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By: Stephen O'Connor

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February 14th, 2017

The Complete Guide to Medical Billing for Behavioral Health Practices

Medical Billing / RCM

Managers of behavioral health practices operate under unique and challenging circumstances when compared to other specialties. It’s often a much more complicated affair due to the nature of the patient population being served as well as the way these patients receive insurance coverage.

Consider that “Public services are funded through a large number of categorical programs administered by different agencies, creating both duplication and gaps in service, and these programs almost always have different eligibility requirements,” according to Managing Managed Care: Quality Improvement in Behavioral Health from the National Academies of Science Engineering Medicine. “In addition, funding is fragmented, which leads to fragmented service delivery.”

Another complicating factor is that many recipients of behavioral health services, receiving help for substance abuse and mental health disorders, obtain medical treatment in primary care facilities rather than in specialty programs where they would receive more comprehensive care.


Is in-house or outsourced medical billing the best option for your practice? Our ebook covers all you need to know about making the decision.

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Additionally, people suffering from severely disabling behavioral health problems while being treated through the public care system typically require additional services, ranging from rehabilitation and support programs to job training, literacy instruction, and other related forms of assistance.

The result is healthcare providers expending more time and resources as they coordinate patient care, and this time could actually be put to better use. This is why it is so vital for behavioral health practices to seek out streamlined billing solutions that can help them simplify all processes related to patient care, including coordination with other service providers.

Medical Billing with Behavioral Health Revenue Cycle Management Software

Behavioral Health Revenue Cycle Management or RCM software is a specialized application developed specifically for practices that treat patients for behavioral issues. It helps practices handle claims, process payment, and generate revenue better than using a generic billing application.

It simplifies billing and collection cycles, which means your revenue cycle should speed up, improving your bottom line. RCM software also serves to bridge the gap between electronic health record or EHR software and accounting systems.

Using In-house RCM Software

If you have limited familiarity with using in-house RCM software, a bit of an introduction is in order, concerning its advantages and drawbacks.

Each behavioral health practice will have its own unique set of circumstances, patient population, and medical professionals to take into account when evaluating the potential in-house deployment of Revenue Cycle Management software.

One of the chief advantages of in-house RCM is the potential for a healthy return on investment. This is a factor when your practice has been in business for many years and you have already allocated sufficient resources toward purchasing and installing the application and then on staff training. Another advantage is that if something should go wrong with billing, you can work on the problem locally instead of dealing with a third party billing services firm.

Behavioral health practice managers who prefer to have more financial control over their operations often turn to in-house RCM software.

Drawbacks of using RCM software in your practice include financial liabilities because of the potential for greedy, unscrupulous employees to embezzle from you. Employees who are careless may leave sensitive information in plain view for unauthorized people to access, which is a major breach of privacy that you must strive to avoid.

If you are short on staff to begin with and then a member of the billing department goes on vacation, falls ill or is terminated, the results could be a disaster for your cash flow.

Outsourcing RCM to a Medical Billing Services Provider

For many owners and managers of behavioral health practices, it makes perfect sense to outsource their medical billing.

Managing your medical collections can be a major burden on your time and staff resources. The complexity of coordinating care for behavioral health patients simply adds to the work that must be done. Another thing to keep in mind is that by outsourcing these tasks, you remove accountability from your staff. If a member of your team makes a crucial error in ICD coding or in other important data, the penalties will be your responsibility.

But outsourcing this work shifts the burden to the third party staff. Since they have much more training and spend more time on RCM processes than your own internal team could ever hope to achieve, the experience levels and knowledge they possess will outstrip the capabilities of your own staff.

You can therefore move your focus from RCM tasks and devote more energy toward engaging with your patients.

Costs are typically easier to control too, when you outsource RCM.

Benefits of Outsourcing for Your Behavioral Health Practice with a Specialty-specific RCM Service

As your behavioral health practice grows over the years and you expand your patient pool as well as the number of healthcare professionals providing services to them, it can be difficult to keep staffing levels at the right amount to handle your billing.

Behavioral health services medical billing can be more complicated due to the fractional nature of services that must be coordinated. When work in this area exceeds your staffers' normal capacity, many managers of these practices turn to outsourcing their billing to a specialty-specific RCM service.

General Benefits of Outsourcing:

  • Maximizes Productivity
  • Enhances Patient Engagement
  • Reduces Operational Costs
  • Eliminates Administrative Burdens

Specialty-Specific Benefits

Cutting out the administrative burdens that come with medical billing is just one benefit when you outsource to a third party RCM company. What’s more, going with a specialty provider reduces staff errors, since they will have undergone a lengthy training process and have more experience working with billing than your internal team could ever hope to amass.

As the owner or manager of a successful behavioral health practice, you would be right to do your due diligence as you investigate the merits of going with a specialty-specific RCM firm.

Inpatient, outpatient, or a combination of services are easier to bill for when you turn this over to experts who spend every day focusing on the revenue details of behavioral health practices.

From instantly knowing the correct ICD-10 code to use for a patient to maintaining high standards for getting paid on the first submission of a claim, you can count on the third party to speed up the flow of revenue while giving you access to the analytics your team needs for reports on all aspects, financial and otherwise to describe your operations.

What to Look for in a Provider

It pays to take your time when evaluating potential providers for your outsourced medical billing. Before you make a decision, check to see if the provider has the following qualities and abilities:

  • Make sure they offer specialty-specific behavioral health solutions. Failing to understand the complexities of billing for this specialty can lead to unnecessary delays.
  • By all means, verify that the company has significant experience in the medical billing industry and a proven track record of improving the revenue cycle for the practices they serve.
  • Your provider should also have a policy of keeping up with trends in the industry, so you can ensure that your practice is consistently using cutting-edge technology for RCM.

Another important factor is that the company will provide adequate training to staff. Insufficient training leads to more mistakes, which will further slow down the flow of revenue in your organization.

Finally, and perhaps most importantly, you must be assured that the provider will keep the lines of communication open. You want them to contact you immediately in case of a problem, and they should respond quickly to any inquires you have regarding bills and provider reimbursement.

Working in behavioral health has its own unique set of rewards for the medical professionals who devote their lives to helping this vulnerable segment of the population. In order for your staff to do their very best, it makes sense to outsource revenue cycle management services to a third party, putting less strain on your internal resources.

In the long run, outsourcing has so many benefits, you can envision expanding your practice much sooner than your business plans initially called for, since third-party billing experts will be taking care of RCM for you while you focus on patient care.

Key Takeaways

  • Behavioral health practices have unique challenges when it comes to billing.
  • Many patients receive services from multiple agencies, making it harder for health care professionals to coordinate care, and therefore to deal with billing.
  • Your practice can streamline work better by using a behavioral health practice-oriented revenue cycle management application as compared to generic RCM software.
  • In some cases, especially when you are seeing a period of high growth in your organization, it makes sense to outsource your RCM tasks to a third party.
  • It’s best to go with behavioral health-specific RCM companies, since they will know all the intricacies of your niche.

For more information on the benefits of RCM outsourcing, download our “Complete Guide to Medical Billing Services” ebook.

The Complete Guide to Medical Billing Services

About Stephen O'Connor

As a Director of Digital Marketing at Advanced Data Systems Corporation, Stephen spends his day's planning, writing, & designing resources for the modern healthcare professional. He has a strong affinity for snow crab legs, the ocean, and Rutgers Football.

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