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6 Essential Billing Practices for Mental and Behavioral Health

Mental and Behavioral health billing is a complex endeavor to handle.  The reason for this complexity is that the charges differ for different services and the credentials of the provider who is delivering the therapy.  Before we know it, the practice or RCM staff might end up with a never-ending pile of billing processes with limited resources and time to work with.

The other area that brings in the challenge factor is the problem with processing pre-authorization correctly. The pre-authorization for mental and behavioral health facilities is entirely distinct from the other specializations due to the variation in the type of treatments and procedures associated with the same. This makes it very difficult for the RCM staff to unbundle and bring accuracy to the claims submission process.

The consistency of billing in mental and behavioral health facilities is not the same as that of other medical specialties. In other facilities, as a patient walks in, there is a standardized procedure that is followed starting from height and weight check, blood pressure and such, which brings about a recurring pattern while billing for one patient to the other.

In mental health facilities, the treatment plan differs from patient to patient depending on the length of the session, therapy, and client’s consent. This makes it challenging for the mental and behavioral health staff and demands them to be way more diligent while processing bills to avoid denials to the maximum level and improve reimbursements.

However, these challenges can be made way more streamlined to achieve a compatible approach. Let us look into 6 best ways to enhance mental and behavioral health billing:

1. Maintain and manage proper documentation

The patients’ data include their demographics, and insurance information and medical history which are prone to updates and changes. These changes can affect the accuracy of the claim submission, and an error in the same would result in claim denials or even rejections, and therefore, it is imperative to ensure that the patient’s data is up-to-date and relevant to the current scenario.

One effective way of ensuring accurate patient information is to establish an online verification system where the patients themselves can check and correct their details before coming in for an encounter, and the providers documenting the discussion in the therapy session and patient accurately, including the patient’s name, time of encounter, and time length of the discussion.

If payers reject claims that have pre-authorization, this approach eliminates uncertainty and holds them accountable for misinterpretation. 

2. Check the patient’s benefits

Verification of the patient’s benefits must be the first and foremost step before proceeding down to the sessions. Although this is a very tedious process, it is not impossible, especially in the case of returning patients.  This process might seem unnecessary but is indisputable as the patients will have little to no knowledge about their medical plans, even if a change occurs.

Benefit verification confirms the patient’s prevalent insurance coverage for services rendered by the practice. Online verification is once again the most effective yet easy way to get this verification process done. Even then there are a lot of limitations to online handling, and to cover for those shortcomings, the practice staff may reach out to the payer for more details like the degree of insurance coverage, the maximum limit, and pre-authorization requirements.

3. Stay on top of the CPT codes 

A HIPAA-compliant system uses Current Procedural Terminology (CPT) codes to align the rendered services with relevant medical codes. For further detailed information on the given codes, the coders use modifiers and identify the details of a particular procedure or treatment. Making errors, even in the minutest code could bring about repercussions for claims.

The most common error occurrence in coding has been due to the re-occurrence of undistinguished procedures that are similar. So, it is important to make sure that the coders effectively differentiate similar procedures.

The Editorial Panel for CPT codes constantly makes updates to the regulations and codes. Therefore, mental and behavioral health practices need to go back and check the source and make the update accordingly.

4. Psychiatric Evaluation Codes vs. E/M Codes. Know the difference!

The practitioners associated with mental and behavioral healthcare may bill for psychiatric evaluations as well as Evaluation and Management (E/M).

The E/M codes include the medical history of the patients, i.e., illness history, family and social history, system reviews and such, then, Examination, i.e., the type of procedure, test, and examination that needs to be performed, the nature of the patient’s issue, and such, and Medical Decision Making, i.e., number of treatments needed and documented, the risk factors, and complexities associated with reviewed data.

On the other hand, the psychiatric evaluation codes are solely utilized for diagnostic assessment which might also fall under the E/M code umbrella. However, the coders must know which code to use to result in clean claims.

5. Stay aligned to the insurance guidelines

Different payers have different requirements for how claims should be presented. Though additional information and CPT accuracy are inevitable, an insurer may reject claims even if the CPT codes are correct. Additionally, insurers often set strict deadlines for when practices can submit reimbursement requests. To stay ahead of these, it is essential to have clear communication with the payer and follow up accordingly to gather new and updated information.

6. Review Denied Claims

Even after a streamlined approach, there could various reasons why claims can get denied. Although these claims are appealable, practice staff must determine the patterns of this and devise solutions to eliminate the denial reoccurrence now and then.  For this, timely and regular reviewing of the existing denials must be done effectively and promptly as the insurers might have a short timely filing limit for re-submissions.


To ensure effective billing and clear claims submissions, mental and behavioral health practices must be aligned with these 6 essential tips:

  • Keep precise and detailed documentation of discussions for patients and payers.
  • Before offering a service to a patient, check for their benefits.
  • Verify appropriate CPT codes to cover the rendered services.
  • Recognize the differences between psychiatric evaluation codes and E/M codes.
  • Follow insurance companies’ billing guidelines to prevent denials.
  • Examine claim denials to correct errors and search for recurring patterns.

At Practolytics, we are aware of the difficulty in accurate billing and coding. We offer a billing and receivables system to support the success of your practice. To find out how we intend to increase the reimbursements to your company, speak with one of our experts right away.


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