Mental Health Billing vs. Medical Billing

How does mental health billing differ from medical billing?

Mental health billing differs from medical billing in the following ways:

• Preauthorization: Payers often require that patients preauthorize mental health services before filing medical claims. However, one report found that mental health visits are six times more likely to be out of network than primary or specialty care. Unfortunately, preauthorization ― even if sought on a timely basis ― is rare and that makes for more complicated billing.
• Front office staff: When opening a private medical practice, doctors might hire administrative staff to handle billing and coding, leaving practitioners to focus solely on patient care. This arrangement is less common in mental healthcare practices. Often, these practices are sole proprietorships or business partnerships, meaning they lack front office employees. Without extra staff, practitioners must handle billing themselves. [Read related: The Sole Proprietorship Tax Guide]
• Standardized billing procedures: While primary care physicians often run similar tests and exams on their patients, mental health practitioners offer highly varied and customized services. The repetitive nature of primary care means that medical billing is often plug-and-play, although still tedious. The opposite is true for mental healthcare, making for more complicated billing.
• Superbill creation: The standardization of primary care means that practitioners can easily combine many services into one superbill. The more variable nature of mental health services, on the other hand, makes superbill creation much more challenging. The result is a longer, more arduous billing process.

How standardization (or lack thereof) affects mental health billing

Of the above factors in mental healthcare billing, standardization in provided services is perhaps the most pressing obstacle. Standardization concerns stem from how these factors vary compared to primary or specialty care:

• Session length: Medical billing assumes roughly the same amount of time per patient encounter ― after all, bloodwork and routine physical exams only take so long. The length of mental health sessions, however, can vary tremendously. Because of this, mental health billing codes differ based on session length, which is unheard of in medical billing.
• Daily or weekly service limits: Generally, primary or specialty care does not limit how often a patient can receive treatment. The same does not apply to mental healthcare. In hopes of standardizing mental healthcare billing, payers have instituted the maximum number of treatments a mental health patient can receive per day or week. These artificial ceilings can pose billing challenges.
• Therapeutic method: Cognitive-behavioral therapy requires an entirely different Current Procedural Terminology (CPT) code than psychoanalysis. This distinction holds true no matter what the patient’s (International Classification of Diseases, 10th update) (ICD-10) codes are. (The ICD-10 vs. CPT distinction is explained below.) The result is more challenges in billing.

How do you bill for mental health services?

Follow these steps to bill for mental health services.

1. Understand the difference between ICD-10 and CPT codes.

Both medical and mental health billing require the use of ICD-10 and CPT codes. The latter is more important because ICD-10 codes indicate the patient’s diagnosis while CPT codes denote how you’re treating the diagnosis. You can’t bill payers for a diagnosis but you can bill them for your treatment services.

The ICD-10 book includes more than 200,000 codes. There are even more CPT codes, but mental health practitioners will primarily use the codes that start with the digit 9. These codes, which are always five digits, pertain to mental health testing, assessment, psychiatry evaluation and management (E/M), case management and telehealth. Some telehealth codes will begin with G instead of 9.

Notably, the length of a patient encounter changes the CPT codes you’ll use, which isn’t the case for standard medical billing. CPT code 90834 signifies a 45- to 55-minute session while anything longer gets the CPT code 90837. Coding your services properly based on length makes for an easier billing process. 

2. Familiarize yourself with E/M and psychiatric evaluation codes.

The many CPT codes that you should know should fall into two categories:

1. E/M codes: You’ll use these codes in your billing when evaluating a new patient issue. Each E/M code requires the below three documentation elements.

• History: Here, you’ll indicate the patient’s current diagnosis, system review and family and social history.
• Examination: Here, you’ll detail the patient’s history, current issue and the exams you’ve performed.
• Medical decision-making: Here, you’ll state how many diagnoses were given and how many treatment methods were administered during the patient encounter. You’ll also list any potential complications and explain the complexity of the patient’s data.

2. Psychiatric evaluation: If your psychotherapy session also includes psychiatric elements, you’ll need to bill and code these elements separately. Notably, any time devoted to psychiatric evaluation cannot count toward your time spent providing psychotherapy services. For example, if you spend 50 minutes on psychotherapy and 10 minutes on psychiatric evaluation, you’ll use CPT code 90834 instead of 90837.

3. Verify the patient’s insurance benefits.

Once you’re familiar with the ICD-10, CPT, E/M and psychiatric evaluation codes relevant to your services, you can formally begin the billing process. The first step is to verify the patient’s health insurance by conducting a verification of benefits (VOB) before their first visit. To do so, obtain a copy of the patient’s insurance card. Then, log in to the insurer’s provider portal and determine whether the patient’s insurance covers your services. If no portal is available, call the insurer.

4. Know which billing form to use.

In both medical and mental health billing, you’ll likely encounter two billing forms: UB-04 and CMS-1500 ― also known as Form HCFA. If you employ front office staff, they will use the UB-04 form while practitioners will fill out CMS-1500.

In either case, you should have your National Provider Identifier and tax identification number readily available. You should also understand the type of information required in each section of the form because various payers may require different information.

Best practices for billing mental health services

Following these best practices for your mental health billing will make the tedious process more bearable.

1. Always conduct a VOB.

The importance of the VOB process can’t be overstated: The small amount of time you take early to verify your patient’s benefits can save you hours of work later. When your clients know what their insurance will ― or won’t ― cover, they are prepared better to make those payments promptly.

2. Make and store copies of insurance cards.

The mental health billing process is based on the data on your patient’s insurance card. This information will tell you how to seek and receive payment for your services, so if you get it wrong, you’ll face delays in receiving revenue. When you have copies of your patients’ cards on file, you minimize the chances of such errors. We also recommend saving copies of any forms you file, including invoices and superbills.

3. Collect abundant information.

In the mental health billing process, there’s no such thing as gathering too much information. Request as many facts as possible, including the patients’ full legal names and current addresses. This way, you’re more likely to avoid billing delays.

4. Take notes during and after insurance communication.

When payers speak with you, they’ll give every conversation a reference ID and indicate the representative with whom you’ve spoken. You should do the same ― ask your contact for the reference ID and their name. This way, if you have to contact the payer again (and you almost certainly will), you’ll have a traceable record of all billing steps you’ve taken to date. This process improves accuracy and streamlines future billing.

5. Don’t delay the billing process.

The billing process can be frustrating, especially when treating patients is your purpose. However, the sooner you start, the sooner you get paid. If you’re worried you can’t complete the process solo, the billing features in the best medical software platforms or third-party medical billing services can provide invaluable help.

The best medical billing services

Practitioners have the option of outsourcing revenue affairs to one of the best medical billing services. We recommend the below vendors:

• CareCloud: Choosing CareCloud for your revenue cycle management means that you can outsource some or all of your billing needs. Plus, CareCloud is the rare vendor that doesn’t require you to use its practice management software if you use its billing services. Explore this highly user-friendly and customizable service via our in-depth CareCloud medical billing review.
• DrChrono: This medical billing provider offers bundle codes for common mental health diagnoses, such as attention-deficit/hyperactivity disorder and depression. Additionally, unlike some medical billing services, this vendor doesn’t charge implementation fees. Learn why this vendor is a great choice for quickly getting started via our detailed DrChrono medical billing review.
• athenahealth: If you want to make smarter financial decisions for your mental health practice, athenahealth can help. This billing provider handles your claims and payments while consulting with you on ways to improve your bottom line. Dive into this vendor’s data-based approach via our comprehensive athenahealth medical billing review.
• AdvancedMD: This platform displays only relevant mental health billing codes, streamlining your revenue cycle management. Plus, if you also sign up for AdvancedMD’s medical software, you get templates that streamline your mental health assessments, diagnoses and treatment plans. Our AdvancedMD medical billing review offers more insights into why this service is a great choice.
• Tebra: This vendor provides intuitive software that tracks your third-party billers’ work. Plus, since Tebra offers medical billing services through third-party providers, it’s especially easy to outsource only part of your revenue cycle management with this vendor. Learn more via our complete Tebra medical billing review.

Mental health billing made easy

Getting paid for your mental health services shouldn’t be a burden on your own mental health. However, the process doesn’t have to be bothersome ― learn how it differs from standard medical billing, then outsource your revenue cycle management. You’ll put yourself in a position to worry less about money and focus on what matters the most: the people you help every day.