Medicaid covers play therapy if clinically documented, AHS official tells committee

At a House Human Services Committee meeting reviewing H-58, an act relating to Medicaid coverage for play therapy, Ashley Berliner, director of Medicaid policy for the Agency of Human Services, told lawmakers that play therapy is covered only when it is clinically indicated and documented as part of psychotherapy.

"Medicaid does cover play therapy. It's covered as a modality within the broader psychotherapy coverage, and it has to be therapeutically indicated," Berliner said. She explained that session notes must document how the play therapy approach advances the member's treatment goals and must tie to a dated treatment plan.

The committee heard from representatives who said licensed psychotherapists report inconsistent billing outcomes and confusion about when time spent on play or art can be billed to Medicaid. Berliner and committee members discussed past audits: she said an audit in the 2020–2021 period identified a few providers whose notes did not link play activities to treatment goals and therefore were not acceptable for Medicaid billing.

"When we do audits, we look for things to justify the medical necessity of the service and make sure that it's provided within the context of a covered service," Berliner said, adding that provider notes should include start and stop times, interventions provided, client responses and updates to treatment plans.

Committee members asked whether there is a billing or documentation template providers can follow. Berliner said billing is submitted with procedure and diagnosis codes through the provider portal and that a claim that only lists "play therapy" without linking it to a psychotherapy treatment plan would likely be rejected because play therapy is not a separate billable service in Vermont Medicaid.

Berliner told the committee that state staff conduct outreach and technical assistance and that the provider manual specifies documentation requirements. She said state staff are available to work with providers who engage with the agency and that she would follow up with a sample clinical note and provider communication guidance.

Committee members said they would consider whether an interpretive memo or clarifying guidance from Medicaid could resolve providers' confusion without new legislation. No formal vote or change to H-58 was recorded during this portion of the hearing.

The committee recorded interest in clearer written guidance and examples of acceptable session notes so that clinicians who use play, art or music as therapeutic modalities can bill within existing psychotherapy coverage when appropriate.