Can You Enroll in Medicare as a Mental Health Counselor? The Three-Part Test

For most of Medicare's history, a licensed professional counselor could not bill it. Beneficiaries who wanted counseling had to find a psychologist, a psychiatrist or a clinical social worker. Section 4121 of the Consolidated Appropriations Act, 2023 changed that, and since January 1, 2024, counselors have been able to enroll and bill Medicare Part B directly under a provider type CMS calls Mental Health Counselor, or MHC.

The name trips people up. Very few states license anyone as a "Mental Health Counselor" by that exact title. CMS does not care what your state calls you, as long as you meet the definition.

What does the definition require?

CMS's provider enrollment FAQ for MFTs and MHCs (May 2024) sets out three requirements. You must:

1. Hold a master's or doctor's degree that qualifies for licensure or certification as a mental health counselor, clinical professional counselor or professional counselor under the law of the state where you furnish services.
2. Have performed at least 2 years or 3,000 hours of post-master's clinical supervised experience in mental health counseling, in an appropriate setting such as a hospital, skilled nursing facility, private practice or clinic.
3. Be licensed or certified as a mental health counselor, clinical professional counselor or professional counselor by the state where you perform services.

All three, together. Missing any one of them ends the analysis.

Does my state title count?

Almost certainly, if you hold your state's independent counseling license. The FAQ says individuals who meet all the qualifications "even though they may be licensed or certified by their state under a different title to furnish mental health counseling" may enroll as an MHC. An LPC in Texas, an LMHC in New York, an LCPC in Illinois, an LPCC in California and an LCMHC in North Carolina all fit, provided the degree and experience prongs are met.

CMS's FAQ cites 42 CFR 410.54(a)(3), which lists addiction counselors and alcohol and drug counselors among the licenses that can qualify. That is real, but read the condition: they must meet every MHC requirement, including the master's degree and the post-master's supervised experience. A master's-level licensed addiction counselor with the hours may qualify. A credential that requires only a bachelor's degree does not satisfy the degree requirement, however long the holder has practiced.

How does the 3,000-hour requirement play out?

Here is where most fully licensed counselors can relax. CMS says that if your state requires supervised clinical experience to become fully licensed, "no additional action is necessary"; the Medicare Administrative Contractor validates your license and treats the experience as established.

If your license did not require that experience, for instance because you were licensed under older rules or by a route that did not count supervised hours, you submit documentation with the application. CMS describes two acceptable forms:

• A statement on the letterhead of the hospital, clinic or other setting where you worked, signed by your supervisor, a department head or the organization's authorized official, confirming you performed services there for the required period. Email is not acceptable.
• A statement on letterhead from the state licensing or credentialing body, or from a national credentialing organization, confirming you meet the year or hour requirement.

If you are pulling together old supervision records for this, the same problems come up as with a license application. Our post on documenting hours when your supervisor is gone applies here too.

Who does not qualify yet?

Associates and pre-licensed counselors. An LPC-Associate, LMHC limited permit holder, LGPC or similar is still accruing supervised experience and is not licensed as a professional counselor at the independent level. Wait until the license upgrade comes through, then enroll. Our post on the associate-to-independent upgrade covers the timing.

Counselors licensed in a different state from the client. Licensure is required in the state where services are performed. A Georgia LPC cannot enroll to serve beneficiaries located in Alabama without authorization to practice in Alabama. CMS also requires a separate enrollment in each state where you render services. See Medicare across state lines.

School counselors and others whose credential is not a clinical counseling license. The test is the definition, not the job title.

What does Medicare pay, and for what?

MHC services are paid at 75 percent of the clinical psychologist amount under the physician fee schedule. The fee schedule varies by locality, so look up the psychotherapy codes you bill most often on CMS's fee schedule lookup and apply the 75 percent before deciding how much of your caseload to open.

Two further details matter. First, CMS instructed its contractors in 2023 to add MFTs and MHCs to the list of practitioners who must accept assignment, so you take the Medicare-allowed amount as payment in full apart from the beneficiary's deductible and coinsurance. Second, the statutory definition of MHC services excludes services furnished to a hospital inpatient. Outpatient, office, home and telehealth work is where counselors bill.

The FAQ also confirms MHC services are covered in rural health clinics and federally qualified health centers, are excluded from skilled nursing facility consolidated billing so you can bill them separately, and that a hospice interdisciplinary team may include an MHC in place of a social worker.

The next decision

Eligibility is the first question. The second is whether to enroll, opt out, or simply not see Medicare beneficiaries, and that one has consequences that last two years. Read opt out versus enroll before you file anything, then the PECOS and CMS-855I walkthrough.

Marriage and family therapists qualify under a parallel definition with the same start date; White Glove MFT covers that side in Medicare enrollment for MFTs. If you would rather hand the enrollment to someone, our sister company White Glove Credentialing handles Medicare enrollment. We stay on the licensing side, which is the part Medicare checks first.