Mental Health Billing: Answers to Frequently Asked Questions

Mental health professionals often face an uphill battle when seeking reimbursement for the services they provide. The byzantine rules and regulations of the insurance industry make successfully submitting claims a difficult and frustrating process. As a result, mental health practices often only collect 85 percent of the money owed to them.

No one gets into the mental health field because they enjoy wading through insurance industry bureaucracy. People become mental health professionals because they want to help others. However, providers cannot help others unless they collect sufficient funds to run their practices, and pay themselves. A large group practice will hire a dedicated employee to focus exclusively on mental health billing, but with behavioral health, it is more common to have small group or solo practices with limited administrative support for billing and other office duties.  Some providers will even try to do the billing themselves but eventually this will become overwhelming and create time management problems, not to mention lost income.

Psychiatrists, psychologists and therapists can improve their collection rate by hiring trained staff who understand billing for mental health services and the ins and outs of the insurance industry. The extra cost of hiring someone will be offset by the increase in revenue from seeing more patients and building your practice.

The following are a few questions and answers commonly asked regarding mental health billing.

1. How is mental health billing different than medical billing? The way therapists and counselors provide services is greatly different than the way services are provided by other medical professionals. For example, in a medical setting, patients and their insurers are billed for specific treatments, such as an x-ray or a lab test.

In the mental health field, patients and insurers are billed primarily for therapy, medical management and psychological testing services.  Insurers have rules about how long a session they’ll pay for, how many they’ll pay for per day or week, and often a maximum number of treatments that they will pay for. The mental health needs of the patient may exceed the services the insurer is willing to pay for, making balancing an effective treatment plan with adequate reimbursement tough for mental health professionals.

Behavioral health providers should be aware that many commercial insurance companies and state Medicaid programs outsource their mental health claims to an outside third party.  This is important because the claims address on the card isn’t always the correct address and if you submit to the wrong address your claims will be rejected.  It gets complicated so it’s important to have a biller who makes sure that the claims are filed correctly to avoid payment delays.

2. How long do insurance reimbursements typically take? In most cases, it will take at least 30 days from the date the insurer receives a claim to when your mental health practice will receive reimbursement. Some insurers move faster, with turnaround times of two to three weeks, but, as a rule, 30 days is what most practices can expect.
3. Can clients be billed for the balance after insurance reimbursement? Mental health practices that have contracted with insurance companies cannot balance bill their clients. They must accept the rate the insurer provides and write off any remaining balance. If you’re out of an insurer’s network, you may accept reimbursement from the insurer and then bill the patient for the rest.

While you may feel a bit stung for having to accept $80 for a $150 service, remember that insured clients tend to be more reliable repeat customers than those that pay with cash. Accepting the lower reimbursement may be worth it to secure regular clients.

4. What should I do when clients don’t inform me about changes to their insurance plans? In many cases, clients aren’t even aware of changes to their insurance plans. Yes, insurers send out letters explaining the changes, but these letters are often difficult to understand and are rarely read. In other cases, clients have changed jobs and gotten a new plan or have lost their coverage.

To avoid these situations, it’s a good idea to evaluate clients’ insurance coverage before each visit, if possible. By contacting insurers and making sure that clients’ coverage is still in effect and has not changed, mental health professionals can stay informed and avoid wasting time on rejected claims. This can be labor intensive, but the time it will save makes it worthwhile.

If you’ve filed a claim and had it denied because the client is no longer covered by his or her old plan, you’ll need to contact the client and get their new information. If they don’t have insurance, you’ll need to try to get payment from the client. If they do have coverage, you’ll need to file with the new insurer.

5. Do most sessions require pre-authorization? Again, this is something that varies from insurer to insurer. In most cases, an initial session or regular office visit does not require pre-authorization. More extensive services such as psychological testing may require approval from the insurer. Also, some insurers allow a set number of visits without authorization before requiring authorization for any subsequent visits.

6. What should I do if a session required pre-authorization and the client did not obtain it? When a provider is contracted with an insurance plan, it is the provider’s responsibility for obtaining authorization.  Patients often don’t know or don’t understand insurance requirements which is that is why it is critical to verify benefits and authorization requirements in advance.  In the event that authorization is not obtained and you have already seen the patient, you may be able to convince an insurer to back date authorization. This will require some diplomatic skills on your part, as insurers are often loathe to do this. They may make some exceptions if the client is a new member and didn’t know about the need for pre-authorization or if you are extremely persuasive.  If you don’t have a contract with an insurance plan, the patient can be billed in the event of non-payment from their insurance company.

7. Can I bill clients for more than one session per day? Most insurers are pretty strict about the one session per client, per day rule. Under some circumstances, mental health practices may be able to obtain approval for more than one service in a day. For example, if the practice has a psychiatrist and counselor on staff, the psychiatrist may perform one service, and then a counselor may perform another, and the insurer may reimburse for both. Or if the patient has to travel a long distance for an appointment and needs a longer session. Staying in contact with insurers and having good diplomatic skills will help in these situations.

8. What’s the time limit on filing a claim? This varies from insurer to insurer. Some insurers require claims to be filed very soon after services – 90 days is often a rule among private insurers. Others are more lenient with their time limits. For example, Medicare usually allows providers to file claims within a year to 18 months after services are provided. Knowing the insurers you work with and their claims submission rules will help you avoid having claims denied because of late submission.

9. Is teletherapy reimbursed by insurance? The Affordable Care Act requires that insurance companies make some accommodation for teletherapy but at this time there are a lot of hoops to jump through in order to get paid for this treatment. For example, Medicare states that the patient must live in an area that is designated a Health Professional Shortage Area (HPSA).  The Provider must be licensed to practice in the state where the patient resides. Only a HIPAA compliant video conferencing platform is allowed and this must be setup at an authorized medical office or facility. So in other words you cannot simply skype or facetime a therapy session in a patient’s home.  So while the technology is available for teletherapy, it’s still difficult to get paid for this.  Check with the individual insurance plan to verify their requirements before starting teletherapy treatment.

10. Is it okay to bill claims under another provider’s name and NPI number? This happens a lot in group practices where not all the providers are credentialed with all the insurance plans. A therapist who sees a blue shield patient may not be paneled with that insurance but will bill under under the name and number of another provider in the group so he can get paid. Sometimes it is acceptable to bill this way if you use a billing modifier (Q6)  on the claim that indicates the provider is “supervising” care by another clinician.  You’ll need to pay close attention to your payer contracts in order to bill for non-credentialed providers correctly. If your new provider is not replacing anyone and if the health plan requires only credentialed clinicians provide services, you cannot bill for services rendered by that provider. A practice would be in violation of their contract with the health plan.   In some cases, the health plan will only require physicians be credentialed; in others, plans require all providers (physicians and mid-levels) be credentialed and tied to the contract.

11. Should I go cash only? The answer to this varies from practice to practice and market to market. Some insurers have good reimbursement rates for mental health services, while others have low rates and rules that make getting paid extremely difficult. In some areas, the low-paying insurers may be the dominant carriers, and few clients in the community may have the better plans.

When considering whether to join a network or accept payment from insurers, it’s important to evaluate their pre-approval rules and their limits for payment. In some cases, the low payments and hassles of dealing with insurers make it more profitable to switch to a cash-only model and accept lower payments from clients or establish an income-based sliding scale.

Working with a mental health billing company can help behavioral health practices improve their collection rates, often allowing practices to collect 96 percent or more of money owed to them. Psychiatric Billing Associates is a national mental health billing service that focuses on assisting psychiatrists, psychologists, social workers and therapists. In business since 1994, Psychiatric Billing has an excellent track record of providing services such as:

Psychiatric Billing’s exclusive focus on mental health-related billing ensures that its billing professionals have expert knowledge of the latest insurance rules, government regulations, and coding requirements. The company is tech-focused and allows clients round-the-clock access to information such as claim status, client balances, authorization status, and more.

To ensure the financial health of your mental health practice, fast, efficient, and effective mental health billing services are essential. Psychiatric Billing Associates provides the expertise, professionalism, and technology necessary to optimize your practice’s billing and collections.

To ensure the financial health of your mental health practice, fast, efficient, and effective mental health billing services are essential. Contact us today to learn more.