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Mental health intensive outpatient and partial hospitalization programs

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.

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The PHP recertification clock

Illustrative
Wk 11234567Wk 2891011121314Wk 315161718192021

Day 18: first recertification dueDays 1 to 17 of the PHP stay

Medicare wants the first PHP recertification by the 18th day, then at least every 30 days.
Billing
4-8%
of what we collect for you
Credentialing
$150
per application, per provider
Contract
None
no long-term contract
Software
Qualifacts
or the system you already use

Where mental health day programs lose payment

Most unpaid program days trace back to a date, a document or a setup choice.

1

A recertification date that passed

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

2

A recertification missing what the rule asks

A PHP recertification must state that the patient would otherwise need inpatient psychiatric care. It must also cover response to treatment, symptoms that keep the patient at risk, and discharge goals.

3

Program days past the authorization

Commercial plans approve a set period and review it before approving more. Miss the review and the program keeps treating while payment stops.

4

Clinician time billed twice, or not at all

Under Medicare, program social workers, counselors and family therapists are paid through the daily rate. Physicians, NPs, PAs and psychologists bill separately, so a mix-up means duplicate claims or lost fees.

5

Billing for parts 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

Medtransic runs

  • Benefits checks for IOP or PHP before the first program day
  • Initial authorizations and the concurrent review calendar
  • Certification and recertification due dates for each patient, on a calendar
  • Program claims, plus separate claims for physicians, NPs, PAs and psychologists
  • Payment posting, denials, appeals and A/R follow-up
  • Credentialing for the clinicians who bill under their own names

Your practice keeps

  • Admission decisions, level of care and the plan of care
  • Physician certifications, recertifications and progress notes
  • The clinical information reviewers ask for
  • Your EHR, your licenses and your program staff

PHP and IOP under Medicare: how the two programs differ

Medicare added an intensive outpatient benefit on January 1, 2024. The rules for IOP and PHP are not the same.

  1. 01

    Who it is for

    PHP
    Replaces inpatient care: patients leaving an inpatient stay, or at real risk of one
    IOP
    Not for patients who otherwise need an inpatient level of care
  2. 02

    Hours a week the patient needs

    PHP
    At least 20
    IOP
    At least 9
  3. 03

    Recertification

    PHP
    First by the 18th day, then at least every 30 days, signed by a treating physician
    IOP
    At least every 60 days, restating the need for at least 9 hours a week
  4. 04

    Where Medicare pays

    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
  5. 05

    Every patient

    PHP
    A mental health or substance use diagnosis, no need for 24-hour care, enough outside support, not dangerous to self or others
    IOP
    The same
  6. 06

    How it is paid

    PHP
    A daily rate, higher on days with four or more services
    IOP
    The same

Getting the program and its clinicians ready to bill

A program bills in two layers: the program, then the clinicians who bill on top of the daily rate.

Confirm the setting can bill

Medicare pays PHP only through hospital outpatient departments and community mental health centers, and IOP through a few more settings.

Check community mental health center rules

A center must also provide 24-hour emergency care and outpatient services, with at least 40% of its services to people not on Medicare.

Program applications with each payer

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

Clinicians who bill separately

Physicians, NPs, PAs and psychologists bill outside the daily rate, so we credential each one and track it to approval.

Effective dates in your portal

Every application, its stage and its effective date sit in your client portal.

How commercial plans decide on IOP and PHP

For mental health, these plans use the tools below, not ASAM levels, and review approved days before approving more.

How commercial plans decide on IOP and PHP
PayerWhat it uses or asksNote
OptumLOCUS for adults, CALOCUS-CASII for children and teens, ECSII for young childrenFor most of its commercial and Medicaid members
AetnaLOCUS from age 19, CALOCUS-CASII for ages 6 to 18, ECSII from birth through age 5Replaced its own level of care tool with LOCUS and CALOCUS
EvernorthLOCUS from age 19, CALOCUS-CASII for ages 6 to 18Ties its use of these tools to state laws in California, New York and Colorado
Medicare (PHP)Patients may owe a daily coinsurance for the program, plus coinsurance on each professional's serviceWe check this before the first day so the patient knows

Your client portal, included

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.
See the client portal →
The billing screen in the Medtransic client portal: totals billed, paid, adjusted and outstanding, a twelve-month chart and A/R by age.
The billing screen. Shown with sample data. It works in any browser, on your desk or your phone. iPhone and Android apps are coming soon.

When we are not the right fit

  • If your practice is not one of the settings Medicare pays above, Medicare will not pay it for program days. We can still bill your outpatient therapy and psychiatry; see our mental health billing page.
  • Level of care decisions and certifications are clinical work your physicians keep. We track the dates and the payer rules around them.
  • 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 consultation before you sign is free.

Keep reading

+ Sources: 12 checked 2026-10-04

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