Suppose you run a mental health practice. You have six therapists in your practice and have been running the business for over 5 years. However, last month you realized that your practice lost more than $15,000 in revenue. Now you know that this loss is not because of a lack of patience, but due to other preventable billing errors. To solve this crisis, you decide to get your billing audited. The results reveal claims with many outdated CPT codes, missing documentation, and even dozens of denied claims that are just sitting there and were not resubmitted.
This was a hypothetical scenario, but does this sound familiar? You’re not alone. According to many reports, over 80% of medical claims contain errors. Mental health claims are especially prone to these errors. Not only do denied claims cause significant issues, but in recent years, Medicare and other insurance providers have decreased the reimbursement rate for mental health services.
That’s why practices must submit each claim with care and avoid the common billing errors. We have created this guide to inform you about the most common billing errors and how to avoid them. So, let’s start.
Using Incorrect or Outdated CPT/ICD-10 Codes
Let’s do another scenario. Suppose you submit a claim for a 45-minute therapy session using CPT code 90832, which covers 16-37 minutes. But to your surprise, the insurance company rejects your claim. Why? Because the service does not match the CPT code. Billers make this mistake more often than you might think.
According to some estimates, 12% of medical claims contain inaccurate codes. Mental health providers specialize in dealing with these problems because most of the services are time-based, which makes CPT coding much more difficult. Common psychotherapy codes include:
- 90832: Psychotherapy (16-37 minutes)
- 90834: Psychotherapy (38-52 minutes)
- 90837: Psychotherapy (53+ minutes)
Now, it is the responsibility of billers to select the right time code. In addition to this, you must pair the CPT codes with relevant and valid ICD-10 codes. These codes justify the medical necessity of the service, and without them, your codes are sure to be rejected. When codes don’t match documented session lengths or services provided, it creates a paper trail that insurance companies scrutinize closely.
Inadequate Clinical Documentation
Not appending appropriate and comprehensive documentation with your claims is another big reason for claim denials.
With every claim, you must append all the relevant documentation. The documents and the physician’s notes that you provide must clearly justify the medical necessity of the provided service. Plus, the notes should also explain how the billed service code matches the diagnosis, and they must also follow payer-specific guidelines.
Do you know that documentation-related denials have increased by 35% in the past couple of years? So, any vague notes, missing treatment plans, or incomplete assessments can now eat up your revenue like fire.
Not only does incomplete documentation cause claim issues, but it also shows how inefficient your processes are.
Ignoring Denied Claims
What is worse than denied claims? Ignoring denied claims.
Yes, you read that right. Many healthcare providers don’t even bother to correct and resubmit denied claims. According to many reports published by various organizations, up to 35% of the denied claims are never resubmitted.
We accept that it takes about $25 to $118 to rework each claim. But when compounded over time, the cost of missing out far exceeds the cost of not resubmitting.
Dealing with denials is actually pretty simple.
- Assign specific staff members to review denials daily
- Create standard appeal templates
- Track denial patterns to identify systemic issues
However, the best solution is to simply outsource your operations to specialized revenue cycle management companies.
Failing to Verify Insurance Eligibility
Imagine providing weeks of therapy services only to discover the patient’s insurance had lapsed months ago. Believe it or not, but this actually happens a lot in mental health practices.
Eligibility verification errors are surprisingly common. How does this even happen? Well, many practices rely on initial verification at intake. But what they don’t realize is that the insurance status of patients can change in just a day. Job changes, plan modifications, and benefit updates happen frequently, making ongoing verification essential. However, you can outsource mental health credentialing services to third-party companies. Such companies help you get enrolled with insurance companies in your area and also help resolve insurance eligibility verification issues.
Take Action on Your Mental Health Billing
Remember, billing mistakes are just mistakes like any other. You don’t have to pay for them. We have tried our best to explain the common billing errors that mental health practices face and some tips to overcome them. Here’s a quick recap of the errors we discussed:
- Using Incorrect or Outdated CPT/ICD-10 Codes
- Inadequate Clinical Documentation
- Ignoring Denied Claims
- Failing to Verify Insurance Eligibility
Start with the mistake that’s costing your practice the most money, whether that’s updating your coding practices, improving documentation, or implementing systematic denial management. The best solution is to get help from outsourced RCM companies.
