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Stephen O'Connor

By: Stephen O'Connor on August 1st, 2024

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The Complete Guide to Medical Billing for Behavioral Health Practices

Medical Billing / RCM

Mental health billing can be significantly more complex than general medical billing. From recurring appointments to time-based coding and payer-specific rules, behavioral health providers face unique administrative hurdles. Getting paid correctly—and on time—requires a deep understanding of these nuances, along with a systematized approach to documentation, coding, and insurance verification.

Whether you’re a solo therapist or part of a larger behavioral health group, mastering these billing fundamentals will improve revenue cycle efficiency and reduce claim rejections.

What Makes Mental Health Billing Unique?

Unlike general healthcare services, mental health treatments are often ongoing, subjective, and time-intensive. Sessions frequently span 30 to 90 minutes and may happen weekly or even more frequently. This recurring care model requires a different approach to documentation, coding, and claim tracking.

Mental health billing is also more sensitive to insurance variability. Many insurance plans subcontract behavioral health benefits to third-party administrators or impose session limits and pre-authorization requirements.

Key differences in mental health billing include:

  • Services are often time-based (e.g., 45- or 60-minute psychotherapy).

  • Session frequency can result in higher claim volume per patient.

  • Insurance coverage rules vary more widely than for physical health services.

  • Documentation standards are stricter due to the subjective nature of care.

These factors demand a billing process that’s highly accurate, consistent, and responsive to payer-specific requirements.

Mastering Mental Health Billing Codes

Accurate coding is at the heart of successful billing. Behavioral health providers rely on specific CPT and ICD-10 codes that must align with the services delivered and the patient’s documented diagnosis. Time-based codes are particularly sensitive to discrepancies in progress notes.

Common CPT codes in mental health billing include:

  • 90791 – Psychiatric diagnostic evaluation (no medical services)

  • 90832 – Psychotherapy, 30 minutes

  • 90834 – Psychotherapy, 45 minutes

  • 90837 – Psychotherapy, 60 minutes

  • 90853 – Group psychotherapy

  • +90836 – Add-on for interactive complexity (if applicable)

Using the wrong code—or mismatching it with your documentation—can result in immediate claim rejection. Referencing trusted sources like the American Medical Association’s Behavioral Health Coding Guide can help maintain coding accuracy.

Insurance Verification and Pre-Authorization

Before providing care, verifying a patient’s insurance coverage is a vital first step. Mental health coverage can differ significantly from general medical coverage, and it’s not unusual for a patient’s behavioral health benefits to be administered by a separate entity altogether.

Effective insurance verification involves confirming session limits, co-pays, deductibles, and whether pre-authorization is required. If pre-authorization is needed, you’ll want to obtain it before the first appointment to avoid billing issues down the line. Consistently applying this verification process helps minimize denied claims and avoid billing patients for services they assumed were covered.

 

The Importance of Documentation in Mental Health Billing

Detailed and timely documentation supports not only billing but also quality care and compliance. Most insurers require that progress notes justify the billed code, especially for longer sessions like those billed under 90837.

Strong documentation should include:

  • The duration and modality of the session (e.g., individual, group, telehealth)

  • Patient symptoms and clinical updates

  • Therapeutic interventions used

  • Connection to the treatment plan and diagnosis

  • A justification for the session length, if it exceeds standard time

Poor or vague documentation is a common trigger for audits and denials. The SAMHSA documentation guidance offers a useful baseline for mental health providers.

Optimizing Your Mental Health Billing Workflow

Streamlining your billing workflow can reduce administrative stress and improve cash flow. This begins with standardizing front-desk procedures such as intake, eligibility checks, and prior authorization tracking. Electronic health record (EHR) systems that are designed specifically for behavioral health can support these workflows by integrating scheduling, charting, and billing into a single platform.

Staff training is also key. Keeping your administrative team updated on coding changes, payer requirements, and documentation standards empowers them to handle billing issues efficiently and confidently.

Monitoring claim denials and analyzing their causes can also reveal recurring errors—whether it's a coding mistake, missing documentation, or issues with payer-specific rules. Correcting these patterns helps reduce the volume of rework and unpaid claims over time.

If you're considering technology to support your billing process, platforms like ADSC’s Behavioral Health EHR offer tools specifically tailored for mental health providers, helping automate key steps and maintain compliance.

 

Explore More Tools to Simplify Mental Health Billing

Managing the billing process doesn't have to be overwhelming. If you're looking to streamline workflows, reduce denials, and ensure accurate claims, the right technology can make all the difference.

📘 Visit the Behavioral Health EHR Resource Center to explore guides, tools, and software options designed to support mental health providers in every aspect of billing and documentation.


Frequently Asked Questions (FAQ)

How does mental health billing differ from standard medical billing?
Mental health billing is more reliant on time-based codes, recurring visits, and insurer-specific documentation. It often involves separate benefit plans and more stringent justification of services.

What are the most common billing codes for therapists and psychologists?
Codes like 90791, 90834, and 90837 are widely used. 90853 is often used for group therapy, and add-on codes (like +90836) are applied for interactive complexity.

Why do mental health claims get denied so often?
Reasons include incorrect or missing codes, documentation that doesn’t support the service, expired authorizations, or benefit plan restrictions.

Are teletherapy services covered the same as in-person visits?
Most insurers now reimburse for teletherapy, but coverage varies. Always confirm with each payer and use correct modifiers (e.g., 95 or GT) and place-of-service codes.

What can I do to improve billing success?
Verify insurance before appointments, document thoroughly, stay current on coding changes, and use billing systems built for behavioral health.

 

About Stephen O'Connor

Stephen O'Connor is the Director of Brand and Digital Marketing, responsible for many aspects of Advanced Data Systems Corporation’s (ADS) marketing, including product marketing, customer acquisition, demand generation, brand, brand design, and content marketing.

Stephen has more than 20 years of healthcare industry experience. Prior to ADS, Stephen spent 11 years at Medical Resources Inc. (MRI), most recently as the Manager of Marketing & Internet Services, where he and his teams were responsible for all marketing efforts and the market positioning of MRI’s services.

Stephen spends his day's planning, writing, & designing resources for the modern healthcare professional.