1. (a) Limitation. For services subject to the limitation as specified in paragraph (b) of this section, the percentage of the expenses incurred for such services during a calendar year that is considered incurred expenses under Medicare Part B when determining the amount of payment and deductible under § 410.152 and § 410.160 of this part, respectively, is as follows:

   1. (1) For expenses incurred in years before 2010, 62 1/2 percent.
   2. (2) For expenses incurred in 2010 and 2011, 68 3/4 percent.
   3. (3) For expenses incurred in 2012, 75 percent.
   4. (4) For expenses incurred in 2013, 81 1/4 percent.
   5. (5) For expenses incurred in CY 2014 and subsequent years, 100 percent.

2. (b) Application of the limitation—(1) Services subject to the limitation. Except as specified in paragraph (b)(2) of this section, services furnished by physicians and other practitioners, whether furnished directly or incident to those practitioners' services, are subject to the limitation if they are furnished in connection with the treatment of a mental, psychoneurotic, or personality disorder (that is, any condition identified by a diagnosis code within the range of 290 through 319) and are furnished to an individual who is not an inpatient of a hospital:

   1. (i) Services furnished by physicians and other practitioners, whether furnished directly or as an incident to those practitioners' services.
   2. (ii) Services provided by a CORF.

   3. (2) Services not subject to the limitation. Services not subject to the limitation include the following:

      1. (i) Services furnished to a hospital inpatient.
      2. (ii) Brief office visits for the sole purpose of monitoring or changing drug prescriptions used in the treatment of mental, psychoneurotic, or personality disorders billed under HCPCS code M0064 (or its successor).
      3. (iii) Partial hospitalization services or intensive outpatient services not directly provided by a physician.
      4. (iv) Psychiatric diagnostic services billed under CPT codes 90801 and 90802 (or successor codes) and diagnostic psychological and neuropsychological tests billed under CPT code range 96101 through 96125 (or successor codes) that are performed to establish a diagnosis.
      5. (v) Medical management such as that furnished under CPT code 90862 (or its successor code), as opposed to psychotherapy, furnished to a patient diagnosed with Alzheimer's disease or a related disorder.

   4. (3) Payment amounts. The Medicare payment amount and the patient liability amounts for outpatient mental health services subject to the limitation for each year during which the limitation is phased out are as follows:

      Calendar year	Recognized incurredexpenses	Patient pays	Medicare pays
      CY 2009 and prior calendar years	62.50%	50%	50%
      CYs 2010 and 2011	68.75%	45%	55%
      CY 2012	75.00%	40%	60%
      CY 2013	81.25%	35%	65%
      CY 2014	100.00%	20%	80%

3. (c) General formula. A general formula for calculating the amount of Medicare payment and the patient liability for outpatient mental health services subject to the limitation is as follows:

   1. (1) Multiply the Medicare approved amount by the percentage of incurred expenses that is recognized as incurred expenses for Medicare payment purposes for the year involved;
   2. (2) Subtract from this amount the amount of any remaining Part B deductible for the patient and year involved; and,
   3. (3) Multiply this amount by 0.80 (80 percent) to obtain the Medicare payment amount.
   4. (4) Subtract the Medicare payment amount from the Medicare-approved amount to obtain the patient liability amount.

[63 FR 20129, Apr. 23, 1998, as amended at 73 FR 69934, Nov. 19, 2008; 74 FR 62005, Nov. 25, 2009; 88 FR 82179, Nov. 22, 2023]