- 740-766-6083
- 4323 COLDEN ST APT 10I FLUSHING NY
- info@rcmxpert.com
Menu
Mental health insurance claims experience denials from 12% to 20%, double the 5% to 10% denial rate on general medical claims. This includes time-based coding, session limitations, payer medical necessity and carve-out.
This gap is anything but coincidental. There are guidelines unique to behavioral health that most medical claims do not have to comply with, and each of them represents an opportunity for the claim to fail. For instance, psychiatry has seen its rates fall by close to 16 percent, some of the highest among all specialties, according to Becker’s ASC Review. The problem only gets worse when the first attempt fails. Some 60 percent of denied claims are never resubmitted, meaning that the income goes away. According to industry analysis by MGMA, up to 30 percent of the revenue that practices lose comes from ineffective billing.
A behavioral health practice will usually see this loss as anything but a massive one-time write-off. It is a slow drain: a denied authorization, an underpaid telehealth claim, a pile of denials that nobody has gotten around to appealing. There are four basic reasons why this happens.
Revenue cycle management for mental health encompasses the entire financial chain beginning with the intake of the patient and their insurance information through payment and documentation.
Billing involves the process of coding and submitting the claim. The denials that have been discussed in the preceding section rarely begin at submission. The issues arise much earlier during eligibility and authorization but manifest themselves in denials. Effective revenue cycle management requires identification and correction of the error right from the point where it occurs. These are the eight steps we take for our behavioral health clients.
The operator difference: once the eligibility check reveals that there is a behavioral carve-out, we divert the claim even before the first submission. Not after the first denial.
Eligibility, behavioral benefits, copay, deductible and visit limit information is verified prior to the session; the same eligibility process identifies the carve out of mental health benefits to a managed behavioral organization. In other words, claims will be submitted properly from the beginning. Check out our insurance eligibility and benefits verification.
By having certified coders identify the CPT code, time band and diagnosis for each individual session, we ensure that add-on codes, crisis codes and testing codes will be captured, but not missed.Â
Before submitting claims to a clearinghouse, every single claim goes through the scrubbing process in order to meet all the payer edits, modifier logic, and place of service requirements.
We post and reconcile every payment using the contracted rate. If a payment is an underpayment, we can spot this problem when we post, as we would miss a subtle 10 percent difference for months.
We bill our patients on time, giving them accurate bills and producing a good faith estimate required by the No Surprise Act for our self-pay and uninsured clients.
These four metrics appear on the live dashboard and show you what is going well and where the next dollar gets hung up.
Two adjacent services often determine whether the process remains smooth: Behavioral Health Credentialing and Payer Enrollment, including CAQH Profile maintenance, determines which payers can be billed, and Out of Network Billing handles claims that are not contracted.
There are three types of psychotherapy codes, namely, 90832 for 16 to 37 minutes, 90834 for 38 to 52 minutes and 90837 for 53 minutes and above. The minutes entered in the note determines the type of code used.
These three codes have other codes around them which make billing an entirely new profession namely diagnostic codes, codes for E/M visits, family codes, group codes, crisis codes, psychological testing codes and integration codes designed for 2026 for Medicare. These codes are listed below by our coder.
The 90834 vs 90837 separation is the most significant threshold in the field of psychotherapy billing. 90837 stands for a 60-minute session and can be billed starting from 53 minutes, the halfway point between 45 and 60-minute services. The code below 53 minutes will be 90834. This documentation must be reflected in the note since an unaccompanied code may cause the reimbursement to come back.
90837 also reimburses higher rates than 90834, and this is why the payer monitors its use. A practice using 90837 on nearly all sessions and using minimal times can get into utilization review or audit scrutiny. Avoiding the code is not the solution. Using 90837 on a justifiable occasion is the key. Our certified medical coding experts code to notes, and therefore 90837 is defensible every time.
Behavioral health billing includes a great many providers, and the credentials that each one holds have their own nuances in terms of coding. Codes appropriate for psychiatry are not appropriate for psychology or counseling.
Credential-specific coding and billing in accordance with payer-specific criteria for the respective provider type is where credential-based billing shows its worth. Here are the providers.
Therapists. Individual therapy, family therapy, telehealth codes, session limit monitoring.
The care setting is an axis entirely separate from clinical credentials. Private practice, intensive outpatient, and residential settings all bill differently at their very core.
Confusion of the two is a very common mistake. The clinician chooses the code, but the care setting defines how you bill it – including the structure, units used, and even payer. We bill in all these settings.
Commercial plans split their mental health benefits to a managed behavioral health care organization, meaning that the claim needs to be directed to the carved-out plan, not the medical plan.
That’s the question that practice owners keep asking us all the time: Why was my claim submitted to the wrong insurance company? The answer is always carve-outs. While the card of the patient will show one payer for the medical plan, there’s a different one for the behavioral benefits, and the claim goes denied even though everything is fine because it was sent to the wrong plan.
Aetna ØŒUnitedHealthcare Cigna ØŒBlue Cross Blue Shield
Medicare Part B State Medicaid (H-code services)
Optum Behavioral Health Carelon Magellan
The MHPAEA mandates that the plans must not apply a higher standard for mental health care services than they apply for other medical conditions. If a denial can be explained by applying more stringent limitations on mental health services, then parity becomes a documented grounds for filing an appeal.
The enforcement situation in 2026: the 2024 final rule is being considered under federal non-enforcement from May 2025, pending reconsideration of the rule. However, the baseline regulations from 2013 have not been repealed yet, there is a statutory mandate for parity in place, and those states who enforce parity rules for their issuers continue enforcing them. In 2026, parity is an alive appeals tool; the thing that has changed is the enforcement situation with respect to the newest rule.
The billing process that works is the one which repeats the six steps for each cycle and improves upon itself based on the practice’s unique data, with the goal being to identify whatever wasn’t caught in the last cycle.
Eligibility, behavioral benefits, and carve-outs verified before the session so that every claim is properly started with the appropriate payer and up-to-date authorization.
Certified coders code the session to the appropriate time band, add-on, and diagnoses so that the full scope of the services rendered is captured and not just the easy part.
Payer edits, modifier checks, and place of service logic verified per claim prior to submission to the clearinghouse to increase first pass acceptance.
Remittance advice posted electronically and reviewed against the contractual allowance, underpayment identified at posting time.
Denied and underpaid claims appealed, with parity invoked where the behavioral coverage is more restrictive than the medical one.
Days in accounts receivable, clean claims rate, and net collections rate reviewed each cycle and process improved accordingly.
That last step is the one most billing relationships skip. A claim run that never examines its own denial patterns repeats them. We treat each cycle as evidence for the next.
Behavioral health billing can take place within the EHR system that a practice is currently using, with no need for migration at all in order to start. Everything remains as is – the documentation and schedule, with only the billing being handed over.
If you use any other platform than those mentioned above, it is likely going to be one that we will easily fit into. If, however, migration proves to be more effective, we transfer everything over and set up the billing with no delays in processing the claims.
RCM Xpert collects fees from all 50 states from its main office located in New York State. Payor set up depends on state-specific policies concerning Medicaid, telemedicine, and licensure laws.
Behavioral billing practices differ across the country. For instance, telehealth or Medicaid H-code policy that is relevant to a particular state does not mean that it is the same for another state. There are separate pages for the following states, among others:
Are you practicing in some other state? Our company already bills there. Just indicate your state on the audit form, and we will confirm specific payors in your area.
Behavioral health is action, not an accounting line. The distinction appears in terms that truly count for a business: denial rate, days in A/R, and percent of claims that get paid at first attempt.
For an individual provider with two payers and authorizations in place, outsourcing might not even be necessary at all. It becomes a necessity based on the number of payers, the claims volume, and denials percentage.
There is only one real test for it, and that is to see if it costs you more than outsourcing would. That includes both dollars and time. If you have denials going unaddressed, if your telemedicine claims could be underpaid, and if your payers’ telephone calls distract you from your clinical activities, then the answer will usually be “yes”. Here is the straightforward comparison.
| In-House Billing | Outsourced RCM | |
|---|---|---|
| Denial follow-up | Often put aside with the surge in clinical work | Performed routinely as a standard process, not something that's added later |
| Coding expertise | Individual psychotherapy | Certified coders familiar with time bands and 2026 regulations |
| Coverage | Affected by the turnover, vacations, and time off of your employee | Continues uninterrupted; no single point of failure |
| Cost structure | Salary and software expenses, regardless of whether claims were submitted or not | Percentage of collections, paid on the actual revenue |
| Your time | Tied up by payer's telephone calls and rework | Returned to patient care |
A percentage-of-collections arrangement means the billing fee only grows when your collections grow. There is no incentive to chase easy claims and abandon hard ones, because the service is paid on what lands in your account. Aligned incentives, not a flat fee for effort.
Most behavioral health billing operates based on a percentage of collections, usually between 4 to 8% of how much the company collects for you. Your payments are based upon collected amounts, not on submitted claims.
The percentage does not have any randomness to it; there are certain factors that determine which end of the spectrum the business will be at.
Since the payment depends upon collections, the higher the monthly amount, the better the percentage of collections will be. We provide an exact percentage following our free audit of your practice, based on the actual volume and claims, not our best guess. Our audit is free, as well as our rate quote.
RCM Xpert: free audit, 30-day trial, no contract. You will know the percentage and estimated recovery before committing to anything.
The standard cost of behavioral health billing services is based on a commission of the amount collected for you, which is usually between 4% and 8% of the recovered payments. The commission varies depending on the number of claims processed, average reimbursement rates, payer mix, and whether credentialing is included in the price.
The former means a process of submitting claims, while the latter implies a set of processes surrounding claims submission. It includes everything from verifying patient eligibility and obtaining prior authorizations up to appealing claim denials, collecting payments from patients, and reporting KPIs. Claim submission is just one step in RCM process.
Behavioral health claims are denied approximately in 12-20% cases, two times more often than general medical claims. That’s due to multiple factors, such as time-based therapy codes, limitations on session numbers, rules of prior authorizations, payer-specific criteria of medical necessity, and carve-out processing.
It is when the commercial insurance plan assigns their mental health benefit to a separate managed behavioral health organization like Optum Behavioral Health, Carelon, or Magellan. Your medical card is one payer; your behavioral health services claim needs to go somewhere else. Eligibility verification will identify this prior to the visit, so that the claim goes to the right place first.
Yes, we operate within SimplePractice, TherapyNotes, Valant, Tebra, AdvancedMD, athenahealth, Office Ally, CareCloud, and many more. You get to use your own clinical software and maintain your notes in it; we bill from it. If you decide to switch, we will transfer your data and payer settings without interruption of claims processing.
Coding is identical to how you would code an in-person session. The difference comes from the modifier and the place of service. Modifier 95 or 93 plus place of service 10 indicates treatment in the patient’s home and applies the non-facility rate. Place of service 02 will apply a lower facility rate, underpaying you.
No, not all do. In case of a single clinician with only two insurance carriers and proper authorizations, it might be feasible. Outsourcing becomes necessary as more insurance carriers join the fray or the claim submission number increases. As well, as the time spent on the phone rather than with your patients increases, so does the importance of the billing function.
CPT 90837 refers to 60-minute psychotherapy, which can be billed if the session exceeds 53 minutes according to the mid-point criteria. CPT 90837 is paid higher compared to 45-minute 90834; therefore, billing too much CPT 90837 triggers alerts among some payers. You need to prove time in your documentation when billing for CPT 90837 because usual 90837 without documentation may be audited.
Yes, we manage Medicare Part B and Medicaid behavioral health claims, including those with H-codes mandatory for many Medicaid plans. Effective since 2024, Medicare covers services of licensed professional counselors and marriage and family therapists at 75% of the Physician Fee Schedule rate, and this will continue through 2026.
We invoice for mental and behavioral health practices in all 50 states from our headquarters in New York. State Medicaid regulations, telehealth, and licensing vary greatly, so we have payer configurations for each state. Refer to our States We Serve page above for the states for which we have individual pages, including NY, NC, TX, and CA.
RCM Xpert: Elevating revenue cycle management with expertise from patient registration to claim payment, ensuring accuracy and timely financial insights.
Copyright 2026 RCM Xpert. All rights reserved
