Mental Health Billing vs. Medical Billing: What's the Difference

Mental Health Billing vs. Medical Billing: What's the Difference

Mental illness is one of the most prevalent health concerns. 1 out of every 8 people around the world live with a mental disorder. Types of mental disorders greatly vary, but effective prevention and treatment options exist to improve quality of life for those suffering.

Mental healthcare providers often go into business to provide this effective prevention and treatment and help others live happy, healthy lives. With about 50 million Americans being affected by mental health concerns, mental health providers make an incredible impact on those they work with.

Unfortunately, this mission to help others can be disrupted by the tedium and challenges of mental health billing. The time-consuming process of researching and navigating confusing billing regulations causes providers in the healthcare industry to lose profits, money, and valuable time with patients.

NCDS Medical Billing has vast expertise in the mental health billing space. Read on to understand the differences between medical and mental health billing, and simplify your practice’s mental health billing efforts.

What is Medical Billing?

Medical billing is the process of submitting and tracking claims for services rendered to patients by healthcare providers.

At its core, medical billing is how healthcare providers and provider organizations receive payment for medical services. The medical billing process is made up of the steps that providers take and the policies accounted for to create healthcare claims for submission to insurance companies.

Within the medical billing process, providers have to convert healthcare services into billing claims that are written and coded properly for processing. Medical claims must be submitted so that providers and practices are paid for the work that they’ve performed.

Challenges in Medical Billing

56% of providers have seen their accounts receivable increase in 2022.

MGMA Stat results for Accounts Receivable recent changes

There are many reasons for this recent increase in accounts receivable. The following top 5 challenges lead to this recent increase:

1. Staffing for billing / collections
2. Increased prior authorizations and claim denials
3. Increased need for documentation as well as increased coding time
4. New providers getting ramped up on EHR and needing time to learn the ropes in order to send out claims
5. Credentialing issues

For tips on improving collections and reducing these common medical billing issues, check out 5 Easy Steps to Improve Your Patient Revenue Collection.

What is Mental Health Billing?

Mental health billing refers to the submission and tracking of claims for services rendered to patients with mental or behavioral health diagnoses.

The nature of mental health services creates an additional layer of complexity when it comes to billing and receiving payment, and mental health billing is overall more difficult than medical billing. This increased difficulty is largely because of service variation not found in primary or specialty care.

For example, in medical billing, patients and insurers receive bills for specific treatments such as lab tests. However, in mental health the way patients and insurers are billed has great variance. Insurers have different rules about what they’ll cover based on attributes such as length of session, frequency, treatment maximums, and more.

Typically, mental health patients and insurers receive bills for treatments such as therapy, psychological testing, and medical management. The biggest challenge of mental health billing is that it’s not uncommon for the mental health needs of a patient to be larger than the services that the insurer will cover.

Because of this imbalance between the services needed and the services insurers will cover, creating a balanced treatment plan that has a sound reimbursement strategy can be a difficult challenge for mental health providers.

Types of Mental Health Billing

Within the overarching category of mental health billing are four major billing categories. Within each of these categories, each has a set of CPT (Current Procedural Terminology) codes. CPT  codes are comprehensive of many services and treatments offered.

For example, PsychCentral shares a recent list of psychotherapy codes, which provide a great example of the nuance and difference between various CPT codes. Additionally, CPT codes can change over time as different rules and regulations are updated, unused codes are disposed of, and new codes are developed for new services.

Psychotherapy Billing

Psychotherapy billing can be among the most complex due to its intricate and unique nature of what patients need. Whether mental health sessions have multiple components or the patient is a part of a residential program, there can be additional factors to take into consideration when billing.

Therapists must consider various aspects for proper coding for their psychotherapy services that include timing, testing, assessment, crisis codes, and any other add-ons.

Psychiatric Billing

In the mental health space, psychiatrists share the most similarities with traditional medical providers.

To bill properly, psychiatrists must know both mental health CPT codes and psychiatric diagnostic evaluation codes.

Behavioral Health Billing

Behavioral health billing has many areas in common with psychotherapy billing, but has more of a focus on social services. Behavioral health billing can include community social workers, behavioral specialists, or other experts which add another layer to take into consideration when coding.

The AMA’s Behavioral Health Integration Webinar Series feature on Billing and Coding

Substance Abuse / Facility Detox Billing

Substance abuse facilities manage widely varying situations with heavy complexity. Due to regulations, laws, and insurance challenges, substance abuse billing can be very difficult. The sensitive nature of substance abuse treatment can also provide challenges.

There are multiple sources to check for substance abuse codes, and regularly changing regulations. The nature of substance abuse and facility services create very unique billing procedures.

The Importance of Mental Health Billing

Though mental health billing is complex, mental health needs are greater than ever. As a result of modern day stressors, living costs, and the COVID-19 pandemic, people globally have seen large impacts to their mental health.

OECD data showing the staggering impacts of COVID-19 on mental health worldwide.

As demand and need for mental health services increase, mental health providers will need to ensure their billing practices are in place to support their revenue cycle management.

How do Mental Health and Medical Billing Differ?

Mental health billing and medical billing are two very different processes, with mental health billing overall being more complex and challenging than medical billing.

The two types of billing have key areas of differences. As mentioned above, the nature, complexity, and variability of mental health services lead to challenges with receiving payment for mental health care.

With mental health visits being five times more likely to be out of network than primary or specialty care, it’s important to understand these differences for an effective mental health billing process.

Pre-Authorization

Payers typically have a pre-authorization requirement. Mental health services are often required to be pre-authorized ahead of time, before the claims are filed.

Mental health billing becomes more challenging because oftentimes, gaining pre-authorization is unlikely with mental health claims.

Standardized Billing

Healthcare professionals often have similar tests, exams, and procedures that they run on their patients. There are often repeated services, with more consistent and repetitive medical billing. Mental health professionals on the other hand provide diverse and unique services, creating a more complicated billing process.

Overall, this leads to less standardization in mental health billing than with medical billing.

Standardization challenges in mental health billing include:

Service Limits

With medical practices, there are not usually limits for the frequency of patient visits. However, for mental health providers, insurers often implement a treatment daily or weekly maximum. These service limits create mental health billing complexity.

Method of Treatment

There are varying CPT codes for the therapeutic method that is used by the provider. For example, psychoanalysis has different coding than behavioral therapy. The high variance in coding and breadth of therapeutic treatments available requires a high level of expertise.

Session Length

Medical practices often have similar timings for the length of sessions. Medical billing, as a result, often operates with this assumption. However, with mental health providers, sessions have incredible variance. Coding for mental health billing is then impacted based on the length of sessions with providers.

Superbills

The standardization of medical health practices leads to the possibility of superbills in medical health billing. With these standardized procedures, services can simply be combined into superbills.

Mental health services often are not compatible with superbills due to the dynamic nature of mental health practices. Without superbills, mental health billing is typically a longer, more complicated billing process.

Staffing

Medical providers typically have a front-office staff that manages the medical billing and coding. With this setup, medical practitioners can keep their focus on caring for patients. Mental health practices often don’t have this convenient setup.

Many mental health providers are either small partnerships or sole proprietorships, and don’t have the staff for front-office employees. With this staffing difference and without a dedicated employee to focus exclusively on mental health billing, mental health practitioners often manage both patient care and billing themselves.

How to Bill for Mental Health Services

Billing for mental health is challenging - but there are methods to improve your revenue cycle management and maximize revenue.

Mental Health Billing Best Practices

Collect and Confirm Patient Information

Incorrect patient information leads to denied claims and decreased revenue, as well as time wasted fixing errors.

Proactively confirming patient data at the beginning of each appointment ensures that your practice has all the necessary information to send bills, request payments, and share communications.

The following information should be gathered from a patient’s first appointment, and confirmed in all subsequent appointments:

• Name
• Address
• Phone number
• Email address
• Insurance information
• Emergency contact
• Photo ID

Continuing to confirm this information keeps you up to date on any changes in patients’ lives, such as a move, marriage, or insurance change.

Confirm Benefits and Insurance Eligibility

Anytime a practice takes on a new patient, before treatment begins it’s important to understand everything about the patient’s coverage and payment options. Determining what is covered, what isn’t, and what limitations exist for the patient’s payment plan is absolutely necessary.

The key to confirming insurance eligibility and gauging the full picture of a patient’s benefits is to gather all the information necessary to determine a game plan for how the patient’s care will be paid for.

There are two major things to look for when confirming coverage:

1. An active policy with accurate coverage information
2. Benefits included in the policy

Create a Telemedicine Billing Plan

As a result of the COVID-19 pandemic, telehealth has exploded for mental health services and this trajectory is expected to continue, with the telemedicine market expected to hit $324.38 billion by 2030.

KFF Data shows the prominence of telehealth with mental health and substance use disorder visits.

Insurance regulations to support telemedicine have been regularly evolving with this increased popularity. With more and more services being available via telehealth, insurer rules and regulations change to best accommodate both patients and providers needs with their policies.

With these constant changes in telehealth and its insurance policies, practices must keep on top of these policy updates to support the latest needs.

Learn Mental Health Billing Codes

Mental health billing has its own set of billing codes with CPT. These codes are used for billing and coding in insurance claims, and there are many specific codes that mental health practitioners must use to properly identify the services provided.

Learning these codes and when to apply them is vital to getting claims paid for mental health providers.

Common mental health CPT codes include:

• 90832 - Psychotherapy, 30 mins
• 90834 - Psychotherapy, 45 mins
• 90846 - Family or couples psychotherapy, without patient
• 90847 - Family or couples psychotherapy, with patient

Effectively Manage Denied Claims

When claims are denied, practices see decreases in their revenue and cash flow. In 2021, MGMA found that 69% of healthcare leaders saw an increase in denials. Preventing and managing denials creates a healthier revenue cycle management for mental health practices.

MGMA data on denials

Creating a plan for clean claims and for denial management relieves the stress of denials, and brings more revenue into practices. Ideally, only clean claims are submitted, but denied claims are inevitable.

Our top denial reduction tips include:

1. Determine most common reasons for denials in your practice, and address the root causes
2. Determine prior authorization
3. Quality check every single claim prior to submission
4. Ensure all dedicated staff are educated and trained about billing processes
5. Follow up with fixed denial submissions

In addition to these tips, we have other resources for achieving clean claims and managing denials:

• Top Tips for Clean Claims
• Denial Management Guide

Partner With a Mental Health Billing Expert

With the shifting policies and complex nature of mental health billing, making sure your private practice gets paid in full while providing top notch care to patients can be challenging.

Contact NCDS to learn more about how we can partner to improve your practice’s revenue while ensuring you can focus on the work that matters most: your patients.

Questions?