How Is Mental Health Billing Different From Medical Billing?

How Is Mental Health Billing Different From Medical Billing?

For any typical practice, medical billing is almost assuredly a time-consuming, labyrinthian, and frustrating process with plenty of room for errors. Often, the paperwork required to run a sustainable practice can quickly become overwhelming without the proper help. Medical specialists either build themselves a full team to handle billing concerns or outsource the work to medical billing companies.  While these issues hold true for both standard medical practices as well as mental health practices, the bureaucratic needs are often more severe and harder to manage for the latter.

Why is Mental Health Billing so Different From General Medical Billing?

Insurance companies dictate much of how mental health services are provided as well as how often.  The limit on therapy sessions, for example, creates a financial ceiling that doctors performing ear exams or x-rays don’t experience. These burdens can severely limit a practice. To use a case-study: It was found some years ago that pediatricians were typically able to bill up to 10 different billing codes for medical visits, but only 1 code for behavioral health visits.


Mental health practitioners are also operating with smaller staff and leave quite a bit more money on the table due to their inability to properly manage all of their billing needs. Some estimate that as much as over 80% of the money owed to mental health practitioners by insurance companies goes uncollected. Looking at those numbers, It makes sense that mental health billing and behavioral health billing needs are beings outsourced more often than ever these days.

The Value of a Simpler Billing Process
There are a lot of ways that simplifying the billing process with medical billing companies benefit medical and mental health practices. Most understand that less time spent dealing with billing means more time spent with patients and growing a practice, but a more straightforward billing process also avoids insurance companies rejecting a medical claim.. Some estimates claim that around 80% of medical bills contain some error. Even small mistakes can lead to a rejected billing claim.

Insurance Companies Look at Mental Health Differently

The way in which insurance companies, as well as patients, look at mental health is dramatically different than the way they look at more traditional medical practices. Expectations and costs are much different between the two. These differences go back decades and are likely inherent in the current culture. The result is that specialized psychiatry billing services entirely separate from the standard medical industry have arisen to handle the issues unique to the growing mental health sector.


In private practices, psychiatrists generally handle their own billing since their ability to hire multiple staff is less common. These days, however, a single practicing professional is often overwhelmed by the need to keep up to date on billing codes, unique requirements of insurance companies, and changing regulations. This, in turn, leads to missed billing opportunities, paperwork mistakes, and lost work hours. When you add in need to check up on unpaid claims and refiling needs, it is near impossible for a single person to operate at full efficiency. In the end, it’s usually much more cost effective to outsource this process from the beginning.


The unique rules and financial demands make billing for mental health providers a much different beast than general medical billing systems.

Acute Billing Concerns for Mental Health Providers

Mental and behavioral healthcare claims are only approved; roughly 85% of the time. This is caused for a myriad for reasons, but the majority fall into only a few groups.


While we have been able to maintain a 97% claim approval rate for the practices we are managing billing for.


As stated before, mishandling these issues can cost a practice considerable amounts in reimbursements.

●    Constantly Changing Rules and Billing Methods

Insurance policies are always changing, and they all eventually lapse. If a practice doesn’t make an effort to be proactive on checking up on these issues, they can quickly find themselves trying to handle an overload of paperwork -plus, medical and mental health practitioners are often notified last of insurance changes or problems.

To add to the confusion, the rules dictating how all of this must operate are often shifting. Compliance regulations, coding systems, and more need to be followed to the letter. Not keeping up with these changes quickly adds up when problems arise.

You need to ensure you double and perhaps triple check all of your patient’s insurance info before a visit. Also make sure you stay up to date on preferred filing methods and rules.

●    Staff concerns

Costs are more of an issue for mental and behavioral health offices. This can lead to understaffing, usually in the administrative department (for obvious reasons). Cutting costs in regulatory efforts can overload your other staff and decrease morale. This in turn also increases turnover rates. Behavioral health billing and psychiatry billing services are often used these days in lieu of hiring full-time staff. Outsourcing billing to a specialist dramatically reduces the chances of late payments, rejected claims, and improper coding issues.

Victoria YoungHow Is Mental Health Billing Different From Medical Billing?

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