Does Medicare Cover Ketamine Therapy?

Ketamine, traditionally an anesthetic, is now also used in mental health. This has raised questions about Medicare coverage for these treatments.

Current Medicare Coverage of Ketamine Therapy

Medicare’s coverage of ketamine therapy is highly specific and generally limited to Food and Drug Administration (FDA)-approved uses. While ketamine is FDA-approved as an anesthetic, its use for mental health or chronic pain is largely considered “off-label” and typically not covered.

However, an FDA-approved derivative of ketamine, esketamine nasal spray, marketed as Spravato, may be covered under certain circumstances. Esketamine is approved for treatment-resistant depression and major depressive disorder with suicidal ideation. Coverage for esketamine typically falls under Medicare Part B (Medical Insurance) because it must be administered in a certified healthcare setting under medical supervision.

Medicare Part B covers 80% of the Medicare-approved cost for esketamine after the annual Part B deductible is met, which is $257 in 2025. The medication is generally not covered by Medicare Part D (Prescription Drug Coverage) as it is not a self-administered prescription. If ketamine is used as an anesthetic during an inpatient hospital stay, Medicare Part A (Hospital Insurance) may cover the service after the Part A deductible is met, which is $1,676 per benefit period in 2025. Similarly, Part B would cover its use as an anesthetic in an outpatient setting, such as an emergency room.

Factors Influencing Coverage Decisions

Medicare’s coverage determinations for any medical service are influenced by several factors. Central to these decisions is FDA approval. For a drug or treatment to be widely covered, it typically needs specific FDA approval for the condition it is treating.

Another significant factor is medical necessity, which requires a physician to demonstrate that the therapy is reasonable and necessary for the diagnosis or treatment of an illness or injury. Even for FDA-approved treatments, beneficiaries usually need to meet specific clinical criteria, such as having tried and failed other traditional antidepressant medications for treatment-resistant depression.

The setting of care also plays a role in coverage. Esketamine, for example, must be administered in a certified healthcare facility due to its Risk Evaluation and Mitigation Strategy (REMS) program requirements, meaning it is typically covered as an outpatient service under Part B.

Medicare also utilizes National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs) to guide coverage policies. While there isn’t a broad NCD specifically for ketamine, local Medicare contractors may have LCDs that influence coverage decisions in their respective regions. Medicare plan type also affects coverage; while Medicare Advantage (Part C) plans must cover at least what Original Medicare covers, they may have different cost-sharing structures, provider networks, and prior authorization requirements.

Navigating Your Ketamine Therapy Costs

Navigating ketamine therapy costs requires proactive steps. Contact your Medicare plan—Original Medicare, Medicare Advantage, or Part D—to verify coverage. Inquire about prior authorization, deductibles, co-pays, and co-insurance.

It is also important to consult with your healthcare providers, including the prescribing physician and the clinic administering the therapy, to discuss estimated costs before starting treatment. They can provide details on the specific billing codes and any documentation needed for coverage.

For example, with Medicare Part B, you typically pay 20% of the Medicare-approved amount after meeting your deductible.

If coverage is denied, beneficiaries have the right to appeal the decision through a multi-level process. The initial appeal, known as a redetermination, can be filed with your plan within 60 to 120 days of the denial notice. If the denial stands, further appeals can be made to an Independent Review Entity and potentially to an Administrative Law Judge. Additionally, patient assistance programs offered by drug manufacturers, such as SPRAVATO withMe or the Johnson & Johnson Patient Assistance Program, may help reduce out-of-pocket costs for eligible individuals.