Mental Health Billing can be overwhelming, but it is crucial to ensure patients receive the care they need while providers secure proper reimbursement. With 1 in 5 U.S. adults experiencing mental illness yearly, demand is high. However, 34% of psychologists don’t accept insurance due to billing complexities, highlighting the need for streamlined processes and expert support.
In 2025, key updates aim to simplify this process:
- Medicare Telehealth Extension: Coverage expanded through September 30, 2025.
- New CPT Codes: Improved billing options for behavioral health services.
To bridge this gap, recent updates like allowing mental health counselors (MHCs) and marriage and family therapists (MFTs) to bill Medicare aim to simplify the process. Understanding these changes can help providers deal with reimbursements more efficiently, so they can focus on what matters most: patient care.
The Importance of Medical Billing in Mental Health Care
For mental health, medical billing is essential because it ensures that the providers get reimbursed for the services they provide while making mental health care more accessible to patients. Many individuals rely on insurance plans to afford therapy, counseling, and psychiatric care. Without proper billing procedures, procedures may face financial difficulties that can limit their ability to serve patients.
Additionally, accurate mental health billing & coding helps reduce claim denials, delays, and administrative burdens, allowing mental health professionals to focus on patient care instead of financial stress. It also ensures compliance with regulations, prevents legal issues, and maintains a smooth workflow in mental health practices.
Top Challenges in Mental Health Medical Billing and How They Impact Providers
Mental health medical billing providers face several challenges that make the process complex and time-consuming. Here are some of the key issues:
1. Complex & Varying Insurance Policies
Mental health billing and coding is very complex, and insurance providers’ varying policies make it more so. Each insurer has its own set of standards and rules regarding coverage limits and pre-authorization requirements, making it very difficult to keep up with these ever-changing policies.
2. Frequent Denials & Rejections
Mental health billing and coding are crucial, claims are mostly denied due to inaccurate coding, missing documentation, or exceeding insurance coverage limits. Insurers impose strict documentation requirements, and even minor mistakes can lead to claim rejection.
3. Changing Regulations & Compliance Issues
The regulatory variations add another layer of complexity to mental health billing. Laws such as the Mental Health Parity and Addiction Equity Act (MHPAEA) mandate equal insurance coverage for mental health services, but providers and insurers often misinterpret these laws.
4. Time-Consuming Pre-Authorization Requirements
Many mental health services require pre-authorization, leading to administrative burdens and delays in patient care. Providers must submit extensive documentation before treatment approval, and insurance companies frequently change their pre-authorization policies, making it difficult to keep up.
5. Complicated CPT Codes & Modifiers
Billing for mental health services involves specific CPT codes such as 90837 (60-minute psychotherapy) and 90834 (45-minute psychotherapy), along with various modifiers. Selecting the wrong code can lead to claim denials or underpayments. Staying updated on coding changes is crucial for accurate billing and maximum reimbursement.
6. Low Reimbursement Rates
Mental health providers often receive lower reimbursement rates than other medical specialties. Insurance companies also sometimes impose session caps, which limit the number of billable sessions per patient. It can negatively affect the financial stability of mental health professionals.
7. Billing for Telehealth Services
The widespread adoption of telehealth services has introduced additional billing challenges. While many insurers cover virtual mental health sessions, reimbursement policies vary widely between providers and states. Some states still impose restrictions on telehealth billing, making it difficult for providers to receive payments for online services.
8. Credentialing & Provider Enrollment Issues
Mental health professionals frequently encounter delays in getting credentialed with insurance networks, preventing them from billing for services. The credentialing process is time-consuming and requires precise documentation. Any mistakes or delays in provider enrollment can lead to claim denials and revenue loss.
9. Out-of-Network Billing Complications
Most mental billing providers operate out of the network, leading to billing challenges for both providers and patients. Out-of-network billing often results in higher costs for patients, leading to difficulties in collections and increased financial strains on practices.
10. High Administrative Burden
Unlike other medical fields, mental health practitioners often handle their billing, leading to increased workload and burnout. The lack of trained billing staff results in frequent claim errors, delayed payments, and financial instability. Outsourcing billing services like CloudRCM can help.
How a Medical Billing Service Can Help Mental Health Providers Overcome Billing Challenges
A medical billing service can help mental health providers overcome these challenges by offering:
- Expertise in insurance policies, ensuring correct claims submission and compliance with varying insurer rules.
- Claims management to reduce denials through accurate coding and efficient appeals handling.
- Regulatory compliance support to ensure adherence to MHPAEA, HIPAA, and state laws.
- Pre-authorization assistance to prevent delays and improve the approval processes.
- Accurate coding and modifier usage to maximize reimbursements and avoid underpayments.
- Optimized reimbursement strategies to help providers receive fair and timely payments.
- Telehealth billing support to navigate insurer policies and ensure proper reimbursement for virtual services.
- Credentialing services to speed up provider enrollment and prevent claim denials due to credentialing issues.
- Out-of-network billing solutions to manage patient payments and insurance reimbursements effectively.
- Administrative relief by handling all billing tasks, reducing provider workload, and preventing burnout.
Billing Directions for Mental Health Services
Proper Mental health billing and coding ensure timely reimbursements and reduce claim denials. Following best practices helps providers navigate complex insurance requirements.
Use the Correct CPT and ICD-10 Codes
Accurate coding is essential for successful claims. For example, 90837 is used for 60-minute psychotherapy, while F32.9 represents Major Depressive Disorder. Errors in coding can lead to denials or underpayments, so staying updated on payer guidelines is crucial.
Verify Insurance Coverage & Pre-Authorization
Verifying patient eligibility, coverage limits, and pre-authorization requirements before treatment helps minimize claim denials. Some insurers limit therapy sessions per year, making verification essential for smooth reimbursement.
Follow Proper Documentation Standards
Detailed session notes, treatment plans, and medical necessity justifications ensure compliance and reduce audit risks. Insurers require thorough documentation, and missing details can result in denied claims.
Stay Updated on Telehealth Billing
Telehealth billing requires correct place-of-service codes and modifiers. Coverage varies by insurer, so verifying policies ensures proper reimbursement for virtual sessions.
Common CPT and ICD-10 Codes Used in Mental Health Billing
CPT codes are standardized medical codes maintained by the AMA, essential for billing mental health services. They differ from ICD-10 diagnosis codes and are crucial for therapists on managed care panels or providing superbills. Proper coding ensures accurate reimbursement, while errors can lead to payment issues or audits.
Factors like credentials and location affect reimbursement, but using the right CPT and add-on codes is key. Need error-free billing? Our mental health billing service can help.
CPT Codes for Mental Health Services
| CPT Code | Description |
| 90791 | Psychiatric diagnostic evaluation (without medical services) |
| 90792 | Psychiatric diagnostic evaluation (with medical services) |
| 90832 | Individual psychotherapy (16-37 minutes) |
| 90834 | Individual psychotherapy (38-52 minutes) |
| 90837 | Individual psychotherapy (53+ minutes) |
| 90846 | Family psychotherapy (without patient present) |
| 90847 | Family psychotherapy (with patient present) |
| 96127 | Brief emotional/behavioral assessment (e.g., depression screening) |
| 96130/96131 | Psychological testing and evaluation |
| G2012 | Virtual check-in (brief communication technology-based service) |
ICD-10 Codes for Common Mental Health Conditions
| ICD-10 Code | Condition |
| F32.9 | Major depressive disorder, unspecified |
| F41.1 | Generalized anxiety disorder |
| F31.9 | Bipolar disorder, unspecified |
| F43.10 | Post-traumatic stress disorder (PTSD), unspecified |
| F42.2 | Obsessive-compulsive disorder (OCD) |
| F90.0 | Attention-deficit hyperactivity disorder (ADHD), predominantly inattentive type |
| F10.20 | Alcohol dependence, uncomplicated |
| F19.20 | Other psychoactive substance dependence, uncomplicated |
| F50.9 | Eating disorder, unspecified |
Recent Trends and Updates in Mental Health Billing Reimbursements
Mental health billing reimbursements are evolving due to new policies, legislative changes, and payer updates. Here’s what providers need to know:
Medicare Reimbursement Changes
- Increased Payments for Psychotherapy: A 19.1% RVU increase for psychotherapy with E/M services adds $3 to $6 per visit in 2024.
- MFTs & MHCs Can Bill Medicare: Now eligible for Medicare billing but at 75% of the standard rate, compared to psychologists at 100%.
Key Legislative Updates
- Improving Access to Mental Health Act (H.R.1638) Aims to increase Medicare rates for clinical social workers.
- Better Mental Health Care Act (S.3430) focuses on expanding mental health access and lowering prescription drug costs.
- State Investments: Oklahoma allocated $5M+ to behavioral health, and 21 states introduced 73 bills for maternal mental health.
Challenges & Future Outlook
- Despite some increases, Medicare mental health therapy rates may drop 14% in 2025, hitting rural areas hardest.
- Advocacy efforts are pushing for higher behavioral health reimbursement rates due to growing demand.
Final Thoughts
Mental health billing and coding are complex but essential for ensuring providers receive proper reimbursements while patients access necessary care. The evolving landscape, including new Medicare policies and legislative changes, presents both challenges and opportunities for mental health professionals. By implementing best practices, staying updated on insurance guidelines, and leveraging expert billing services like CloudRCM, providers can reduce administrative burdens and maximize revenue.
As mental health care continues to grow in demand, efficient billing solutions will play a crucial role in sustaining quality care and financial stability for providers.
Contact us today at (224) 231-6880 to improve your billing process and maximize your reimbursements!
FAQs:
What coding system is used in mental health for diagnosis?
Mental health diagnoses use the ICD-10-CM (International Classification of Diseases, 10th Revision, Clinical Modification) coding system.
What is the coding for therapy billing?
Therapy billing uses CPT codes such as 90837 (60-minute psychotherapy) and 90834 (45-minute psychotherapy) for individual sessions.
Is coding good for mental health?
Yes, accurate coding ensures proper reimbursement, reduces claim denials, and supports better patient care in mental health services.
What is the billing code for a psychiatric evaluation?
The billing codes for psychiatric evaluations are 90791 (without medical services) and 90792 (with medical services).
What are the billing codes for psych testing?
Psychological testing uses CPT codes 96130/96131 for psychological evaluation and 96136/96137 for neuropsychological testing.
