A therapist completes a session, updates the patient’s clinical notes, and submits an insurance claim. Weeks later, the payment remains pending because of a coding error, missing authorization, or incorrect provider information.
Some of the difficulties encountered by behavioral health offices could result in spending much of their time following up with the insurance companies.
Behavioral health billing services assist psychiatrists, psychologists, counselors, and therapy offices in handling claims from patient visits to payment.
This guide will cover billing codes, reasons for delayed claim, documentation, challenges of receiving reimbursement, and how billing and credentialing solutions help in managing unpaid claims.
What Do Behavioral Health Billing Services Cover?
Behavioral health claims management goes beyond merely sending bills to insurance companies. The health care provider must determine the nature of the insurance for their patient, ensure all appropriate forms are completed, invoice, and then collect the payment.
Each step affects how the practice manages outstanding balances and billing issues.
The main responsibilities include:
- Insurance eligibility verification: Check for active coverage and benefits prior to scheduling an appointment.
- Prior authorization review: Determine which services need prior authorization and whether one exists for the patient.
- Medical coding: Apply proper codes based on the doctor’s documentation.
- Claims submission: Prepare claims and file them with the right insurance company.
- Payment posting: Record all insurance payments and adjustments as well as any payments made by the patient.
- Accounts receivable follow-up: Determine unpaid or partially paid claims and investigate the reasons for them
- Denial management: Manage payment determination process, fix billing errors, and submit appeals when necessary.
How One Billing Issue Can Affect Payment
Consider a therapy practice that schedules an appointment with a patient who recently changed insurance plans.
The front desk does not update the insurance information, and the billing team submits the claim to the previous insurer. The claim receives a rejection because the patient’s coverage ended.
The correct payor will have to be identified, the new policy verified, and the claim resubmitted. Should it come to light too late, the office offering the therapy will experience an issue with the timely filing of the claim.
A uniform billing procedure will help detect such issues.
Common Behavioral Health Billing Codes Providers Should Know
Behavioral health providers use various procedure codes based on the procedure performed.
The codes used for the procedures are called CPT codes whereas the codes used for the behavioral health diagnosis are termed as ICD-10-CM codes.
The information provided about the commonly used behavioral health coding system will help the organizations to review the claim forms and know whether further documentation is required for the procedure.
Common CPT Codes for Behavioral Health Services
These are common examples, not a complete list of billable behavioral health services. CMS identifies these codes in its Medicare mental health billing guidance.
Commonly used time increments for billing Medicare psychotherapy codes include 16-37 minutes for 90832, 38-52 minutes for 90834, and 53 minutes and above for 90837. In addition, the service being billed needs to satisfy the code requirements.
A visit of one hour does not automatically mean that CPT code 90837 is going to be billed.
If psychiatrists offer psychotherapy services in addition to evaluation and management services, different codes will be required.
Practices need to verify whether providers can bill the codes.
ICD-10-CM Diagnosis Coding
While CPT codes represent the nature of the service provided, ICD-10-CM codes represent the diagnosis for the disease condition or the reason for the encounter.
In such situations, the healthcare provider can make a diagnosis of the generalized anxiety disorder, major depressive disorder, or other mental illnesses.
The billing personnel should select the diagnosis code that is consistent with the evaluation of the patient rather than selecting the code based on the symptoms alone.
The CDC’s official ICD-10-CM resources provide the applicable diagnosis code sets and coding guidance. The FY 2027 codes apply to services from October 1, 2026, through September 30, 2027.
Behavioral Health Billing Errors That Delay Insurance Payments
When a provider renders the appropriate service, inaccurate claims can still cause payments to be problematic.
Some of the billing issues encountered in behavioral health billing happen before the claim is submitted; however, some of the issues only become clear after the insurance company has reviewed the claim.
Rejected Claims vs. Denied Claims
Each term denotes a different problem related to claim.
Rejected claims are those that have failed the test of either filing or processing at the start itself. This procedure requires the practice to sort out the problem and file the claim again.
Denials represent claims that have gone through the process of being processed by the payer but were denied by the insurance company as far as the payment of the service rendered is concerned.
In this regard, one example of such a claim is where there is lack of sufficient patient information in a claim that is denied before being processed whereas another is an uninsured claim that may be denied once processed.
How Practices Can Identify Repeated Errors
It is helpful to review claims individually, but repeated errors must be considered more closely.
If there are repeated denials for authorization, the process of how the authorization requirements were checked should be investigated.
Similarly, if there are multiple denials because of errors in provider information, the enrollment records or billing software needs to be updated.
Denial reasons must be kept track of, and each denial must be resolved.
How Accurate Behavioral Health Coding Supports Claims
Behavioral health coding aligns perfectly the nature of the services offered and the data that gets into the insurance company.
The claims have to be based on the service provided, the diagnosis in the documentation, and the criteria set by the insurer. In case of inconsistency, the billing department will have to collect more information.
What Should Behavioral Health Providers Document?
Documentation requirements vary by service and payer, but relevant clinical records may need to include:
- Reason for the patient encounter.
- Clinical assessment and documented diagnosis.
- Type of psychotherapy or other treatment provided.
- Actual treatment time when time-based coding applies.
- Treatment plan and clinical reasoning when required.
- Patient progress or response to treatment.
- Telehealth details or other service-specific information when applicable.
Example: A Psychotherapy Time Mismatch
Therapist bills for a 60-minute session, but gives only 42 minutes of psychotherapy.
Billing staff gets the bill for CPT 90837; however, the record reflects only 42 minutes of psychotherapy.
Considering that the service is subject to Medicare’s psychotherapy time ranges, 42 minutes would qualify for the time range for CPT 90834, not 90837.
Moreover, billing staff is expected to review records and seek clarifications rather than bill according to scheduled session time.
Guidelines from CMS also mention documenting psychotherapy time for time-based services.
Why Behavioral Health Reimbursement Requires Ongoing Follow-Up
The act of filing an insurance claim does not necessarily imply automatic approval for payment by the payer.
Some of the things that determine behavioral health reimbursement include active coverage, covered benefits, eligible providers, documentation, and payment policies among others.
Even an accurately coded claim may require further review.
What Happens After Claim Submission?
After processing a claim, the insurer issues payment information explaining the amount allowed, the payment made, applicable adjustments, and any patient responsibility.
This information is useful in payment posting by the billing department.
It is important for staff members to match the insurer’s response against the claim and determine any balances that need to be acted upon.
An example of such a case could be one in which the practice has filed a claim for a psychotherapy service that does not have any payment and requires more documentation.
In such a situation, the payer rejects the claim, and the practice needs to decide if the rejection is a basis for appeal or something else.
What Medicare Data Shows About Documentation Problems
According to CMS outpatient psychiatric care guidance, insufficient documentation accounted for 78.3% of improper payments identified for outpatient psychiatry services during the 2024 Medicare reporting period.
This figure does not represent the denial rate for all behavioral health claims. It concerns the causes of improper payments identified through Medicare’s review process.
This study shows the importance of full documentation for medical care, especially when insurance companies ask for paperwork in order to bill.
Practical Ways to Manage Outstanding Claims
Accounts receivable process of a behavioral health practice can revolve around the following key tasks:
- Identify the claims that have not been paid and the period for which each has been pending.
- Classify the claims into rejected, denied and processed claims.
- Analyze payer correspondence to understand the reason behind non-payment.
- Submit valid documentation of corrections and appeals by payer deadline.
- Verify the payments posted against the expectations.
The purpose of monitoring such activities is to know which claims require focus and which billing issues recur.
When Should a Practice Consider Outside Billing Support?
Not every behavioral health practice needs to outsource billing.
It is possible that a smaller clinic that has staffed personnel and an easily managed claims load can do their own billing. It is possible that a bigger clinic may require help.
The decision should depend on the practice’s workload and the problems staff are experiencing.
Signs Your Billing Process May Need Attention
- Unpaid claims continue to accumulate without regular follow-up.
- The same denial reasons appear across several clinicians.
- Staff struggle to reconcile payer payments with outstanding balances.
- Eligibility and authorization checks happen inconsistently.
- New clinician enrollment issues delay intended billing arrangements.
- Practice owners cannot easily identify which claims need action.
Before hiring an outside company, practice leaders should review their current workflow.
They could investigate patterns of claim denials, accounts receivable aging, responsibilities of the employees, and the number of claims that need correction.
The billing partner could help in claim submission, coding verification, denial management, payments posting, and enrollment, depending on the services provided.
The process should also consider the issue of billing charges, availability of the reports to the staff members, the communication process, and management of confidential information of the patients.
How New Hampshire Medical Billing Supports Behavioral Health Providers
Behavioral health practices require proper documentation of their billing processes, follow up on their claims, and information regarding unpaid claims.
New Hampshire Medical Billing identifies mental health billing among its specialties and provides services relevant to psychiatrists, therapists, counselors, and group practices.
These include audit services, coding services, eligibility services, claims process, denials management, payment posting, account receivable follow-up, and credentialing and enrollment.
Your medical practice will find the above services helpful in evaluating claim issues, identifying unprocessed claims, and finding out what needs to be changed in the billing process.
Whether you require help with administrative functions or revenue cycle management, evaluating your current billing problems is the right step to take.
Frequently Asked Questions
What are behavioral health billing services?
The behavioral health billing solutions are used by clinics to assist in handling insurance issues relating to psychotherapy, psychiatric assessments, and other behavioral health services that are covered by the insurance. The specific functions that will be included depend on the agreement reached with the clinics.
Which codes are commonly used for behavioral health services?
Some commonly used codes under CPT are 90791, which is for the assessment of psychiatric diagnosis, 90832 for psychotherapy that lasts 30 minutes, 90834 for psychotherapy that lasts 45 minutes, and 90837 for psychotherapy lasting 60 minutes. There are other codes for family and group therapy.
What causes behavioral health claims to be denied?
Common causes include missing authorization, services that do not meet coverage requirements, unsupported coding, provider enrollment problems, and filing deadlines. Practices should read the insurer’s denial explanation before deciding whether to correct the claim, provide more documentation, or appeal.
Why do behavioral health providers need credentialing?
Credentialing allows insurers or other organizations to review a clinician’s professional qualifications. Along with applicable enrollment and contracting requirements, it can affect network participation and billing arrangements. Providers should confirm their status with each relevant payer instead of assuming that a professional license alone establishes participation.
How can a practice follow up on unpaid behavioral health claims?
Start by checking the claim status and the insurer’s payment or denial information. Identify whether the claim is pending, rejected, denied, or partially paid. Then contact the payer, correct valid errors, provide required documents, or appeal when appropriate. Record each action and follow the relevant deadlines.
Behavioral Health Billing Support
Too Many Unpaid Claims? Let’s Get Your Billing Back on Track.
Repeated denials, missing authorizations, and delayed payments can leave your team chasing claims instead of supporting patients. New Hampshire Medical Billing can help your practice identify billing gaps, follow up on outstanding claims, and manage the revenue cycle.