Top Five Reasons Your Mental Health Billing Claims are Denied


Guest Writer: Racheldawn Dewitt, Professional Mental Health Billing Specialist

No matter how much experience your medical billing specialists have, denials and rejections will always be a part of your billing cycle. However, there are ways your team can eliminate the simple rejections and “easy denials.” The more efficient your team is with the reprocessing of these denied claims and sending original clean claims, the faster your insurance reimbursements will follow.

1.) Verifying Mental Health Coverage

Prior to your client’s first initial evaluation with your provider, verifying the patient’s coverage is crucial. Clients are not always aware of what their insurance covers. Calling on verification can provide documentation of coverage with a simple reference number. This can be a point of reference when needing to fight more difficult denials. Remember to inquire about certain CPT codes, such as your specialty services (i.e. IOP, TMS, Group Therapy, or Family Counseling).

2.) Prior Authorization

While most insurances no longer require prior authorizations for behavioral health (mental health) coverage, some out-of-state plans and specialty services may still require them. Asking if prior authorization is needed during the verification process is a valuable step. This will benefit your clean claim process by sending your original claim with the authorization and, in turn, resolving the possibility of a future denial or rejection.

3.) Client Demographics

Rejections can be received either from your clearinghouse or from the insurance company. Correct client information will remove the likelihood of a simple rejection. It is imperative that the client name on the insurance plan reflects in your client demographics. This is the name that shows up on the claim. Some practice management systems offer a place to keep nicknames that your staff can manage and not file onto your claim.

Another key client demographic to pay attention to is the subscriber information. Correctly identify name, date of birth (DOB), sex, and address and policy number if they differ from the client’s .

4.) Provider Credentialing

If your clinic providers have different levels of licensure and your clinic takes medicare/medicaid plans, some of your providers’ licensure levels will not accepted. It is important to place your clients with providers that the client’s insurance covers. For example, from this list of license levels, CMS states that a Licensed Professional Counselor (LPC) is unable to take a medicare plan. This includes medicare replacement plans.

Properly placing clients will not only remove the risk of denials for this reason, but will decrease your adjustments for sessions not covered. If your client is incorrectly placed with the a provider, financial responsibility can fall back on the client or even increase your providers’ adjustments.

5.) NCCI Edits

This type of denial or rejection can be fairly common in clinics with varying levels of licensed providers. Clients who see therapists and medication management providers on the same day can have some confusing billing. For example: Client brings family into a medication management/psychotherapy session for a brief period of time and the provider codes 90847 with a timed CPT code (90834). These codes are mutually exclusive, and in most cases, will produce a denial.

There are ways around these types of denials that can still produce a reimbursement. Adding the correct modifier to the claim will normally fix this case. If you are still experiencing denials after applying the appropriate modifiers, there are appeal processes and corrective claims that will allow reimbursement if done properly.

Any type of denial or rejection delays a proper reimbursement timeline for your claim. Too many delays willl create a dip in your monthly receipts and can cause harm to the profit of your clinic. It is imperative that your billing team has the knowledge to quickly and correctly identify these simple rejections or “easy denials” prior to sending out your claims. Creating audits within your practice can encourage attention to these details and increase your time for reimbursement.

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