When a Medicare patient sees a psychiatrist for depression, the visit generates a reimbursement roughly 30% lower than a comparable visit for diabetes monitoring. The disparity is not an oversight — it is baked into the fee schedule that determines how the program pays doctors. And it has consequences: fewer psychiatrists accept Medicare, patients wait months for care, and the gap between physical and mental health coverage widens.

The difference comes down to codes. Diabetes monitoring is billed under evaluation-and-management codes that pay around $110–140 per hour, depending on complexity and region. Depression care, when it involves psychotherapy, is billed under codes that pay roughly $50–80 per hour. The same Medicare system that covers both conditions effectively assigns a lower value to an hour spent helping a patient manage depression than to an hour spent checking blood sugar levels.

This article examines how the reimbursement gap emerged, what research shows about its size, how the fee schedule perpetuates it, and what policy proposals aim to close it. The evidence suggests that the disparity is neither accidental nor inevitable — but fixing it has proven politically difficult.

Why Depression Gets Lower Reimbursement Than Diabetes in Medicare

Medicare's fee schedule assigns a dollar amount to each service based on a combination of physician work, practice expense, and malpractice cost, all converted into relative value units (RVUs). For diabetes monitoring, the work RVUs reflect the time and intensity of managing a chronic physical condition — checking labs, adjusting medications, coordinating with specialists. For depression care, the work RVUs are lower, in part because psychotherapy is classified as a time-based service that does not involve the same level of "medical decision-making" as managing a physical illness.

The American Medical Association's Relative Value Scale Update Committee (RUC) makes recommendations to the Centers for Medicare & Medicaid Services (CMS) about how to value each code. Mental health services have historically been underrepresented on the RUC, and their codes have been assigned lower values than comparable physical health services. A 2019 study in Health Affairs found that Medicare pays about 30% less for a depression visit than for a diabetes visit, even when the time spent is similar.

This gap is not about the severity of the conditions. Depression is a leading cause of disability worldwide, and untreated depression increases the risk of diabetes complications. But the reimbursement system was designed around procedures and tests — things that can be counted and measured — rather than the kind of relational, conversational work that defines much of psychiatric care.

The Research That Quantifies the Gap

The most frequently cited analysis of the disparity comes from a 2019 study published in Health Affairs, which compared Medicare reimbursement for depression care and diabetes care across a range of visit types. The researchers found that, on average, a 60-minute psychotherapy session for depression was reimbursed at about $80, while a 60-minute diabetes management visit paid around $120 — a gap of roughly 33%. The study controlled for geographic variation and provider type.

An analysis of the 2022 Medicare fee schedule, conducted by researchers at the University of Michigan, confirmed that the gap had not narrowed. In fact, the difference in work RVUs between psychotherapy codes and diabetes management codes had increased slightly, as CMS updated the diabetes codes to reflect new technology for continuous glucose monitoring but did not similarly update the psychotherapy codes. As of late 2024, the gap remains in the same range.

The disparity is not limited to depression. Anxiety disorders, post-traumatic stress disorder, and substance use disorders are all billed under similar psychotherapy codes that pay less than the evaluation-and-management codes used for most physical health visits. A 2023 report from the Medicare Payment Advisory Commission (MedPAC) noted that mental health services accounted for only about 3% of Medicare spending, despite affecting a much larger share of beneficiaries.

Some critics argue that the comparison is not entirely fair — diabetes monitoring often involves lab tests and medication adjustments that require more "cognitive work" than a psychotherapy session. But advocates for mental health parity point out that psychotherapy requires its own kind of cognitive work: assessing suicidal ideation, managing complex trauma, and coordinating with other providers. The difference in reimbursement, they say, reflects a bias in how the system values different kinds of medical labor.

How Fee Schedules Are Set and Why Mental Health Loses

Medicare's fee schedule is built on a system of relative value units (RVUs), which assign a numeric weight to each service based on three components: physician work (time, skill, and intensity), practice expense (overhead costs), and malpractice expense. The total RVUs are multiplied by a conversion factor — about $33 in 2024 — to produce the payment amount.

Physician work RVUs are the most contentious part of the formula. The RUC, which advises CMS on RVU values, is dominated by specialty societies from procedure-heavy fields like cardiology and orthopedics. Mental health specialties have limited representation. As a result, codes for services like psychotherapy have historically been assigned lower work RVUs than codes for services like diabetes management, even when the time required is identical.

Practice expense RVUs also disadvantage mental health. Psychotherapy requires little equipment — typically just a room and a chair — so the overhead cost is lower than for a diabetes visit that may involve a glucose monitor, test strips, and other supplies. But the practice expense calculation does not account for the fact that psychiatrists often spend time on phone calls with family members, coordinating with schools or employers, and completing disability paperwork — activities that are not separately billable.

There is no procedure code for a suicide risk assessment, for example. A psychiatrist can bill for a 60-minute psychotherapy session, but if the patient is in crisis and the session runs 90 minutes, only the first 60 are reimbursed. For diabetes, a similar situation might involve billing for a prolonged visit code that adds extra RVUs. No such code exists for psychotherapy.

The result is a system that values doing things to patients — measuring, testing, injecting — more than talking with them. This is not an accident; it is a legacy of a fee schedule designed around acute care and procedures. But it has real consequences for access.

The Consequence: Fewer Psychiatrists Accept Medicare

Low reimbursement rates have a predictable effect: many psychiatrists choose not to accept Medicare. According to a 2023 survey from the American Psychiatric Association, only about 40% of psychiatrists accept new Medicare patients, compared to roughly 80% of primary care physicians and 85% of cardiologists. The disparity is even starker in rural areas, where the percentage of psychiatrists accepting Medicare drops below 30%.

Patients who cannot find a psychiatrist who accepts Medicare often pay out of pocket, which can cost $200–300 per session, or they go without care. A 2024 analysis by the Kaiser Family Foundation found that Medicare beneficiaries with depression were twice as likely as those with diabetes to report that they had not seen a specialist in the past year because of cost or availability.

The wait times reflect the shortage. In a 2024 survey of Medicare beneficiaries, the average wait for a new-patient appointment with a psychiatrist was 45 days, compared to 15 days for a diabetes specialist. In some metropolitan areas, wait times exceeded three months. For a patient with severe depression, three months can be the difference between recovery and hospitalization — or worse.

Some psychiatrists have responded by opting out of Medicare entirely, treating only patients with private insurance or those who can pay cash. A 2025 study in JAMA Health Forum found that the number of psychiatrists opting out of Medicare had increased by 15% since 2020, while the number of primary care physicians opting out had remained flat. The authors attributed the trend to the growing gap between Medicare reimbursement and the cost of providing care.

Policy Fixes That Have Been Proposed

Several legislative proposals have aimed to close the reimbursement gap. The Medicare Mental Health Access Act, introduced in 2023 by a bipartisan group of senators, would require CMS to increase the work RVUs for psychotherapy codes to match those for comparable evaluation-and-management codes. The bill also includes funding for a study on how the fee schedule affects access to mental health care. As of mid-2026, the bill has not passed either chamber.

In 2024, CMS proposed adding new RVU codes specifically for psychotherapy, which would allow the agency to set higher values without going through the RUC. The proposal was supported by the American Psychiatric Association but opposed by some physician groups who argued that it would shift resources away from other services. CMS finalized a smaller adjustment than originally proposed, increasing psychotherapy RVUs by about 5% — enough to narrow the gap but not close it.

A bipartisan bill in the House, the Behavioral Health Coverage and Access Act, would require Medicare to reimburse psychiatric services at the same rate as primary care services for the same amount of time. The bill has 45 cosponsors but has not been scheduled for a vote. Proponents argue that the bill would cost relatively little — an estimated $2 billion over 10 years — because the number of Medicare patients receiving psychotherapy is small relative to those receiving diabetes care.

Opponents, including some budget hawks, argue that increasing reimbursement for mental health services would lead to overutilization and that the current system already provides adequate access. They point to the availability of telehealth as a way to reduce costs and increase access without changing the fee schedule. But telehealth rates are also lower than in-person rates for many codes, and the reimbursement gap persists in virtual visits as well.

Trade-Offs and Unintended Consequences of Closing the Gap

While the moral case for parity is strong, some policy analysts warn that simply raising psychotherapy reimbursement could have unintended effects. For instance, if CMS increases RVUs for psychotherapy without adjusting the overall budget neutrality requirement, it may need to reduce payments for other services — potentially those used by primary care physicians who already serve many Medicare beneficiaries with depression. A 2022 simulation by the Congressional Budget Office suggested that a 20% increase in psychotherapy RVUs could reduce payments for evaluation-and-management visits by roughly 2%, which might discourage primary care doctors from providing mental health screening.

Another concern is that higher reimbursement could incentivize overbilling or the proliferation of low-quality psychotherapy mills that maximize volume without improving outcomes. Medicare already struggles with fraud in durable medical equipment and home health; a similar dynamic could emerge in mental health if oversight does not keep pace. However, proponents argue that psychotherapy is inherently difficult to overbill because it is time-based and requires direct patient contact, unlike device or lab fraud.

There is also the question of whether the gap should be closed by raising psychotherapy rates or by lowering diabetes management rates. Some health economists argue that diabetes care is overvalued relative to its clinical benefit, and that a more rational fee schedule would redistribute RVUs across all chronic conditions. But such a restructuring would face fierce opposition from diabetes advocacy groups and endocrinology societies, making it politically even less feasible than raising mental health rates alone.

A third trade-off involves the role of non-physician providers. Psychologists, clinical social workers, and nurse practitioners already deliver a substantial portion of psychotherapy under Medicare, but their reimbursement rates are typically lower than physicians' rates. If physician psychotherapy rates rise, these other providers might also see increases, narrowing the gap between physician and non-physician pay. That could improve access by making independent practice more sustainable for social workers, but it could also increase overall Medicare spending on mental health beyond what budget hawks are willing to accept.

What Patients and Clinicians Can Do Now

While policymakers debate, patients and clinicians have some options. Patients who are denied coverage for mental health services can appeal through Medicare's appeals process, which has a relatively high success rate for claims involving depression care. Advocacy groups like the National Alliance on Mental Illness (NAMI) provide free guidance on how to file an appeal.

Clinicians can use collaborative care codes, which allow them to bill for coordinating with primary care providers and other specialists. These codes pay at a higher rate than standard psychotherapy codes and are designed to reflect the complexity of managing mental health alongside physical health. However, they require a team-based approach that many solo practitioners cannot provide.

State-level parity laws can also help. While the federal Mental Health Parity and Addiction Equity Act requires insurers to cover mental health services at the same level as physical health services, it does not apply to Medicare. Some states have passed their own parity laws that apply to Medicare supplemental plans, but enforcement is uneven.

Telehealth has expanded access for some patients, particularly those in rural areas. Medicare temporarily increased telehealth reimbursement during the COVID-19 public health emergency, and some of those changes were made permanent in 2024. But the reimbursement for telehealth psychotherapy is still lower than for in-person diabetes care, so the gap remains.

The reimbursement disparity between depression and diabetes care in Medicare is not a minor accounting issue. It is a structural feature of a system that has historically valued physical health over mental health. Until the fee schedule is reformed, psychiatrists will continue to be paid less for the same amount of time, and patients will continue to struggle to find care.

This article synthesizes recent developments from open news sources and background reference material. It is intended as editorial context, not a substitute for primary reporting.