wilmington, North Carolina and APA representative to the AMA Current Procedural Terminology (CPT) panel, "6 to 8 hours of billing that includes face to face testing plus interpretation and write-up time is within the usually accepted norm for neuropsychological evaluations". He added that some neuropsychologists bill for 10 hours. Supporting documentation must be available in the patient’s medical record for claims billed with an unusual amount of time.

Some carriers expect that the exact time spent with the patient will be documented in the patient’s medical records and be available for postpayment audit. If the patient’s condition requires that the testing be done over several days, the testing time should be combined and reported on the last date of service.

Q: Are there specific diagnostic codes that must be used when billing for testing services?

A: Georgoulakis explained that "in the mental health area, the Health Care Financing Administration has no national policy. Each carrier has a lot of latitude in determining specific regulations." In general, Georgoulakis contends that when using neuropsychological testing codes such as 96115 or 96117, psychologists should use a code from the International Classification of Diseases, Ninth edition (ICD-9) showing a neurological condition, but "HCFA will look at the pattern of diagnostic codes for testing services. The psychologist likely to be audited is the one who uses major depressive disorder, for example, or another psychiatric diagnosis repeatedly when billing for neuropsychological testing."




Paula Hartman-Stein, Ph.D. is a clinical psychologist and consultant to practitioners on Medicare issues and psychological care of older adults. One of the seven Technical Consulting Group experts who worked on the original psychology RBRVS study at Harvard, she can be reached through her website,

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