The Pandemic and It’s Impact on the Mental Health of Older Adults

For almost two years of visiting family in person, hugs and smiles were all practically none existent during COVID-19. Older adults had greater worries and more isolation, especially if institutionalized. Depression and anxiety in older adults doubled due to isolation and worry among Medicare beneficiaries.

What mental health benefits and substance use disorder benefits does Medicare cover?

Medicare covers a range of mental health and substance use disorder services, both inpatient and outpatient, and covers outpatient prescription drugs used to treat these conditions Medicare Advantage plans are required to cover benefits covered under traditional Medicare and most cover Part D prescription drugs as well, but out-of-pocket costs may differ between traditional Medicare and Medicare Advantage plans, and vary from one Medicare Advantage plan to another.
Inpatient Services

• Medicare Part A covers inpatient care for beneficiaries who need mental health treatment in either a general hospital or a psychiatric hospital.

• Medicare Part B covers one depression screening per year, a one-time “welcome to Medicare” visit, which includes a review of risk factors for depression, and an annual “wellness” visit, where beneficiaries can discuss their mental health status. Part B also covers individual and group psychotherapy with doctors (or with certain other licensed professionals, depending on state rules), family counseling (if the main purpose is to help with treatment), psychiatric evaluation, medication management, and partial hospitalization.

• Part B also covers outpatient services related to substance use disorders including opioid use disorder treatment services, which include medication, counseling, drug testing, and individual and group therapy. Medicare covers one alcohol misuse screening per year, and for beneficiaries determined to be misusing alcohol, four counseling sessions per year. Medicare also covers up to 8 tobacco cessation counseling sessions in a 12-month period.

Prescription Drugs

The Medicare Part D program provides an outpatient prescription drug benefit to people on Medicare who enroll in private plans, including stand-alone prescription drug plans (PDPs) or Medicare Advantage prescription drug plans (MA-PDs). Medicare Part D prescription drug plans cover retail prescription drugs related to mental health and are required to cover all or substantially all antidepressants, antipsychotics, and anticonvulsants (such as benzodiazepines), as each is one of the six protected classes of drugs in Part D.

Which health providers can bill Medicare directly for mental health and substance use disorder services, and how much does Medicare pay for these services?

Medicare provides coverage and reimbursement for mental health services provided by psychiatrists or other doctors, clinical psychologists, clinical social workers, clinical nurse specialists, nurse practitioners, and physician assistants. Medicare does not provide coverage or reimbursement for mental health services provided by licensed professional counselors and licensed marriage and family therapists.

Medicare fees vary by type of provider, according to the Medicare Physician Fee Schedule:

Medicare Provider Reimbursement for Mental Health and Substance Use Disorder Services

Provider Type
Provider Payment Rate
Paid at 100% under Medicare Physician Fee Schedule
Clinical Psychologist
Paid at 100% under Medicare Physician Fee Schedule*
Clinical Social Worker
Paid at 75% of clinical psychologist’s Medicare Physician Fee Schedule*
Clinical Nurse Specialist
Paid at 80% of the lesser of actual charge or 85% of amount a physician gets under Medicare Physician Fee Schedule*
Nurse Practitioner
Paid at 80% of the lesser of actual charge or 85% of amount a physician gets under Medicare Physician Fee Schedule*
Physician Assistant
Paid at 80% of the lesser of actual charge or 85% of amount a physician gets under Medicare Physician Fee Schedule*
NOTE: *Paid only on assignment.
SOURCE: Centers for Medicare & Medicaid Services, Medicare Mental Health, March 2022. PNG

Are psychiatrists accessible to Medicare beneficiaries?

The majority of physicians, both primary care and specialists, report taking new Medicare patients, similar to the share who take new privately insured patients. Psychiatrists, however, are less likely than other specialists to take new Medicare (or private insurance) patients. According to a recent KFF analysis, 60% of psychiatrists are accepting new Medicare patients, which is just over 20 percentage points lower than the share of physicians in general/family practice accepting new patients (81%). However, the survey used to conduct the analysis does not distinguish among physicians seeing new patients covered under traditional Medicare or Medicare Advantage, so it is not clear whether physicians are more inclined to accept new Medicare patients in either Medicare Advantage plans or traditional Medicare.
Further, psychiatrists are more likely than other specialists to “opt out” of Medicare altogether. Providers who opt out of Medicare do not participate in the Medicare program and instead enter into private contracts with their Medicare patients, allowing them to bill their Medicare patients any amount they determine is appropriate. Overall, 1% of all non-pediatric physicians have formally opted-out of the Medicare program, with opt-out rates highest among psychiatrists: 7.5% of psychiatrists opted out in 2022. In fact, psychiatrists account for 42% of the 10,105 physicians opting out of Medicare in 2022.

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