CurrentOptumPolicy BH803MAPNT062025

Psychological and Neuropsychological Testing

Medicare coverage summary for psychological and neuropsychological testing under Optum Behavioral Health Solutions, describing medical necessity indications, limitations, documentation, utilization and coding/billing guidance across applicable states per CMS LCDs and LCAs.

Policy Summary

PayerOptum

PolicyPsychological and Neuropsychological Testing

Policy CodePolicy BH803MAPNT062025

Change TypeAnnual Review / Interim Update

Effective Date

Next Review Date

Key ActionMaintain legible, signed medical record documenting diagnosis/suspected diagnosis, reason for referral, tests administered, scoring/interpretation, time involved, prior tests and efforts to obtain them, and treatment recommendations; provide report to referring provider and make records available to Medicare Contractor upon request.

POLICY UPDATE CHANGES

June 17, 2025 Annual Review.

July 16, 2024 Annual Review.

December 12, 2023 Interim Update: Added language to Introduction & Instructions for Use per CMS Final Rule 2024 requirements and updated References.

June 20, 2023 Annual Review.

13Medically Necessary Indications Listed

12Limitations / Not Covered Scenarios

18CPT Codes Referenced

Coverage Summary

This coverage summary describes Optum's application of CMS Local Coverage Determinations and Local Coverage Articles (notably L34646, L34520, A57481, A57780) together with the American Psychological Association (APA) 2024 Billing and Coding Guide to standardize coverage determinations for psychological and neuropsychological testing for Medicare beneficiaries under Optum managed plans. It operationalizes Medicare LCD/LCA requirements for medical necessity, documentation, coding, and billing within Optum Behavioral Health Solutions.

Scope: Medicare coverage summary for psychological and neuropsychological testing under Optum Behavioral Health Solutions, detailing medical necessity indications, limitations/not-covered scenarios, documentation and utilization requirements, and coding/billing guidance across applicable states per the referenced CMS LCDs/LCAs and the APA guide.

Testing Time Thresholds

Minimum time to report per-hour code>= 31 minutes

Testing time requiring justification> 8 hours

Typical testing duration4-8 hours (combine across days and report on last day)

Medical-Necessity Criteria

Medically Necessary Indications (Neuropsychological Testing)

Neuropsychological assessment is considered medically necessary when ANY of the following indications apply:

ANY of the following

Mild or questionable deficits on standard mental status testing or clinical interview requiring assessment to establish presence of abnormalities or distinguish from normal aging or other disease progression.
Neuropsychological data combined with clinical, laboratory, or neuroimaging data to assist establishing a clinical diagnosis in neurological or systemic conditions known to affect CNS functioning.
Need to quantify cognitive or behavioral deficits related to CNS impairment where information will inform prognosis or treatment planning (determine rate of disease progression).
Pre-surgical or treatment-related cognitive evaluation needed to determine safety of proceeding with procedures that may affect brain function (e.g., DBS, tumor resection, epilepsy surgery, stem cell transplant) or significantly alter functional status.
Assess potential impact of therapeutic substances that may cause cognitive impairment (e.g., radiation, chemotherapy, antiepileptic medications) when used to inform treatment planning.
Monitor progression, recovery, or response to changing treatments in patients with CNS disorders to establish plan of care.
Objective measurement of subjective complaints about memory, attention, or other cognitive dysfunction to differentiate psychogenic from neurogenic syndromes (e.g., dementia vs. depression).
Establish treatment plan by determining functional abilities/impairments in known or suspected CNS disorders (including capacity for decision-making, work, independent living, financial management).
Design, administer, and/or monitor outcomes of cognitive rehabilitation procedures (e.g., compensatory memory training).
Establish treatment planning through identification and assessment of neurocognitive sequelae of systemic disease (e.g., hepatic encephalopathy, anoxic/hypoxic injury).
Assessment of neurocognitive functions for formulation of rehabilitation/management strategies among individuals with neuropsychiatric disorders.
Diagnosis of cognitive or functional deficits in children/adolescents based on inability to develop expected knowledge, skills or abilities.

Medically Necessary Indications (Psychological Testing)

Psychological testing is considered medically necessary when ANY of the following apply:

ANY of the following

Assist with diagnosis and management following clinical evaluation when mental illness or psychological abnormality is suspected.
Provide differential diagnosis among neurological/psychological disorders with similar presentations (e.g., pseudodementia vs. depression).
Determine clinical and functional significance of a brain abnormality.
Delineate specific cognitive basis of functional complaints.
Assess capacity/ability to comprehend and participate in complex treatment regimens or determine functional capacity for healthcare decision-making, independent living, etc.

Limitations / Not Medically Necessary

Psychological and neuropsychological testing is NOT reasonable and necessary when ANY of the following apply:

ANY of the following

Patient is not neurologically and cognitively able to participate in a meaningful way in the testing process.
Testing is used as a screening test for individuals or general populations (screening-only purposes).
Administered for educational or vocational purposes that do not establish medical management.
Performed when abnormalities of brain or emotional function are not suspected.
Used for self-administered or self-scored inventories or screening tests of cognitive function (e.g., AIMS, Folstein MMSE) as separate reimbursable services.

Documentation, Test Administration & Personnel

Documentation and Utilization Requirements

All of the following documentation requirements must be met:

ALL of the following

Medical record and assessment report must document diagnosis and treatment recommendations.
Documentation must support medical necessity: relevant medical history, physical exam, results of pertinent diagnostic tests/procedures, suspected mental illness or CNS dysfunction, initial evaluation determining need for testing, types of testing indicated, time involved, whether initial or follow-up, previous testing and efforts to obtain prior results, tests administered, scoring/interpretation, treatment recommendations.
Documentation must be legible, signed, maintained in patient's medical record and available to Medicare Contractor upon request.
If total testing time exceeds eight (8) hours, medical necessity for extended testing must be documented in the report and may be requested.
Administration must result in a report provided to the referring provider.

Test Administration and Personnel

ALL of the following

Tests should be administered, scored, and interpreted by a trained professional (clinical psychologist, psychologist, APRN with education in this area, or PA who works with psychiatrist with expertise), or by a technician under direct supervision of provider.
Technician-administered tests must be directly supervised by the provider.
Computerized test administration is acceptable as part of testing; time for testing over several days should be combined and reported on last day of service.

Documentation Required

Document medical necessity and testing details

Maintain a legible, signed medical record that documents diagnosis or suspected diagnosis, reason for referral, tests administered, scoring and interpretation, time involved, whether initial or follow-up, prior testing and efforts to obtain prior results, and treatment recommendations. Provide a written report to the referring provider and make records available to the Medicare Contractor upon request.

Document diagnosis or suspected diagnosis and reason for referral
List tests administered, scoring, interpretation, and time involved
Indicate whether testing is initial or follow-up and prior test efforts
Provide treatment recommendations and a report to the referring provider
Maintain legible, signed records and make available to Medicare Contractor on request

Billing Rule

Time reporting and aggregation

Report time using per-hour codes only when at least 31 minutes of time are provided. When testing occurs over multiple days, combine total testing time and report the combined time on the last date of service.

Affected codes: 96136, 96137, 96138, 96139, 96146, 96116, 96121
A minimum of 31 minutes is required to report any per-hour code
If testing spans several days, sum all testing time and report on the last service date

Billing Rule

Provider enrollment and licensure

Ensure the practitioner providing testing has a Medicare provider number and is appropriately licensed in the state where services are performed. Non-physician providers (e.g., clinical psychologists, NPs, PAs) may provide services when within their scope of practice and state law.

Documentation Required

Extended testing justification

If total testing time for an evaluation exceeds eight (8) hours, document the medical necessity for extended testing time in the report; the Medicare contractor may request that report to justify the extended testing.

Threshold: testing time > 8 hours requires documented justification in the report
Contractor may request the report showing medical necessity for extended testing

Denial Risk

Non-covered scenarios

Do not expect coverage when testing is used solely for screening, educational or vocational purposes, self-administered or self-scored inventories, repeated testing without medical necessity, when the patient cannot participate meaningfully, or testing solely as Alzheimer's screening after diagnosis; such claims risk denial.

Examples: screening-only tests, educational/vocational testing without medical management impact
Self-administered/self-scored inventories (e.g., AIMS, Folstein MMSE) billed separately
Repeated testing not required for medical decision-making
Testing when patient cannot meaningfully participate
Testing solely to screen for Alzheimer's disease after diagnosis

Billing Rule

Reporting non-covered services

Do not bill Medicare for non-covered services as if they are covered. When billing for non-covered services, report them using the appropriate modifier as directed by CMS guidance.

Coding

Covered CPT / HCPCS Codes for Psychological & Neuropsychological TestingCPTCovered

96105	Assessment of aphasia (per document: for assessment of aphasia)
96125	Assessment of cognitive performance (per document: cognitive performance testing)
96110	Developmental screening (per document)
96112	Developmental testing (per document)
96113	Developmental testing (per document)
96127	Brief emotional/behavioral assessment (per document)
96116	Neurobehavioral status exam (includes administration, scoring, interpretation, and report)
96121	Neurobehavioral status exam (alternate code listed)
96136	Test administration and scoring (psych/neuropsych) - performed by professional
96137	Test administration and scoring (psych/neuropsych) - performed by professional

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Coding and billing guidance requires aggregation of testing time when services occur over multiple days: combine total time and report it on the last date of service, and a minimum of 31 minutes is required to report any per-hour code. Technician-administered testing is allowable but must be performed under the direct supervision of the clinician; professional versus technician codes are specified (e.g., 96136/96137 for professional administration/scoring, 96138/96139 for technician-administered/scored tests).

Background & Definitions

Background/context: Optum Medicare Coverage Summaries are evidence-based criteria used to standardize coverage determinations and align with federal and state regulatory requirements. For psychological and neuropsychological testing, Optum applies CMS LCDs/LCAs and, when needed, consults the APA 2024 Billing and Coding Guide and Optum supplemental criteria to address gaps or state variations.

Medicare alignment: Applicable CMS determinations (L34646, L34520, A57481, A57780) define indications, limitations, documentation, and coding requirements that Optum incorporates into its clinical and administrative processes to ensure consistent application of medical necessity and billing practices across applicable states and services.

Neurobehavioral Status Exam: Clinical assessment including interview, collateral information, and review of records across domains (thinking, memory, attention, language, visual-spatial abilities) completed prior to neuropsychological testing; alone insufficient to diagnose mild cognitive impairment.

Psychological Test: An instrument to measure latent constructs (e.g., cognition, personality) that must be valid and reliable and typically administered, scored, and interpreted by a trained professional.

Technician: A trained individual who may administer neuropsychological tests under the direct supervision of a qualified provider; technician-administered services must be overseen by the performing clinician.

Primary authoritative sources: CMS L34646 (2024), CMS A57481 (2024), CMS A57780 (2024), CMS L34520 (2020), and the American Psychological Association (APA) 2024 Psychological and Neuropsychological Testing Billing and Coding Guide.

Number	Title	Effective / Type
L34646	Psychological and Neuropsychological Testing	2024 / LCD
L34520	Psychological and Neuropsychological Tests	2020 / LCD
A57780 / A57481	Billing and Coding: Psychological and Neuropsychological Testing	2024 / NCD

OpenPayer

Psychological and Neuropsychological Testing

Coverage Summary

Medical-Necessity Criteria

Documentation, Test Administration & Personnel

Coding

Background & Definitions

Medicare Determinations

Revision History