Medicare Documentation Recommendations

  • Demonstrate Medical Necessity:  Follow criteria established by Centers for Medicare and Medicaid Services (CMS).
  • The Social Security Act states that “no Medicare payment shall be made for items or services that are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”  Read more in the Medicare Benefit Policy Manual.
  • Medically necessary services or items are:
    • appropriate for the symptoms and diagnosis or treatment of the patient’s condition, illness, disease or injury; and
    • provided for the diagnosis or the direct care of the patient’s condition, illness, disease or injury; and
    • in accordance with current standards of good medical practice; and
    • not primarily for the convenience of the patient or provider; and
    • the most appropriate supply or level of service that can be safely provided to the patient
  • Michael K. Rosenberg, MD, Michigan Carrier Medical Director, stated that, functionally, medical necessity means that the service is reimbursable “under this defined benefit, for this diagnosis at this time.   A given procedure may become medically necessary, for a given diagnosis, at future time, and vice versa…  It is important to remember that the phrase is not a value judgment regarding the provider’s diagnostic acumen, therapeutic decisions, and/or services.”
  • Document that treatment is either improving functioning or at least preventing deterioration of the condition.


  • Elements to include in every treatment note:
    • Diagnosis (DSM code and title)
    • Start and Stop times
    • Signature that is consistent across notes
    • Legibility (best to type if you can)
    • Type of treatment provided (e.g., CBT, IPT, and the specific interventions provided, e.g., relaxation training, cognitive reframing, etc)
    • Patient response to treatment (e.g., “Patient responded well to cognitive behavioral techniques as evidenced by a reduction in negative self statements.  Patient’s mood was elevated by the end of the session and patient was interactive during the entire session.”)
    • Patient capacity to benefit from psychotherapy (e.g., “patient has the capacity to benefit from psychotherapy as evidenced by utilization of compensatory strategies to complete homework, and employ and benefit from cognitive techniques outside of session. ” OR “patient was able to participate effectively in the session,” OR “Based on patient’s level of motivation and insight she remains a good candidate to benefit from cognitive therapy.”)  This is particularly important to document if the patient has cognitive impairment.


  • Length of Note is not important; Quality is most important


  • Each note must stand on its own! (e.g., write in each note, “Next session scheduled for ___ will focus on the short term goal of __.  The long term goal of __ remains appropriate and patient is making progress toward this goal.”)


  • Treatment plans are required for some MACs – check your LCD!  Treatment plans are definitely recommended, even if not required.
    •  Incorporate symptoms consistent with the diagnosis or diagnoses: e.g., “Patient exhibited signs consistent with the diagnoses for panic disorder with agoraphobia and dysthymic disorder including restlessness, inability to concentrate or remember and muscle tension.”
    • Include an estimate of number of sessions: e.g., “10-15 sessions then re-evaluate”
    • Include an estimate as to the frequency of sessions
    • Include short and long term goals for treatment
    • Include some method of measuring goals
  • Goals and Progress:  Should be well-defined; can utilize self-report measure scores as one way of measuring progress toward goals; make goals reasonable; use behavioral objectives whenever possible; always relate improvement to the treatment plan; keep goals consistent with primary diagnosis
  • Prolonged periods of psychotherapy must be well supported in the clinical record describing the necessity for ongoing treatment

See also the Medicare page of our Policy & Advocacy section.