As per recent reports, Medicare reimbursement rates for mental health billing are going to be decreased by approximately 14% in 2025 as compared to 2024. This is applicable in all the states of America. The big news is that the rural areas are going to get a big hit this year.
Although Alaska and certain areas of California continue to offer higher payments compared to other states, they will experience less significant reductions. Major cities such as Chicago, Miami, and Houston, known for their typically higher payment rates, will also encounter Medicare cuts of over 16% in 2025.
Before diving into the specifics for each state, let’s briefly explore some of the factors influencing Medicare payment rates for mental health therapy in 2025.
What’s Driving Medicare Mental Health Reimbursement Changes in 2025?
Medicare reimbursement rates for mental health therapy services in 2025 are influenced by several factors, including legislative changes and economic conditions.
The main factors affecting these rates are:
- Conversion Factor Adjustments
- Legislative Actions
- Economic Factors
- Medicare Advantage (MA) Plans
- Quality Payment Program (QPP)
- Inflationary Pressures
- Other factors
Let’s discuss them below:
Conversion Factor Adjustments
The conversion factor, a crucial element in Medicare’s payment framework, is set to decrease by 2.83% in 2025, dropping to $32.3465. This marks the fifth year of consecutive reductions, largely driven by the end of a temporary adjustment and a 0% baseline update, which fails to factor in inflation for practice costs.
Legislative Actions
Congress significantly influences Medicare’s payment structures. Without legislative intervention, providers, including mental health therapists, could face additional payment cuts. Legislative measures are vital for stabilizing and potentially increasing reimbursement rates for mental health services.
Economic Factors
The Medicare Economic Index (MEI) projects a 3.5% rise in service provision costs in 2025. However, due to budget neutrality rules, this increase does not result in higher reimbursement rates, placing additional financial pressure on providers.
Medicare Advantage (MA) Plans
Medicare Advantage plans are seeing an average reimbursement increase of 3.7% in 2025. This contrasts with reductions in traditional fee-for-service Medicare, highlighting the growing shift from traditional Medicare to MA plans for reimbursement.
Quality Payment Program (QPP)
The QPP influences reimbursement rates by incentivizing physicians who meet specific performance standards. Providers participating in Advanced Alternative Payment Models (APMs) may receive higher payments compared to those operating under the traditional fee-for-service system. This reflects a broader shift toward value-based care in 2025.
Inflationary Pressures
The lack of an inflation adjustment in the current reimbursement structure creates financial strain for healthcare providers. As costs continue to rise, many mental health therapy practices face increasing challenges in maintaining service delivery.
Other Factors (Less Relevant in 2025)
Reimbursement rates can also be affected by geographic variations, fee schedule areas, and differences in CPT codes. However, in 2025, the main factors driving the decline in mental health therapy reimbursements are changes in legislation, economic conditions, and the previously mentioned influences.
Medicare Reimbursement Rates for Mental Health Therapy by State and Region in 2025
The following table provides the reimbursement rates for CPT Code 90791 (Mental Health Therapy) in different states and counties across the United States, including the percentage changes from 2024 to 2025.
| State | Fee Schedule Area | Reimbursement VS National Rate | CPT Code 90791 Reimbursement Rate | Percentage Change | |
| NATIONAL | 2024 | 2025 | |||
| California | National | 100.00% | $195.46 | $166.91 | -14.63% |
| California | Santa Clara (Santa Clara County) | 115.38% | $224.26 | $192.58 | -14.12% |
| California | San Jose-Sunnyvale-Santa Clara (San Benito County) | N/A | $225.09 | N/A | N/A |
| California | San Francisco (San Francisco County) | N/A | $219.23 | N/A | N/A |
| California | San Mateo (San Mateo County) | 116.60% | $219.23 | $194.62 | -11.23% |
| California | Oakland-Berkeley (Alameda and Contra Costa) | 110.72% | $219.23 | $184.80 | -15.68% |
| California | San Francisco-Oakland-Hayward (Marin County) | 115.43% | $219.44 | $192.66 | -12.18% |
| California | Salinas (Monterey County) | 110.62% | $209.01 | $184.63 | -11.65% |
| California | Napa | 102.81% | $209.67 | $171.60 | -18.15% |
| California | Vallejo-Fairfield (Solano County) | 102.38% | $209.67 | $170.89 | -18.50% |
| California | Santa Cruz-Watsonville | 102.38% | $209.55 | $170.89 | -18.43% |
| California | Santa Rosa (Sonoma County) | 102.38% | $208.27 | $170.89 | -17.93% |
| California | Riverside-San Bernardino-Ontario (San Bernardino and Riverside County) | 102.38% | $202.15 | $170.89 | -15.45% |
| California | Bakersfield (Kern County) | 102.38% | $202.42 | $170.89 | -15.55% |
| California | Sacramento-Roseville-Arden-Arcade (Sacramento, Placer, Yolo, El Dorado) | 102.38% | $202.86 | $170.89 | -15.75% |
| California | Chico (Butte County) | 102.38% | $200.53 | $170.89 | -14.79% |
| California | Fresno | 103.03% | $200.53 | $171.97 | -14.23% |
| California | Hanford-Corcoran (Kings County) | 105.36% | $200.53 | $175.86 | -12.30% |
| California | Madera | 105.65% | $200.53 | $176.34 | -12.07% |
| California | Modesto (Stanislaus County) | 105.35% | $200.53 | $175.84 | -12.32% |
| California | Redding (Shasta County) | 106.64% | $200.53 | $177.99 | -11.24% |
| California | Stockton-Lodi (San Joaquin County) | 102.38% | $200.53 | $170.89 | -14.79% |
| California | Visalia-Porterville (Tulare County) | 102.38% | $200.53 | $170.89 | -14.79% |
| California | Yuba City (Sutter, Yuba) | 102.38% | $200.53 | $170.89 | -14.79% |
| California | California (All Other Counties) | 102.38% | $200.53 | $170.89 | -14.79% |
| California | Los Angeles-Long Beach-Anaheim (Los Angeles County) | 105.58% | $209.34 | $176.23 | -15.81% |
| California | Long Beach-Anaheim (Orange County) | 107.11% | $209.34 | $178.78 | -14.59% |
| California | Oxnard-Thousand Oaks-Ventura | N/A | $206.33 | N/A | N/A |
| California | Santa Maria-Santa Barbara | 102.41% | $207.59 | $170.93 | -17.65% |
| California | San Diego-Carlsbad | 105.77% | $206.43 | $176.54 | -14.48% |
| California | San Luis Obispo-Paso Robles-Arroyo Grande | 103.31% | $201.63 | $172.43 | -14.49% |
| California | El Centro (Imperial County) | 104.92% | $200.63 | $175.12 | -12.70% |
| California | Hawaii, Guam, American Samoa, Marshall Islands, Palau, Northern Mariana Islands, FSM | 102.67% | $201.98 | $171.37 | -15.14% |
| Nevada | Statewide | 99.69% | $197.78 | $166.40 | -15.87% |
| Alaska | Statewide | 138.33% | $271.70 | $230.89 | -15.02% |
| Idaho | Statewide | 96.78% | $187.19 | $161.53 | -13.71% |
| Oregon | Portland (Clackamas, Multnomah, and Washington) | 102.80% | $199.43 | $171.58 | -14.0% |
| Oregon | Rest of State | 98.98% | $190.93 | $165.20 | -13.5% |
| Washington | WASHINGTON SEATTLE (KING COUNTY) | 108.12% | $208.55 | $180.46 | -13.5% |
| Washington | REST OF STATE | 101.08% | $194.94 | $168.72 | -13.4% |
| Arizona | STATEWIDE | 99.13% | $192.57 | $165.45 | -14.1% |
| Montana | STATEWIDE | 99.96% | $195.36 | $166.84 | -14.6% |
| North Dakota | STATEWIDE | 99.07% | $192.88 | $165.35 | -14.3% |
| South Dakota | STATEWIDE | 98.80% | $192.50 | $164.91 | -14.3% |
| Utah | STATEWIDE | 98.28% | $190.85 | $164.04 | -14.1% |
| Wyoming | STATEWIDE | 99.49% | $194.74 | $166.06 | -14.7% |
| Colorado | STATEWIDE | 101.51% | $196.70 | $169.43 | -13.8% |
| New Mexico | STATEWIDE | 98.15% | $191.46 | $163.83 | -14.4% |
| Oklahoma | STATEWIDE | 97.06% | $189.03 | $162.00 | -14.3% |
| Texas | HOUSTON | 100.78% | $200.98 | $168.22 | -16.3% |
| Texas | GALVESTON (TARRANT COUNTY) | 100.74% | $199.26 | $168.15 | -15.6% |
| Texas | BRAZORIA | 100.76% | $199.12 | $168.18 | -15.6% |
| Texas | DALLAS | 101.91% | $197.93 | $170.09 | -14.0% |
| Texas | FORT WORTH (TARRANT COUNTY) | 97.60% | $195.47 | $162.91 | -16.7% |
| Texas | AUSTIN (TRAVIS COUNTY) | 100.58% | $196.07 | $167.88 | -14.5% |
| Texas | REST OF STATE | 100.92% | $191.52 | $168.45 | -12.0% |
| Texas | BEAUMONT (JEFFERSON COUNTY) | 98.57% | $190.86 | $164.52 | -13.8% |
| Iowa | STATEWIDE | 96.89% | $188.60 | $161.72 | -14.3% |
| Kansas | STATEWIDe | 96.88% | $188.80 | $161.71 | -14.3% |
| Missouri | METROPOLITAN ST. LOUIS (JEFFERSON, ST. CHARLES, ST. LOUIS AND ST. LOUIS CITY) | 98.85% | $193.86 | $164.99 | -14.9% |
| Missouri | METROPOLITAN KANSAS CITY (CLAY, JACKSON AND PLATTE) | 98.75% | $192.91 | $164.83 | -14.6% |
| Missouri | REST OF STATE | 96.61% | $187.91 | $161.26 | -14.2% |
| Nebraska | STATEWIDE | 96.69% | $187.78 | $161.38 | -14.1% |
| Illinois | CHICAGO (COOK COUNTY) | 99.58% | $203.03 | $166.21 | -18.2% |
| Illinois | SUBURBAN CHICAGO (DUPAGE, KANE, LAKE AND WILL) | 102.73% | $201.46 | $171.47 | -14.9% |
| Illinois | EAST ST. LOUIS (BOND, CALHOUN, CLINTON, JERSEY, MACOUPIN, MADISON, MONROE, MONTGOMERY, RANDOLPH, ST. CLAIR AND WASHINGTON) | 103.04% | $195.81 | $171.98 | -12.2% |
| Illinois | Rest of the State | 98.66% | $192.26 | $164.67 | -14.3% |
| Minnesota | Statewide | 99.23% | $193.12 | $165.63 | -14.3% |
| Wisconsin | Statewide | 97.69% | $189.62 | $163.05 | -14.0% |
| Arkansas | Statewide | 95.75% | $186.04 | $159.82 | -14.1% |
| Louisiana | NEW ORLEANS (JEFFERSON, ORLEANS, PLAQUEMINES AND ST. BERNARD) | 98.77% | $194.52 | $164.85 | -15.3% |
| Louisiana | REST OF STATE | 97.15% | $191.00 | $162.15 | -15.1% |
| Mississippi | STATEWIDE | 96.05% | $186.74 | $160.32 | -14.1% |
| Indiana | STATEWIDE | 97.15% | $188.46 | $162.16 | -14.0% |
| Michigan | DETROIT (MACOMB, OAKLAND, WASHTENAW AND WAYNE) | 101.28% | $198.15 | $169.05 | -14.7% |
| Michigan | REST OF STATE | 98.23% | $191.30 | $163.96 | -14.3% |
| Florida | MIAMI (DADE AND MONROE COUNTY) | 101.44% | $203.91 | $169.32 | -16.9% |
| Florida | FORT LAUDERDALE (BROWARD, COLLIER, INDIAN RIVER, LEE, MARTIN, PALM BEACH, AND ST. LUCIE) | 103.55% | $199.41 | $172.83 | -13.4% |
| Florida | REST OF STATE | 99.48% | $194.65 | $166.05 | -14.7% |
| Puerto Rico | PUERTO RICO | 100.13% | $195.77 | $167.13 | -14.7% |
| Virgin Islands | VIRGIN ISLANDS | 100.13% | $195.77 | $167.13 | -14.7% |
| Alabama | STATEWIDE | 96.08% | $189.98 | $160.36 | -15.7% |
| Georgia | ATLANTA (BUTTS, CHEROKEE, CLAYTON, COBB, DEKALB, DOUGLAS, FAYETTE, FORSYTH, FULTON, GWINNETT, NEWTON, ROCKDALE AND WALTON) | 100.17% | $194.94 | $167.20 | -14.3% |
| Georgia | REST OF STATE | 97.48% | $189.45 | $162.70 | -14.1% |
| Tennessee | STATEWIDE | 96.66% | $188.22 | $161.33 | -14.3% |
| South Carolina | STATEWIDE | 97.59% | $189.64 | $162.88 | -14.1% |
| Virginia | STATEWIDE | 99.29% | $194.77 | $165.73 | -14.9% |
| West Virginia | STATEWIDE | 97.38% | $189.87 | $162.54 | -14.4% |
| North Carolina | STATEWIDE | 97.60% | $191.35 | $162.90 | -14.9% |
| Delaware | STATEWIDE | 100.38% | $196.87 | $167.55 | -14.9% |
| Washington, DC | DC + MD/VA SUBURBS (DISTRICT OF COLUMBIA; ALEXANDRIA CITY, ARLINGTON, FAIRFAX, FAIRFAX CITY, FALLS CHURCH CITY IN VIRGINIA; MONTGOMERY AND PRINCE GEORGE’S IN MARYLAND) | 109.11% | $215.43 | $182.11 | -15.5% |
| Maryland | BALTIMORE/SURROUNDING COUNTIES | 103.93% | $205.34 | $173.47 | -15.5% |
| Maryland | REST OF STATE | 101.22% | $199.07 | $168.94 | -15.1% |
| New Jersey | NORTHERN NEW JERSEY (BERGEN, ESSEX, HUDSON, HUNTERDON, MIDDLESEX, MORRIS, PASSAIC, SOMERSET, SUSSEX, UNION AND WARREN) | 108.89% | $211.50 | $181.75 | -14.1% |
| New Jersey | REST OF STATE | 105.76% | $207.10 | $176.53 | -14.8% |
| Pennsylvania | METROPOLITAN PHILADELPHIA (BUCKS, CHESTER, DELAWARE, MONTGOMERY AND PHILADELPHIA) | 103.38% | $203.36 | $172.55 | -15.2% |
| Pennsylvania | REST OF STATE | 98.12% | $192.17 | $163.78 | -14.8% |
| Connecticut | STATEWIDE | 104.19% | $205.75 | $173.90 | -15.5% |
| New York | NYC SUBURBS/LONG ISLAND (BRONX, KINGS, NASSAU, RICHMOND, ROCKLAND, SUFFOLK AND WESTCHESTER) | 110.03% | $220.07 | $183.65 | -16.5% |
| New York | MANHATTAN | 111.33% | $217.56 | $185.82 | -14.6% |
| New York | POUGHKEEPSIE/N NYC SUBURBS (COLUMBIA, DELAWARE, DUTCHESS, GREENE, ORANGE, PUTNAM, SULLIVAN AND ULSTER) | 106.45% | $207.12 | $177.67 | -14.2% |
| New York | REST OF STATE | 98.27% | $192.28 | $164.03 | -14.7% |
| New York | QUEENS | 110.34% | $221.56 | $184.17 | -16.9% |
| Maine | SOUTHERN MAINE (CUMBERLAND AND YORK COUNTY) | 99.62% | $193.75 | $166.27 | -14.2% |
| Maine | REST OF STATE | 97.26% | $189.22 | $162.34 | -14.2% |
| Massachusetts | METROPOLITAN BOSTON (MIDDLESEX, NORFOLK AND SUFFOLK) | 107.58% | $211.15 | $179.56 | -14.9% |
| Massachusetts | REST OF STATE | 102.31% | $201.31 | $170.77 | -15.2% |
| New Hampshire | STATEWIDE | 100.61% | $196.83 | $167.92 | -14.7% |
| Rhode Island | STATEWIDE | 102.49% | $200.62 | $171.06 | -14.8% |
| Vermont | STATEWIDE | 98.90% | $193.55 | $165.07 | -14.8% |
| Kentucky | STATEWIDE | 96.92% | $188.69 | $161.77 | -14.3% |
| Ohio | STATEWIDE | 97.96% | $191.91 | $163.50 | -14.8% |
Key Observations on Medicare Reimbursement Rates Across States
Here are the main trends influencing these rates:
- The national reimbursement rate for CPT Code 90791 decreases from $195.46 in 2024 to $166.91 in 2025, reflecting a -14.63% reduction.
- This national decrease is generally consistent across most states, though some areas may experience variations due to local factors.
- In regions like Alaska and select counties in California, reimbursements for mental health therapy remain slightly higher than the national average, though they still face similar percentage reductions.
- Major metropolitan areas, such as Chicago, Miami, and Houston, typically offer higher reimbursement rates but are also subject to substantial cuts, with some seeing declines exceeding 16%.
Disparate Impacts of Medicare Reimbursement Cuts
Medicare’s 2025 reimbursement cuts will not impact all providers the same way, with differences emerging based on location, state resources, and telehealth policies.
Impact on Rural vs. Urban Providers
The 14% reduction in Medicare reimbursement rates for mental health services in 2025 is expected to affect rural and urban providers differently. Rural areas, which often have fewer healthcare resources, may experience more significant financial strain due to these cuts. Urban centers, while also facing reductions, might have more diversified revenue streams to mitigate the impact. Understanding these disparities is crucial for mental health providers to develop strategies tailored to their specific settings.
State-Specific Resources
Mental health providers should explore state-specific resources to handle the reimbursement changes effectively. Some states offer supplemental funding, grants, or other support mechanisms to assist mental health practices during such transitions. For instance, certain states have proposed increasing Medicare rebates for longer consultations and additional incentives for rural and remote areas to reduce the financial burden on providers.
Telehealth and Medicare Reimbursement
The expansion of telehealth services has become a vital component of mental health care delivery. Medicare has extended coverage for telehealth services, allowing patients to receive care at home through March 31, 2025. Starting April 1, 2025, most telehealth services will require patients to be in an office or medical facility located in a rural area. However, certain telehealth services, including mental and behavioral health, can still be provided to patients at home without geographic restrictions. Providers should stay informed about these policy changes to optimize service delivery and reimbursement.
How Mental Health Providers Can Adapt to Medicare Cuts
Here’s what you should do:
- Maximize Reimbursements with Smart Billing
Make sure every claim is coded correctly to avoid missing out on payments. Medicare rules change often, so staying updated can prevent costly errors and denials.
- Use Telehealth Where It Still Pays
Medicare will keep covering some telehealth services, especially for mental health. Continue offering virtual visits where possible, and prepare patients for new location rules starting in April 2025.
- Look for State Funding and Support
Some states offer grants or higher reimbursements for longer visits and care in rural areas. Check with local health agencies and professional groups for financial assistance programs.
- Expand Beyond Medicare
If possible, take on more private insurance, Medicaid, or self-pay patients. Offering additional services—like group therapy or wellness programs—can also help offset losses.
- Push for Fairer Policies
Join forces with other providers to advocate for better reimbursement rates. Contact lawmakers and take part in discussions about how these cuts affect mental health care.
- Cut Costs Without Cutting Care
Streamline paperwork with digital tools, work with primary care providers on shared patients, and find ways to make daily operations more efficient without sacrificing quality.
With the right adjustments, providers can keep delivering care while managing the financial hit.
The Bottom Line
Payment rates for mental health therapy are decreasing nationwide from 2024 to 2025. This decline may be attributed to budget reductions, new healthcare policies, or increasing costs of mental health services. Although certain regions may still offer higher payments, most areas are seeing a reduction in reimbursement rates.
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