Mental health billing isn’t known for its simplicity, and frankly, it has earned that reputation. There is an array of time-based codes, telehealth place-of-service issues, documentation requirements unique to each payer, and more, which can lead a well-practiced group to lose thousands of dollars per year through avoidable billing mistakes.
This guide covers mental health billing at a high level and in plain English to help your practice reduce denials and focus on clients.
Start With Accurate Credentialing
Credentialing must be in place before a claim can be properly billed. If a provider is not properly credentialed with the payer, their claim will be denied no matter how well-coded the claim is.
Keeping your practice properly credentialed involves:
- Keeping licenses current
- Maintaining active status on every insurance panel the practice bills through
- Promptly updating payers when anything changes, such as a new address, a new group affiliation, or an added certification
- Tracking provider enrollment and re-credentialing deadlines
- Making sure each provider’s information is accurate across payer databases
- Keeping CAQH profiles current and properly attested
- Adding new clinicians to payer panels before they begin billing
- Removing or updating providers who leave the practice
- Verifying that taxonomy codes, NPI information, and practice details match payer records
- Monitoring credentialing applications and following up on delays or missing documentation
Credentialing problems are one of the leading and most easily avoidable causes of denied claims in mental health organizations. A practice that treats credentialing as something to do only once is setting itself up for continued disruptions in revenue.
Get Comfortable With Time-Based Codes
Much of what goes into mental health billing and coding focuses on time-based codes, where the exact length of a session impacts the code choice. That translates to a need to accurately log start and end times, be aware of what counts as billable time, and understand which specific time markers define a particular code.
This is where documentation habits are as critical as clinical experience. A session that unexpectedly goes long but lacks a defined start and end time can get miscoded, and repeat errors of this nature are a bright red flag during a payer audit.
Match Documentation to the Code You’re Billing
Each code on the claim requires corresponding documentation to prove it was performed and is medically justified. Unsupported sessions (e.g., notes that don’t adequately reflect the services provided, outdated treatment plans, or claims submitted for services that are not medically necessary) leave organizations exposed, even when the bill for these services are otherwise correct.
When review indicates lack of support, payers will and are entitled to take back reimbursements from prior dates. The safest approach when billing for mental health services is to keep documentation and billing closely connected, rather than treating them as two isolated processes handled separately without regular coordination.
Understand How Utilization Review Fits In
Utilization review is the process by which payers decide whether a particular level of care, or a certain number of sessions, are medically necessary and appropriate. For behavioral health providers, this typically means justifying continued treatment for conditions that won’t resolve on a predictable timeline, which can create problems when a payer is looking for clear progress.
Practices that keep on top of utilization review requirements tend to face fewer coverage disruptions than those who treat it as an afterthought. Things these practices do well include making sure to submit timely documentation and understanding what payers expect to see. This is especially important for higher levels of care, such as partial hospitalization and intensive outpatient care.
Get Place of Service Codes Right
Telehealth has added a new layer of complexity that wasn’t there a few years ago. Providers now need to correctly distinguish between a client receiving care from home versus another location, since place of service codes affect reimbursement rates and coverage policies An incorrect place of service code can result in a denied claim or a reduced payment, even when every other part of the claim was accurate.
Don’t Underestimate the Cost of Small Errors
On their own, most of these issues appear minor at first glance: an outdated code, a missed credentialing renewal, or an ambiguous documentation note. But since behavioral health practices tend to bill a high volume of relatively low-dollar claims, these small, repeated errors can compound quickly and result in lost revenue. Until it’s reviewed closely, most practices don’t even realize that they’re losing a few percentage points to avoidable denials every month.
Getting Billing Right Protects the Work You’re Actually There to Do
Billing for mental health services is so much more than a simple administrative task. If it isn’t done correctly, it threatens a practice’s ongoing viability. Providers who grasp the basics discussed above—credentialing, time-based coding, documentation, utilization review, and the correct place of service designation—are much more likely to recognize potential problems before they become a habit.
At Integrity Billing, behavioral health is the only specialty we focus on, so we know precisely where the fundamental challenges typically lie within mental health practices. We’re happy to conduct a free forensic assessment to evaluate your claim history and pinpoint the areas where revenue might be being left behind. Give us a call today at 888-368-7461 to get in touch with our billing experts.