Evaluation and management codes in mental health
Evaluation and Management (E/M) codes are essential tools to understand in healthcare billing, particularly within mental health services. Established by the American Medical Association (AMA), these codes facilitate standardized documentation and reimbursement for patient encounters. For therapists and mental health professionals, accurate use of E/M codes ensures compliance with billing regulations and appropriate compensation for services rendered.
Summary
- E/M codes help mental health professionals document and bill for evaluation and management services based on time or medical decision-making complexity.
- Accurate documentation, including tasks performed and total time spent, is essential to ensure proper code selection and reimbursement. Enrolling in an insurance billing course for therapists can help providers enhance their knowledge.
- Commonly used E/M codes vary depending on whether the patient is new or established, with distinct time ranges associated with each code.
- Challenges include using the correct modifiers when combining E/M with psychotherapy and staying current with coding guideline updates to avoid billing errors. By leveraging an EHR like TheraPlatform for efficient documentation and claim submission, therapists can tackle billing with ease.
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What are E/M codes?
E/M codes are part of the Current Procedural Terminology (CPT) codes maintained by the AMA. They constitute services rendered by clinicians in patient evaluations and management services. In collaboration with psychotherapy codes, E/M codes are utilized in mental health care to account for comprehensive care such as assessments, diagnosis, and planning.
These codes consider several factors, including the complexity of patient conditions, the scope of data reviewed, and the degree of risk associated with patient health. By explicitly identifying these factors, E/M codes present a detailed snapshot of services rendered in a patient encounter.
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Psychologists and other mental health clinicians who incorporate medication management or care coordination with other clinicians, such as a psychiatrist, psychiatric nurse practitioner, or clinical psychologist with prescribed authority, often utilize E/M coding to report on their entire scope of work. This would include both time spent directly with the client and time spent on record review, care coordination, and documentation on the date of service.
Commonly used E/M codes for therapists
For mental health professionals, in particular, those with prescribing authority, the following E/M codes are commonly utilized.
New client codes | Time | Established client codes | Time |
|---|---|---|---|
99202 | 15–29 minutes | 99212 | 10–19 minutes |
99203 | 30–44 minutes | 99213 | 20–29 minutes |
99204 | 45–59 minutes | 99214 | 30–39 minutes |
99205 | 60–74 minutes | 99215 | 40–54 minutes |
These codes are chosen based on the duration of time on the encounter date or the complexity of medical decision-making. For example, a moderate complexity of decision-making associated with an established patient in a 45-minute session would be code 99214.
Proper documentation for E/M coding
Accurate documentation is paramount for appropriate E/M code selection. As of 2021, providers can base their coding on the total time spent with the patient or the complexity of medical decision-making (MDM). This change, introduced by the AMA and CMS, was designed to reduce administrative burden and better reflect the realities of clinical practice.
Time-based documentation
When selecting codes based on time, it's essential to document all activities performed on the encounter date, not just face-to-face time. This may include reviewing patient records, ordering and interpreting tests, documenting clinical information, and consulting with other professionals.
For example, if a provider spends 40 minutes on these tasks for an established patient, code 99215 would be appropriate. It is important to specify what tasks were completed and how much time was spent.
Complexity-based documentation
Alternatively, providers can base their coding on the complexity of MDM, which considers:
- Number/complexity of problems addressed (e.g., bipolar disorder + anxiety = moderate complexity).
- Data was reviewed (e.g., lab results and collateral information from family).
- Risk of complications (e.g., suicidal ideation or polypharmacy raises risk level).
Each element determines whether the MDM is straightforward, low, moderate, or high complexity. Documenting these components in detail ensures the selected E/M code accurately reflects the service provided and supports compliance in case of an audit.
Challenges in E/M coding
Mental health professionals may encounter several challenges when applying E/M codes:
- Distinguishing between new and established patients: Misclassifying a patient can lead to incorrect code selection and potential billing issues. According to CPT guidelines, a new patient has not received professional services from the provider or another provider of the same specialty and group practice within the past three years. This distinction is especially important in group settings, where multiple providers may see the same patient.
- Integrating psychotherapy and E/M services: Each component must be clearly documented when both psychotherapy and E/M services are provided during the same session (e.g., medication management and talk therapy). The E/M portion should focus on evaluating or managing the patient's condition, while the psychotherapy note should reflect therapeutic interventions. In these cases, using the appropriate modifier signals that a separate and distinct service was provided helps prevent claim denials.
- Keeping up with coding changes: E/M coding guidelines, particularly those revised in 2021 and 2024, shifted the focus to time and medical decision-making rather than bullet-point checklists. Providers must stay current with coding updates, payer-specific rules, and documentation requirements. Regular training and review of coding resources can help ensure accurate and compliant billing practices.
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Tips for accurate E/M coding
To enhance accuracy in E/M coding, consider the following strategies:
- Stay informed: Regularly review updates from authoritative sources such as the American Medical Association (AMA) and the Centers for Medicare and Medicaid Services (CMS). E/M coding guidelines evolve over time, particularly with changes implemented in 2021 forward, so staying current with the latest documentation standards, time thresholds, and medical decision-making requirements is critical. Subscribing to newsletters or joining professional coding forums can also be helpful.
- Detailed documentation: Accurate, detailed documentation is the cornerstone of proper code selection. Record all clinically relevant elements of the encounter, such as the total time spent, key components of medical decision-making, assessments performed, treatment plans, and care coordination. This supports the selected code and ensures compliance if the record is audited.
- Use templates wisely: Electronic health record (EHR) templates can improve efficiency, but therapists should customize them to reflect the specific details of each patient encounter. Avoid relying solely on pre-filled text or generic dropdowns, as these may not capture the unique nuances of the visit and could lead to billing errors or denials.
- Seek training: Ongoing education is essential. Participate in coding workshops, webinars, or continuing education courses tailored to behavioral health and medical billing. Training reinforces current knowledge and prepares providers for future coding changes and payer-specific documentation expectations.
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Common pitfalls to avoid
Avoid these common errors to ensure compliance and accurate reimbursement:
- Overcoding or undercoding: Choosing a code that does not accurately reflect the complexity or time of the services provided can trigger red flags. Overcoding (billing for a more complex service than performed) is considered fraudulent, while underscoring can lead to lost revenue and failure to reflect the true scope of care delivered. Always match the code to the documented services.
- Insufficient documentation: A well-chosen code means little without supporting documentation. Incomplete or vague notes, such as missing time, assessment details, or decision-making rationale, can lead to claim denials and difficulty justifying care during audits. Clear, specific, and comprehensive notes are essential.
- Incorrect use of modifiers: When billing for psychotherapy and E/M services in one session, modifiers like 25 must indicate that a significant, separately identifiable service was provided. Failing to use modifiers or misusing them can cause delays in reimbursement or outright rejections.
- Neglecting to update coding practices: Using outdated codes or documentation standards increases the risk of non-compliance and financial penalties. Coding guidelines, especially for E/M, are revised periodically. Make it a practice to review current coding rules at least annually and adjust documentation workflows accordingly.
Understanding and correctly applying Evaluation and Management (E/M) codes is vital for mental health professionals, especially those who prescribe or collaborate with medical providers.
Accurate coding supports compliance, ensures fair reimbursement, and reflects the true complexity of care provided. By staying informed, documenting thoroughly, avoiding common pitfalls, and seeking regular training, providers can navigate the evolving landscape of E/M coding with greater confidence and clarity.
How EHR and practice management software can save you time with insurance billing for therapists
EHRs with integrated billing software and clearing houses, such as TheraPlatform, offer therapists significant advantages in creating an efficient insurance billing process. The key is minimizing the amount of time dedicated to developing, sending, and tracking medical claims through features such as automation and batching.
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What are automation and batching?
- Automation refers to setting up software to perform tasks with limited human interaction.
- Batching or performing administrative tasks in blocks of time at once allows you to perform a task from a single entry point with less clicking.
Which billing and medical claim tasks can be automated and batched through billing software?
- Invoices: Create multiple invoices for multiple clients with a click or two of a button or set up auto-invoice creation, and the software will automatically create invoices for you at the preferred time. You can even have the system automatically send invoices to your clients.
- Credit card processing: Charge multiple clients with a click of a button or set up auto credit card billing, and the billing software will automatically charge the card (easier than swiping!)
- Email payment reminders: Never manually send another reminder email for payment again, or skip this altogether by enabling auto credit card charges.
- Automated claim creation and submission: Batch multiple claims with one button click or turn auto claim creation and submission on.
- Live claim validation: The system reviews each claim to catch any human errors before submission, saving you time and reducing rejected claims.
- Automated payment posting: Streamline posting procedures for paid medical claims with ERA. When insurance offers ERA, all their payments will post automatically on TheraPlatform's EHR.
- Tracking: Track payment and profits, including aging invoices, overdue invoices, transactions, billed services, service providers
Utilizing billing software integrated with an EHR and practice management software can make storing and sharing billing and insurance easy and save providers time when it comes to insurance billing for therapists.
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References
American Medical Association. (2021). Documenting time for specific tasks per 2021 E/M office or other outpatient services. Retrieved from https://www.ama-assn.org/system/files/regulatory-myths-doc-coding-em.pdfHome+7American Medical Association+7American Medical Association+7
American Psychiatric Association. (2021). Quick Guide to 2021 Office/Outpatient E/M Services (99202-99215) Coding Changes. Retrieved from https://www.psychiatry.org/File%20Library/Psychiatrists/Practice/Practice-Management/Coding-Reimbursement-Medicare-Medicaid/Coding-Reimbursement/Private/Quick-Guide-to-2021-Office-Outpatient-EM-Services-Coding-Changes.pdfHome+2Home+2Home+2
Centers for Medicare & Medicaid Services. (2024). Evaluation and Management Services Guide. Retrieved from https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/eval-mgmt-serv-guide-ICN006764.pdfCMS
American Medical Association. (2024). Code and Guideline Changes. Retrieved from CPT® (Current Procedural Terminology) | CPT® Codes | AMA
American Academy of Family Physicians. (2022). E/M office visit coding series: Tips for time-based coding. Retrieved from https://www.aafp.org/pubs/fpm/blogs/gettingpaid/entry/emcoding-series-part-two.htmlAAFP
AAPC. (2021). Accounting for Time in Documentation. Retrieved from https://www.aapc.com/blog/88095-accounting-for-time-in-documentation/AAPC+2AAPC+2AAPC+2
AAPC. (2021). Determining MDM Complexity for E/M Leveling. Retrieved from https://www.aapc.com/blog/82778-determining-condition-complexity-for-e-m-leveling/AAPC
MedLearn Publishing. (2025). Back to Basics: Expert E/M Professional Tips for Elevated 2025 Success. Retrieved from https://medlearn.com/back-to-basics-expert-e-m-professional-tips-for-elevated-2025-success/
Coding Clarified. (2025). Evaluation and Management (E/M) Coding. Retrieved from https://codingclarified.com/e-m-2025/Coding Clarified
FAQs about E/M codes for mental health providers
What are E/M codes and when should therapists use them?
E/M codes are CPT® codes used to bill for evaluation, medical decision-making, and management services. Mental health providers—especially those with prescribing authority—use them to document clinical assessment, diagnosis, and treatment planning.
How do therapists choose the correct E/M code?
E/M codes are selected based on either total time spent on the date of service or the complexity of medical decision-making. Documentation must clearly support the method used to justify the code.
Can E/M codes be billed with psychotherapy?
Yes. When E/M and psychotherapy are provided in the same session, each service must be documented separately and billed with the appropriate modifier to show they are distinct services.
