Medicare Returning Some Claims to Providers
By Barbara Griswold, LMFT (November 13, 2025; updated Nov. 21, 2025)
Yes, the government shutdown is now over! But Medicare providers might still feel its impact.
First, some claims were held: As reported in my October 28th newsletter, when pandemic rules expired October 1st, the Center for Medicare and Medicaid Services (CMS) implemented a 10-day claims hold. Then on October 15th, the CMS announced they would CONTINUE holding October claims, except behavioral health claims. Providers were told to continue submitting claims, and that payments would not be delayed for mental health.
And now, some claims are being returned: On 11/7/25, CMS announced the following:
“CMS has instructed the Medicare Administrative Contractors (MACs) to pay telehealth claims with dates of service on and after October 1, 2025, when CMS can definitively confirm that the claims are for behavioral and mental health services…. Additionally, we have instructed the MACs to process Medicare telehealth claims with a place of service code 10 (patient’s home) that contains an [F-code] diagnosis code…
However, due to systems limitations and recognizing that not all telehealth claims for behavioral and mental health services necessarily include a diagnosis code in the above range… we have not been able to identify all claims that are payable… For the subset of telehealth claims that are currently being held, and that were submitted on or before November 10th, 2025, with dates of service on or after October 1, 2025, CMS will be returning those claims to providers.” [To read the full announcement, click here]
What does this mean, in plain English? It seems like Medicare is processing (most?) mental health claims, but they dealt with the lack of Congressional clarity by returning SOME claims to providers (great solution, guys!)
For help understanding this, I turned to Medicare expert Susan Frager of PsychBillingCoach.com. “Trust Medicare to word things as confusingly as possible!” she said. “Here’s my take: If you submit a claim with a POS 10 and an F-code diagnosis, everything should be fine. If you bill POS 02 and an F-code, as I read it, it sounds like you should also be fine, although you might have a few October/early November claims returned.”
And if you use a diagnosis other than an F-code? That claim may be returned.
Why would some clinicians use POS 02 (telehealth where the client is not at home)? They might not be aware that Medicare has instructed clinicians to use the POS 10 when clients are anywhere but at a medical facility. Also, Frager says she has found that in some states Medicaid plans require POS 02 and won’t recognize POS 10. “Clinicians in those states who participate with Medicaid and see dual Medicare/Medicaid clients may have to bill with POS 02 so that the claim will cross over correctly to Medicaid and have Medicaid pay their share.”
What should you do if your claim is returned? Look for the Claim Adjustment Reason Code (CARC) on the returned claim. CMS states that returned claims will have a denial message of CARC 16 and RARC M77. “CARC 16 indicates the claim lacks information or has errors,” says Frager, “and a Remittance Advice Remark Code (RARC) of M77 indicates a missing, incomplete, or invalid Place of Service code.”
The problem, Frager says, is that some billing systems don’t show these denial codes, so clinicians may have to find them by downloading remittances on their Medicare MAC’s portal. [Tip from Susan: A full list of CARC and RARC codes can be obtained for free by going to https://x12.org/codes]
So what must you do to get paid for returned claims? “It sounds like you would just have to resubmit a returned claim,” says Frager. “The 11/12/25 Congressional deal that ended the government shutdown was retroactive to October 1st. So I would recommend that therapists wait a couple weeks after that for Medicare to reprogram their claims systems, then just resubmit your claims.”
Remember: In the end it is up to your regional Medicare Administrative Contractor (MAC) to implement Medicare rules, and they aren’t always consistent. So I always recommend that you contact them. A list of MACs and contact information can be found here
UPDATE 11/2125: On 11/21/25, Medicare announced the following: “On November 6, 2025, CMS instructed the MACs …to return a subset of telehealth claims submitted on or before November 10, 2025… For professional claims, those claims were returned with the following messages: CARC 16 and RARC M77. These claims are now payable, provided they meet all applicable Medicare requirements. Practitioners may resubmit those returned claims to CMS, as well as submit any other telehealth claims held in anticipation of possible Congressional action. Practitioners are also encouraged to identify which beneficiaries were charged for telehealth services with dates of service on or after October 1, 2025, that are retroactively payable and instead submit applicable claims to Medicare, refunding any overpayment to beneficiaries. Our instruction to practitioners to append the GY modifier on certain telehealth claims is rescinded and providers may resubmit previously denied claims.”
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Barbara Griswold, LMFT is a private practice coach and the author of Navigating the Insurance Maze:The Therapist’s Complete Guide to Working With Insurance — And Whether You Should, 10th edition. Check out Barbara’s online catalog of helpful online courses, practice forms, and other therapist resources related to insurance, documentation, and running your therapy business here, and subscribe to her free e-newsletter here.