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December 2016 Texas Medicaid Provider Procedures Manual

Behavioral Health, Rehabilitation, and Case Management Services Handbook : 6 Physician, Psychologist, and Licensed Psychological Associate (LPA) Providers : 6.9 Pharmacological Management Services : 6.9.4 Reimbursement

The treating provider must document the medical necessity for the chosen treatment in the client’s medical record as well as the diagnosis code(s) that most accurately describes the client’s condition that necessitated the pharmacological management visit. The medical record (outpatient hospital records, reports, or progress notes) should be clear and concise, documenting the reasons for the pharmacological management treatment and the outcome.
The treating provider should use the most appropriate E/M code for the pharmacological management visit depending on the place of service and complexity of the client’s condition, along with modifier UD to designate the visit as primarily focused on pharmacological management.
Texas Medicaid does not reimburse pharmacological management for the actual administration of medication, or for observation of the client taking an oral medication.
If the primary reason for the office encounter or visit is for outpatient psychotherapy or counseling, then the specific outpatient psychotherapy or counseling procedure code must be billed.
Pharmacological management is limited to one service per day, per client, by any provider in any setting.
Texas Medicaid implemented mandated rate reductions for certain services. The OFL and static fee schedules include a column titled “Adjusted Fee” to display the individual fees with all mandated percentage reductions applied.
Additional information about rate changes is available on the TMHP website at

Texas Medicaid & Healthcare Partnership
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