Ultimate Guide to Mental Health Billing

As a practitioner, billing probably isn't something you expect to have to worry about on a day-to-day basis. That's why mental health billing software is beneficial for many reasons. Between administrative tasks, achieving success in your practice,  making deadlines, and ensuring you are HIPAA compliant, you probably find things can be a bit overwhelming…

Do you have time to do everything you want to do in a day? And maybe, more importantly, do you enjoy it? Or what parts do you enjoy? 

As a mental health practitioner, the chances are that billing clients isn't your favorite part of the day and is also probably something you don't feel that confident doing. 

That's why Carepatron has created this ultimate guide to answer all your questions and provide you with the best software solution! 

Common terms used in mental health billing

Billing in mental health services is new for most mental health practitioners, so what do the terms eligibility and benefits mean? Well, eligibility refers to the process where a patient or client is determined to be eligible for health care coverage through their insurance or healthcare plan. Benefits are the amount of money or services provided and covered under an insurance policy. Both are pretty simple but can differ significantly in what each client or patient can apply for, depending on their situation. 

CMS1500 Form

The CMS1500 form is the standard health insurance claim form used for submitting mental healthcare claims to bill Medicare service providers. The CMS-1500 form is used for single practitioner claims and to submit charges through Medicare Part-B.

The CMS1500 requires client demographics, practitioner identification details, procedures and charges, and insurance plan identification information. When taking on a new client, the more information and demographics you can gather, the better, making the process more streamlined in the long run. 

Claims submission

Claims submission refers to the form (usually a CMS1500) that you send to the insurance provider following meeting with the client and filling in the appropriate information. This part of healthcare can be the most inconvenient and time-consuming but is, unfortunately, something you will likely have to do daily as a mental health care provider. Mental health claims can be difficult, so it is best to ensure you get as much information into the form as possible to avoid it being sent back; the old saying 'do it once and do it properly' really applies here. 

Corrected Claim

Mental health insurance billing is a complex system. It is not always easy to know if you've met the required elements to code appropriately for the required reimbursement. It could be a good idea to break down the process into steps for new and established patients. As mentioned above, submitting the form is painful enough the first time; there's no point in doing your job twice as hard and having to submit a second, third, or even fourth corrected claim. 

Clearing House

A clearinghouse is an in-between service between you as a mental health service provider and an insurance company. So, in this case, you would choose and pay the clearinghouse to check your work and verify everything is correct before send them through. So they'll take a bit of the heat off and check for errors and to make sure that the codes you've put down are correct. If your claim isn't quite right, the clearinghouse will send it back to you, highlighting the errors. If your claim looks right, the clearinghouse sends the claim directly to the insurance company you have selected.

The different kinds of codes used in mental health billing

CPT Codes

The Current Procedural Terminology (CPT) codes describe tests, evaluations, treatments, and other medical procedures used within healthcare. There are over 8,000 codes that are published and updated annually by the American Medical Association. CPT codes were created to monitor healthcare trends and have proven to be very useful in the claims submission process. The codes highlight to payers what procedures you need to be reimbursed for as a provider. You'll never remember all 8000 codes, but it could be a good idea to have the PDF saved on your work computer! 

ICD-10 Codes

ICD codes refer to the World Health Organization (WHO) 's International Classification of Diseases and Related Health Problems, and they are used with CPT codes to bill insurances. As a mental health care practitioner, you'll be aware of these and how to use them! Some of the most commonly used ICD-10 codes are: 

  • F32.9 Major depressive disorder, single episode, unspecified
  • F32.0 Major depressive disorder, single episode, mild
  • F32.1 Major depressive disorder, single episode, mild
  • F32.1 Major depressive disorder, single episode, moderate
  • F32.2 Major depressive disorder, single episode, severe without psychotic features
  • F32.3 Major depressive disorder, single episode, severe with psychotic features
  • F32.4 Major depressive disorder, single episode, in partial remission
  • F32.5 Major depressive disorder, single episode, in full remission
  • F32.8 Other depressive episodes
  • F33.1 Major depressive disorder, recurrent, moderate
  • F33.2 Major depressive disorder, recurrent severe without psychotic features
  • F33.3 Major depressive disorder, recurrent, severe with psychotic symptoms
  • F39 Unspecified mood [affective] disorder
  • F25.9 Schizoaffective disorder, unspecified; See also:
  • F25.0­ Schizoaffective disorder, bipolar type,
  • F25.1­ Schizoaffective disorder, depressive type,
  • F25.8­ Other schizoaffective disorders
  • F29 Unspecified psychosis not due to a substance or known physiological condition
  • F41.9 Anxiety disorder, unspecified
  • F41.1 Generalized anxiety disorder
  • F41.8 Other specified anxiety disorders
  • F41.0 Panic disorder [episodic paroxysmal anxiety] without agoraphobia
  • F41.1 Generalized anxiety disorder
  • F42 Obsessive­-compulsive disorder
  • F32.1 Agoraphobia with panic disorder
  • F90.0 Attention-­deficit hyperactivity disorder, predominantly inattentive type
  • F90.1 Attention-­deficit hyperactivity disorder, predominantly hyperactive type
  • F90.2 Attention-­deficit hyperactivity disorder, combined type
  • F90.8 Attention­-deficit hyperactivity disorder, other type
  • F90.9 Attention­-deficit hyperactivity disorder, unspecified type
  • G30.0 Alzheimer's disease with early-onset
  • G30.1 Alzheimer's disease with late-onset
  • G30.8 Other Alzheimer's disease
  • G30.9 Alzheimer's disease, unspecified
  • F31.9 Bipolar disorder, unspecified
  • F31.0 Bipolar disorder, current episode hypomanic
  • F31.10 Bipolar disorder, current episode manic without psychotic features, unspecified
  • F31.11 Bipolar disorder, current episode manic without psychotic features, mild
  • F31.12 Bipolar disorder, current episode manic without psychotic features, moderate
  • F31.13 Bipolar disorder, current episode manic without psychotic features, severe
  • F31.30 Bipolar disorder, current episode depressed, mild or moderate severity, unspecified
  • F31.31 Bipolar disorder, current episode depressed, mild
  • F11.20 Opioid dependence, uncomplicated
  • F11.21 Opioid type dependence in remission
  • F11.220 Opioid dependence with intoxication, uncomplicated
  • F11.221 Opioid dependence with intoxication delirium
  • F11.22 Opioid dependence with intoxication with perceptual disturbance
  • F43.10 Posttraumatic stress disorder, unspecified
  • F43.11 Posttraumatic stress disorder, acute
  • F43.12 Posttraumatic stress disorder, chronic
  • F43.23 Adjustment disorder with mixed anxiety and depressed mood
  • Z79.891 Long term (current) use of opiate analgesic
  • Z79.899 Other long term (current) drug therapy
  • Z03.89 Encounter for observation for other suspected diseases and conditions ruled out

It's important to note that this is not a full list, just some commonly used examples. 

DSM 5 Codes

DSM 5 codes are provided by The Diagnostic and Statistical Manual of Mental Disorders (Fifth Edition). This manual is a taxonomy of mental health disorders and is used as a diagnostic tool by mental health practitioners. It was published by the American Psychiatric Association and is updated frequently to include any new disorders or alter/ remove any that aren't seen to be correct. To put it shortly, the ICD-10 and DSM 5 codes are the exact same. The DSM is simply a  guide to selecting the correct ICD code, so no need to confuse yourself trying to choose between the two! 

When should the mental health billing codes be used

In total, there are three different insurance codes in the mental healthcare industry. These are CPT (Current Procedural Terminology) codes, ICD-10 (International Classification of Diseases and Related Health Problems) codes, and DSM-5 codes. Each taxonomy was designed to create a common way to communicate treatments, diseases, procedures, and evaluations for mental and healthcare providers.

Mental healthcare practitioners should only ever use ICD-10 codes to bill for mental health claims. Remember, the DSM-IV is used by all mental healthcare practitioners to help in the diagnosis of clients/patients with mental health ailments. 

Common mistakes to avoid in mental health billing codes

After reading the majority of this article, you've probably realized there are a LOT of possible mistakes that you can make in the process of behavioral health billing. One way to ensure you don't make common mistakes is to be aware of them and avoid them! We've provided a quick list of the mistakes, and if you need any further information about them, be sure to check out this website for further explanation. 

Here are some of the most common mix-ups to avoid in medical coding

  • Unbundling codes
  • Upcoding
  • Failing to check National Correct Coding Initiative (NCCI) edits when reporting multiple codes
  • Failing to append the appropriate modifiers or appending inappropriate modifiers
  • Overusing modifier 22, Increased Procedural Services
  • Improper reporting of the infusion and hydration codes
  • Improper reporting of injection codes
  • Reporting unlisted codes without documentation

What are the steps involved in medical health billing

Gather patient information

Gathering patient or client information is the first step for any therapy billing process. This will include collecting basic demographic information on a patient, including name, birth date, and the reason for the visit. Insurance information is collated, including the insurance provider's name and the patient's policy number, and verified by the health care provider creating the bill. This information is used to set up a patient file referred to during the medical billing process.

Verify the mental health benefits

Make sure that you are aware of your patient's insurance plans and benefits before making a claim. Although this sounds like a huge job, in the long run, making sure you know the coverage available for each patient before they receive any services will be very beneficial in the long run. To know what coverage your patients have, it's best to verify benefits (VOB) for each patient before you provide any services. A VOB checks the patient's policy regarding the service they are visiting for and gives providers information that is not available from a patient's insurance number. It's a step you should take in the process. 

Filing Claims

The mental health biller (you) will put the claim either into a paper claim form (CMS 1500) or into the proper practice management or billing software (EHR software). Once you've created the medical claim, it's important to remember that you are responsible for ensuring that the claim meets compliance standards, both for coding and format. While some claims may be slightly different, they usually have the same basic information. 

  • Patient information (their demographic info and medical history) 
  • Procedures performed (in CPT codes)
  • Diagnosis code (an ICD code) 
  • The cost for the procedure is listed
  • Information about the provider, via a National Provider Index (NPI) number
  • Place of Service code

Refiling claims and dealing with rejected claims

Being reimbursed for the services you provide to clients should be straightforward: provide the service, submit the claim, and receive payment. It sounds simple, but unfortunately, a lot can go wrong! 

In addition to the list provided previously, we feel like this article is really helpful at outlining common reasons for denied claims and how to avoid them. Be sure to check it out! 

  • Timely filing
  • Invalid subscriber identification
  • Noncovered services
  • Bundled services
  • Incorrect use of modifiers
  • Data discrepancies

We think a mental healthcare practitioner should start out trying to identify the source and investigate the most common reason for denials for a while, such as a week or a month. It will then be possible to organize the report by each of these fields to determine what needs to be changed to reduce the number of denials. 

Make Your Billing The Best With Carepatron 

Mental health billing is HARD, and that's why mental health billing software is great, but it's important to make the right decision initially to avoid any mistakes and make sure you choose the best mental health billing software. And now we want to show you why Carepatron is the best choice for any mental health practitioner; 

  • Free forever version with unlimited users and all features.
  • Intuitive, user-friendly functionality.
  • Powerful voice-to-text transcription.
  • Unlimited 24/7 support.
  • Billing and payment automation.
  • Powerful note and clinical report templates.
  • Beautiful patient experience
  • Automated scheduling reminders.
  • World's best medical billing.
  • HIPAA compliant and certified.

Carepatron is your digital healthcare hero. It is the world's leading free practice management software by a country mile. From providing you with secure patient records to supercharging your team's productivity, Carepatron is the ultimate practice management solution (I know I could be biased, but it's true)!!!


Join 10,000+ teams using Carepatron to be more productive.

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