Mental Health IOP and PHP Billing

Medtransic bills insurance for mental health intensive outpatient (IOP) and partial hospitalization (PHP) programs run by hospital outpatient departments, community mental health centers and clinics. We verify benefits, get authorizations, keep the recertification and concurrent review calendar, and send and follow up on program and clinician claims inside your existing system. Billing is 4-8% of what we collect for you, credentialing is $150 per application, per provider, and there is no long-term contract.

Last reviewed 2026-10-04.

Where mental health day programs lose payment

Most unpaid program days trace back to a date, a document or a setup choice, not to the care itself.

  1. A recertification that came due and passed

    Medicare wants the first PHP recertification by the 18th day, then at least every 30 days. IOP needs one at least every 60 days. Days after a missed date have no signed support behind them.

  2. A recertification that does not say what the rule asks

    A PHP recertification must state that the patient would otherwise need inpatient psychiatric care. It must also describe the response to treatment, the symptoms that keep the patient at risk, and the goals for discharge. A one-line signature does not cover it.

  3. Program days past the authorization

    Commercial plans approve a set period and review it again before approving more. If the review is not sent in time, the program keeps treating while payment stops.

  4. Clinician time billed twice, or not at all

    Under Medicare, the program's social workers, counselors and family therapists are paid through the daily rate, not under their own numbers. Physicians, nurse practitioners, physician assistants and psychologists bill their services separately, so a mix-up means duplicate claims or lost professional fees.

  5. Charging for parts of the day Medicare does not cover

    Medicare generally does not pay for meals, transportation, recreational activities or training for a specific job. Leave them off the program claim.

What we handle, and what your clinical team keeps

What we run

What stays with you

Your EHR shows what you billed. Your portal shows what we are doing about it.

Your EHR or practice management system runs your practice, but it does not show you our work. The Medtransic HIPAA Compliant Portal does: every claim and its current stage, the denials we are working, your A/R by age, each payer application and its in-network date, and the documents we still need from you. It is the same record our team works from, and it comes with every client account.

Did that claim get paid?

Every claim with its stage and amount, the denials we're working, and your receivables by age.

Where is my application with Aetna?

Each payer application shows its stage, its history, and the date you can start seeing that payer's patients.

What do you still need from me?

One list of the documents we're waiting on. Upload once, and it reaches every payer that asked for it.

It works in any browser, on your desk or your phone. iPhone and Android apps are coming soon. See the client portal.

PHP and IOP under Medicare: how the two programs differ

Medicare added an intensive outpatient benefit on January 1, 2024. It covers both mental health and substance use programs, but the rules for IOP and PHP are not the same.

Who each program is for. PHP replaces inpatient care. It is for patients leaving an inpatient stay, or at real risk of one. IOP is not meant for patients who otherwise need an inpatient level of care.

Hours a week. PHP patients must need at least 20 hours a week of therapeutic services. IOP patients must need at least 9. The plan of care has to show it.

What every patient must meet. For both programs, the patient has a mental health or substance use diagnosis and does not need 24-hour care. The patient also has enough support outside the program and is not judged dangerous to self or others.

Certification and the recertification clock. - PHP: a physician certifies that the patient needs 20 or more hours a week and would otherwise need inpatient psychiatric care. - PHP recertification: first by the 18th day, then at least every 30 days, signed by a treating physician. - IOP recertification: at least every 60 days, restating the need for at least 9 hours a week.

A written plan for each patient. A physician sets up and reviews an individual plan with the program staff. It states the diagnosis, the type, amount, length and frequency of services, and the treatment goals. In opioid treatment programs only, NPs, PAs, psychologists, social workers, counselors and family therapists may also certify IOP and write the plan where state law allows.

Where Medicare pays for each program. - PHP: hospital outpatient departments and community mental health centers only. - IOP: hospitals, critical access hospitals, community mental health centers, federally qualified health centers, rural health clinics and opioid treatment programs. - In a health center or rural clinic, group therapy for an IOP patient is paid only inside the IOP payment, not as a clinic visit.

How the program is paid. Medicare pays these programs a daily rate, and the rate is higher on days with four or more services. A program day can include individual and group therapy, occupational therapy, psychiatric nursing, social work, family counseling aimed at the patient's condition, patient education and individual activity therapies that are not mainly recreational.

How the claim differs from substance use IOP. Both are billed on the facility claim at a daily rate. The service lines, and the diagnosis that supports them, differ between mental health and substance use programs, so we set up each program's claims separately and check them against the payer's rules.

Getting the program and its clinicians ready to bill

A program bills in two layers: the program itself, and the clinicians who bill on top of the daily rate. Both have to be set up before the first patient day.

  1. Confirm the setting can bill the program

    Medicare pays PHP only through hospital outpatient departments and community mental health centers, and IOP through a few more settings. A community mental health center must also provide 24-hour emergency care and outpatient services, and at least 40% of its services must go to people who are not Medicare beneficiaries.

  2. Program applications with each payer

    We file and follow the program's applications with each payer you plan to bill, and match each plan's terms for IOP and PHP.

  3. Clinicians who bill separately

    Physicians, nurse practitioners, physician assistants and psychologists bill their own services outside the daily rate, so each is credentialed individually. We complete each application and track it to approval.

  4. Effective dates in your client portal

    Every application, its stage and its effective date sit in your client portal, included with every client account.

Credentialing is $150 per application, per provider. In our experience it usually takes 60 to 90 days with each payer.

How commercial plans decide on IOP and PHP

LOCUS and CALOCUS-CASII for mental health

For mental health, Optum, Aetna and Evernorth use LOCUS for adults and CALOCUS-CASII for children and teens, not the ASAM levels used for substance use. Optum does this for most of its commercial and Medicaid members. Aetna and Evernorth set the adult tool at age 19 and up and the child tool at ages 6 to 18.

Younger children

Optum and Aetna use ECSII for young children. Aetna applies it from birth through age 5.

Why plans moved to these tools

Aetna replaced its own level of care tool with LOCUS and CALOCUS. Evernorth ties its use of these tools to state laws in California, New York and Colorado.

Concurrent review

Plans authorize a set period of program days and review it again before approving more. We keep the review dates on a calendar so your team sends updates before the approved days run out.

What Medicare patients may owe

Medicare PHP patients may owe a daily coinsurance for the program, plus coinsurance on each professional's service. We check this before the first day so the patient knows.

When we are not the right fit

If your practice is not a hospital outpatient department, community mental health center, federally qualified health center, rural health clinic, critical access hospital or opioid treatment program, Medicare will not pay it for program days. We can still bill your outpatient therapy and psychiatry; see our mental health billing page.

If you need someone to make level of care decisions or write certifications, that is clinical work your physicians keep. We track the dates and the payer rules around it.

If your program treats substance use only, our substance use treatment page covers those levels of care.

Questions mental health IOP and PHP programs ask us

Can a private group practice bill Medicare for IOP or PHP?

Medicare pays PHP only through hospital outpatient departments and community mental health centers. IOP can also be billed by critical access hospitals, federally qualified health centers, rural health clinics and opioid treatment programs. A practice outside these settings cannot bill Medicare for program days.

How often must the physician recertify?

For PHP, the first recertification is due by the 18th day, then at least every 30 days. For IOP, at least every 60 days.

Do the therapists in the program bill separately?

Not to Medicare in a hospital outpatient department or community mental health center. Their program work is paid through the daily rate. Physicians, NPs, PAs and psychologists bill their own services separately.

When did Medicare start covering IOP?

January 1, 2024. CMS set it up in the 2024 hospital outpatient payment rule, as the Consolidated Appropriations Act, 2023 required.

What do commercial plans use to approve program days?

Optum, Aetna and Evernorth use LOCUS for adults and CALOCUS-CASII for children and teens. They approve a set period, then review again before approving more.

Which systems do you work in, and what does it cost?

We work inside your existing system, including Qualifacts, SimplePractice and TherapyNotes. Billing is 4-8% of what we collect for you, with no long-term contract. The revenue audit before you sign is free.

Sources

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