Local Medical Review Policy (LMRP) Information

Definition of an LMRP

An LMRP is a Local Medical Review Policy. LMRPs are the coverage policies that are developed by the Medicare Insurance Carriers and apply directly to claims made to the Insurance Carrier for Coverage under Medicare. LMRPs outline how local carriers will review claims to ensure that they meet Medicare coverage and coding requirements. They specify under what clinical circumstances a service is covered and correctly coded. An LMRP includes a description of the service, specific procedure codes, and for each of these procedures, a list of covered and non-covered diagnostic codes.

LMRPs are issued separately for types of medical services, including Psychiatry and Psychological Services, so hundreds of LMRPs are in existence for each local carrier. In general, carriers have wide freedom to determine coverage; the only restriction is that their policies not directly conflict with a National Coverage Decision issued by CMS on the same issue.

LMRPs have been defined by CMS as "an administrative and educational tool to assist providers, physicians, and suppliers in submitting correct claims for payment" within a specified geographic area. However, the major goal of these local policies is to prevent overutilization of clinical services paid by CMS. Their impact on providers and beneficiaries can be to limit coverage or to deny claims outright. To view existing LMRPs on-line, including those for Psychiatric and Psychological Services, go to www.lmrp.net. This site will direct you to the websites of Medicare carriers by state.

Overview of Coverage for Psychological Services

This section provides a brief overview of common coverage provisions for psychological services under several LMRPs across different states. Its purpose is to acquaint the reader with the general nature of provisions as they commonly appear including provisions specific to dementia. Language presented in this section may or may not be similar to the coverage provisions that apply in your locality. For specific information about current coverage provisions where you practice, find the policy that applies at www.lmrp.net.

The most common LMRP for coverage for psychiatry and psychology services under Medicare Part B divides coverage into six sections, five of which are relevant to psychologists (Section 4, pertaining to medication management is reserved at this time for billing by physicians). The five sections of coverage relevant to clinical psychologists are:

  1. General Clinical Psychiatric Diagnostic or Evaluative Procedures
  2. Special Clinical Psychiatric Diagnostic or Evaluative Procedures
  3. Psychiatric Therapeutic Services
  4. Other Psychiatric Therapy
  5. Central Nervous System Assessments/Tests (e.g., Neuro-Cognitive, Mental Status, Speech Testing)

Section 1

General Clinical Psychiatric Diagnostic or Evaluative Procedures provides for a complete diagnostic evaluation. The CPT code* associated with Section 1 (90801) does not distinguish billing between physicians or psychologists. [* Current Procedural Terminology @2003 American Medical Association. All Rights Reserved]

Section 2

Special Clinical Psychiatric Diagnostic or Evaluative Procedures provides for diagnostic evaluation of patients who are not able to interact with ordinary verbal communication. Although the section is primarily intended for diagnostic evaluations of children, it may also be applied to patients with organic mental deficits or who are catatonic or mute. This section contains a specific exclusion for the dementias, however, as follows:

Other catatonic states may be covered if documentation is submitted with the claim. Coverage also includes interactive examinations of patients with primary psychiatric diagnoses (e.g., Axis I DSM IV diagnoses), excluding the dementias (ICD-9-CM codes 290.0-290.9) and sleep disorders and one of the following conditions [neurotic disorders, personality disorders and other nonpsychotic mental disorders, diseases of the ear and mastoid process, or symptoms involving the head or neck].

Section 3

Psychiatric Therapeutic Services is the primary coverage section for psychotherapy services, including individual, group, and family psychotherapy. The codes covered by this section are divided by whether Evaluation and Management services are included (billable only by physicians), by treatment setting, by length of session, and for family therapy, by whether the patient is present. Coverage is not included for teaching grooming skills, monitoring activities of daily living, or recreational therapy.

For Medicare coverage, the focus of family therapy must be the treatment of the patient's condition. Examples of covered purposes include observing and correcting the patient's interaction with family members and assisting family members in the management of the patient. Family therapy is generally not covered if directed to the effects of the patient's condition on the family. Similarly to individual psychotherapy, group therapy is not covered if its purpose is socialization, recreational activities, art, music, excursions, or cognitive or sensory stimulation.

For some states, psychoanalysis is specifically addressed in Section 3; coverage is limited to trained practitioners and to a small range of disorders, emphasizing depression, anxiety, panic, hysteria, and phobias.

The following limitation applies to all types of therapy provided for in Section 3:

Psychotherapy services are not covered when documentation indicates that Dementia (ICD-9 codes 290.0, 290.20-290.9, 331.0-331.2) has produced a severe enough cognitive defect to prevent psychotherapy to be effective. . . In such cases, rehabilitative, evaluation and management (E/M) codes or pharmacologic management codes should be reported.

The language of this exclusion varies slightly between policies, with some policies emphasizing that the cognitive deficit prevents establishment of a relationship with the therapist. Policies also differ in whether they list ICD codes 331.0-331.2 (Alzheimer's Disease, Pick's Disease, and Senile Degeneration of Brain) in the limitation.

Section 4

Psychiatric Somatotherapy pertains to medication management and is reserved at this time for billing by physicians.

Section 5

Other Psychiatric Therapy provides limited coverage for other modes of psychotherapy, such as biofeedback and hypnosis. Biofeedback is not covered for mental illness under Medicare, and hypnotherapy is covered for a limited range of disorders (conversion disorders, psychogenic amnesia, psychogenic fugue, multiple personality, dissociative disorder or reaction, phobias, stress disorders, psychogenic pain).

Section 6

Central Nervous System Assessments/Tests provides coverage for psychological and neuropsychological testing. A typical description of psychological testing states that "Code 96100* includes the administration, interpretation and scoring of the tests mentioned in the CPT description and other medically accepted tests for evaluation of intellectual strengths, psychopathology, psychodynamics, mental health risks, insight, motivation and other factors influencing treatment and prognosis." Limitations to coverage are rooted in the concept of medical necessity; most policies state that the following situations would not give rise to medically necessary psychological testing: screening when mental illness is not suspected; standardized batteries of tests; repeat testing not required for change in diagnosis or treatment; examinations that can be completed through interview alone; and adjustment reactions to being moved to a nursing facility. [* Current Procedural Terminology @2003 American Medical Association. All Rights Reserved]

A typical description of neuropsychological testing states that "Code 96117* describes testing that is intended to diagnose and characterize the neurocognitive effects of medical disorders that impinge directly or indirectly on the brain." Covered purposes of testing include detection of neurologic disease; differential diagnosis between psychogenic and neurogenic syndromes; delineation of the neurocognitive effects of central nervous system disorders; monitoring of recovery of progression of central nervous system disorders; and formulation of rehabilitation or management strategies. [* Current Procedural Terminology @2003 American Medical Association. All Rights Reserved]

The Primary Parties in LMRP Development

The primary parties in LMRP development are the Contract Medical Director (CMD) and the Carrier Advisory Committee (CAC) of each insurance contractor. The CMD has primary responsibility for developing the LMRP and submitting it to the CAC. The CAC is a committee established by the contractor and the primary forum for development and discussion of proposed LMRPs.

Prior to January 2001, in most cases, the CMD and the CAC developed LMRPs with limited review by CMS and none or little provider and public input. However at that time, a program memorandum was issued instructing contractors "to establish an open and public process for the development of LMRPs - providing more notice and opportunity for providers, physicians, suppliers and other interested parties to have input into the policies." Part III of this toolkit provides the tools you need will to have input into the process.

Carrier Medical Director (CMD) Facts:

Carrier Advisory Committee (CAC) Facts:

Source: APA Online



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