Behavioral Health Billing: Errors to Avoid Now

Common Billing Mistakes in Behavioral Health to Avoid

By Henry Jensen on February 4, 2025
Common Billing Mistakes in Behavioral Health to Avoid

Are you a behavioural health practitioner and facing challenges regarding billing and revenue cycle management? We are here with some solutions. 

The primary goal of a mental health practitioner is to provide quality care to their client and managing the revenue can be very overwhelming for practitioners who are running their small practices, it is also very costly for big health sectors because it requires more resources, efficiency and accuracy. However, maintaining a good cash flow is very important for a practice to grow. 

Why Accurate Behavioral Health Billing Matters:

Behavioral health billing is very crucial because it offers different types of treatment options related to mental health and substance abuse which can complicate the process of billing.

It is a complicated process because it requires taking care of the documentation requirements, CPT codes and choosing the right treatment plans. The root cause of claim denials and rejections is caused due to errors in these essential requirements in the billing processes.

A recent study by the Medical Group Management Association (MGMA) revealed that up to 15% of all claims are denied due to billing errors. 

Key benefits of accurate billing include:

Key benefits of accurate billing include
  • Improved Cash Flow: Accurate claim submission ensures timely reimbursement and increases financial stability. 
  • Compliance with Regulations: Proper coding and documentation reduce the risk of audits and penalties.
  • Improved Operations: An efficient billing process allows mental health service providers to focus more on patient care.

What are the common billing mistakes you should avoid in behavioural health?

What are the common billing mistakes you should avoid in behavioral health

1. Incorrect CPT, HCPCS, and ICD-10 Coding

The main cause of most behavioural health billing errors is improper coding.  

For instance, using the wrong CPT code for psychotherapy duration or omitting the necessary modifiers can lead to claim denials.

Example: Coding a 45-minute therapy session (CPT code 90834) as a 60-minute session (CPT code 90837) could be flagged as upcoding, leading to reimbursement issues or audits.

Solution: 

Stay updated on coding changes and maintain a comprehensive understanding of CPT, HCPCS, and ICD-10 codes.

2. Insufficient Documentation

Documentation gaps are a primary cause of mental health billing insurance denials. Insurers require detailed notes that justify the medical necessity of services rendered.

Example: A claim for crisis psychotherapy (CPT code 90839) must include documentation supporting the urgent need for intervention.

Solution: 

Implement standardised templates for clinical documentation that align with payer requirements.

3. Overlooking Insurance Eligibility Verification

Many behavioural health billing issues arise from failing to verify a patient’s insurance coverage. Behavioral health services often face unique restrictions, such as limits on session numbers or the need for prior authorization.

Example: Submitting a claim for a service not covered under a patient’s policy leads to immediate rejection.

Solution:

Perform a thorough eligibility check for each patient before providing services.

4. Neglecting Modifiers and Place-of-Service Codes

Modifiers convey critical details about the service provided, such as whether telehealth was used. Failing to use these appropriately can result in denials.

Example: Forgetting to add the modifier “95” for telehealth psychotherapy sessions can cause claims to be rejected.

Solution:

Train your team on correct modifier usage and ensure software systems are set to flag missing modifiers.

5. Failing to Manage Denials Effectively

Denial management is a key component of behavioural health RCM. Ignoring denied claims or failing to appeal can cost your practice significant revenue.

Example: MGMA data shows that 35% of practices do not appeal denied claims, leaving money uncollected.

Solution:

Establish a robust denial management process that includes regular follow-ups and appeals for incorrectly denied claims.

Essential Strategies for Billing in Behavioral Health

Essential Strategies for Billing in Behavioral Health

To improve the behavioural health billing and reduce errors, you need to consider these strategies:

1. Use Specialized Behavioral Health Billing Software

Behavioural health billing services often involve complex rules and frequent updates. Adopting a tailored medical billing software solution can help you in the processes, from coding to claims submission. Practices using automated billing solutions report a 30% reduction in denials, according to the Healthcare Financial Management Association (HFMA).

2. Hire a Mental Health Billing Specialist

A mental health billing specialist understands the nuances of behavioural health RCM, including payer-specific rules and Behavioural Health Billing solutions for common challenges. Specialists can help reduce mental health billing denials by ensuring accurate submissions and timely follow-ups.

3. Stay Updated on Coding Changes

The American Medical Association (AMA) and the World Health Organization (WHO) frequently update CPT and ICD-10 codes. Keeping current prevents errors due to outdated codes.

4. Train Staff on Compliance and Accuracy

Regular staff training can help your team avoid behavioural health billing errors. Training should focus on coding accuracy, documentation best practices, and denial management. A Midwest behavioural health practice reduced claim rejections by 20% after implementing quarterly billing workshops.

5. Establish a Denial Management Protocol

Develop a system to track and appeal denied claims. Analyze denial patterns to identify systemic issues, such as recurring coding errors or insufficient documentation. According to RevCycle Intelligence, 63% of denied claims are recoverable with proper follow-up.

6. Improving telehealth Billing Expertise

Telehealth services have grown exponentially but come with their own coding and billing challenges. Ensure you’re using appropriate place-of-service codes and modifiers for virtual sessions. Telehealth accounted for 36% of all behavioural health visits in 2022, emphasizing the need for telehealth billing proficiency.

7. Monitor Payer Reimbursements

Track trends in reimbursements to identify discrepancies and negotiate better rates with insurers. If your reimbursement rate for psychotherapy is below the regional average, it might be time to renegotiate contracts.

Common CPT codes in behavioral health:

CPT codeService DescriptionCommon MistakesTips to Avoid Mistakes
90791Psychiatric Diagnostic EvaluationMissing diagnostic detailsEnsure complete documentation of history
90792Diagnostic Eval with Medical ServicesNot including medical servicesInclude all relevant medical services
90832Psychotherapy, 30 minutesMisreporting session lengthAlign session length with the correct code
90834Psychotherapy, 45 minutesBilling for shorter sessionsBill based on the actual session duration
90837Psychotherapy, 60 minutesBilling for less than 60 minutesAccurately track session time
90846Family Therapy (without patient)Coding when the patient is presentUse only when the patient isn’t present
99213Outpatient Visit, Established PatientUsing for therapy sessionsReserve for follow-ups, not therapy

Final thought: 

Behavioural health billing is a very complicated task as it requires the right strategies to be applied to reduce the chance of error and maximise the rates of reimbursement. Your practice can improve cash flow and reduce administrative headaches by addressing common mistakes like incorrect coding, inadequate documentation, and poor denial management.  Investing in tools and training a team to look after the administrative task is a long process and it requires time and resources which can be very costly, outsource efficient medical billing to ensure efficiency and accuracy. 

By implementing these essential strategies, your practice can deal with the challenges in mental health billing, ensure compliance, and secure payer reimbursements efficiently. Improving your behavioural health billing process not only optimizes revenue but also allows you to focus on what truly matters providing exceptional care to your patients.

Outsource to Cloud RCM solutions:

Our team of experts ensures accuracy, efficiency, and compliance in managing your revenue cycle. We handle billing, coding, and claims processing with precision, helping you reduce errors, improve workflows, and maximize reimbursements. Let us focus on your financial success while you focus on patient care.

Are you struggling with the billing mistakes? Feel free to reach out to us: at  (224) 231-6880.

Additional resources

FAQs

Common billing errors in medical coding?

Incorrect code usage, upcoding, undercoding, and lack of proper documentation; prevent them through training, audits, and accurate documentation.

Three main problems with billing in a health office?

Claim denials, delayed reimbursements, and incorrect patient billing; address these with clear processes, technology, and staff training.

Behavioural health billing?

The process of billing for mental health and substance abuse treatments using specific codes for services provided.

Considered a behavioural health issue?

Conditions impacting mental well-being or substance use, such as anxiety, depression, or addiction.

Common behavioural health issues requiring treatment

Depression, anxiety disorders, bipolar disorder, PTSD, and substance abuse.

Three behavioural problems

Aggression, inattention, and impulsivity are often seen in various mental health disorders.

Henry Jensen

Henry Jenson is the creative mind behind the messaging at CloudRCM Solutions, where he crafts compelling content that bridges the gap between technology and healthcare. With a rich background spanning multiple sectors of the industry, he thrives on solving the intricate challenges that medical practices and billing organizations face.

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