Medicare Provider Enrollment for LMFTs, LPCs, and Behavioral Health Providers: What You Need to Know

Licensed Marriage and Family Therapists (LMFTs) and Licensed Professional Counselors (LPCs) can now enroll with Medicare. This is a significant change for the behavioral health field—and a critical point for all behavioral health providers: you cannot do nothing. Failing to establish a relationship with Medicare prevents you from serving Medicare clients entirely. Understanding how credentialing and provider enrollment work is the essential first step.

Three Types of Medicare Provider Relationships

Participating Providers

Participating providers accept Medicare and must always take assignment, agreeing to accept Medicare's approved amount as full payment.

Advantages:

• Streamlined billing with direct payment from Medicare
• Lower client costs (20% coinsurance only)
• Required assignment for clinical social workers

Non-Participating Providers

These providers accept Medicare but choose assignment on a case-by-case basis. They can charge up to 15% above Medicare's approved amount.

Key considerations:

• Clients may pay up to 35% total (20% coinsurance plus 15% limiting charge)
• State variations apply (New York limits charges to 5%)
• Greater billing flexibility than participating status

Opt-Out Providers

Opt-out providers reject Medicare entirely through a formal agreement and exclude themselves from the program.

Requirements:

• Clients bear full costs with no Medicare reimbursement
• Written contracts required detailing charges and cost responsibilities
• Medicare covers only emergency services

Financial Impact Summary

The provider relationship type significantly affects client out-of-pocket expenses. Participating providers offer the simplest billing and lowest client costs, while non-participating providers provide flexibility at higher expense to clients. Opt-out arrangements shift full financial responsibility to clients.

Whichever path you choose, it's worth understanding how your participation status affects your overall revenue cycle management — from eligibility verification through payment posting. Your Medicare reimbursement rates are also a factor worth examining alongside your other payer contracts and fee schedules.

Choose the approach that aligns with your practice model, but make an active, informed decision—don't let the deadline pass without acting. For broader context on what this change means for your practice, see our post on navigating the complexities of behavioral health billing.

Required Action Steps

1. Enroll with Medicare or formally opt out—inaction is not permitted
2. Understand the financial implications of your chosen relationship for your clients
3. Stay current with Medicare policy changes, which are evolving as more behavioral health provider types gain eligibility. It's also a good time to review any Medicaid payer policy updates that may affect your practice simultaneously.

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BreezyBilling and its credentialing partner, Phoenix Credentialing, offer enrollment assistance and guidance for navigating Medicare requirements. Contact us if you need help determining which path is right for your practice.