5 Psychiatry Medical Billing Hacks You Need to Know

Mental health services are essential for well-being and emotional healing, but unlike other medical specialties, in psychiatry, patients and insurers are often charged primarily for consulting sessions and psychological testing services.

And private insurers have strict rules about what they will reimburse, including session length, frequency, and capped benefits with treatment maximums.
Frequently, the patient’s psychiatric needs exceed the allowed mental health benefit, making balancing an effective treatment plan with adequate reimbursement tough for behavioral and mental health professionals.

With the implementation of the Affordable Care Act, mental and behavioral health services were elevated to an Essential Health Benefit, mandating coverage. However, many major insurers have caveats and higher costs associated with psychiatry and mental health—making billing for psychiatric services difficult.
When your psychiatry practice runs better, everyone benefits.

But unfortunately, both services and reimbursements can suffer if there are errors in the system, inaccurate or inefficient documentation, or pre-authorization issues when billing for psychiatric services.

Pre-authorize to Confirm Eligibility

Data has shown that 90% of denials are preventable. One of the main reasons for denials is eligibility. Insurance verification and precertification are important steps right at the beginning of the revenue cycle management (RCM) process.

One way to support successful psychiatry billing RCM is to always pre-authorize services. While this may not be necessary for initial consultation and evaluation, patients might have health plans that require it for complex cases.

Always check if pre-authorization is needed, especially when anticipating therapy that is considered non-standard.

Additionally, many plans are shifting more substantial financial responsibility to the patient. Without accurate insurance information, changes in the status of private insurance, Medicaid, Medicare, and Medicare Advantage programs could result in higher patient deductibles and larger co-pays—and a loss of revenue for the practice.

Check Personal Data Frequently for Inaccuracies

Your patient’s mental health benefits coverage should always be up-to-date and accurate, but their personal information is just as important. Sometimes errors are simple data entry issues, such as a mistyped date of birth or insurance ID number.
But private information also changes. And claims submitted with:

– Errors to a patient’s home address,
– Phone
– Zip code

can affect benefits, deductibles, and co-payments, which ultimately create denials.
According to the Kaiser Family Foundation, claims submitted with missing or inaccurate information are a top reason for denial and potential revenue write-offs.
Many psychiatric practices now check patient data at each visit or after several treatments. This proactive process guarantees that changes are discovered early, minimizing the effect on the psychiatric billing process.

File Claims with Proper Psychiatry Billing Codes

When submitting claims, using the correct, most current coding is essential. Psychiatry billing codes are part of the Common Procedural Technology (CPT) codes and cover all psychiatric, therapeutic, and other mental health services.

Knowing the most current version of diagnostic and service codes is critical, ensuring clean claims and timely reimbursement. However, ongoing changes to insurance benefits can result in updates to the uses of diagnostic and billing codes.

Setting schedules, such as once a month, to apprise the entire office of billing changes is a simple way to avoid mistakes. Proper coding also helps explain services provided during payer audits.

Track All Claims & Appeal Promptly

Psychiatric billing should focus on preventing claim denials. However, mistakes are made, and relatively clean claims are denied. Tracking all claims, not just those that are rejected, is vital to revenue cycle management.

Once a denial is obtained, check the reason that was indicated. Reviewing for common occurrences can help identify patterns in your psychiatric billing process.
Once identified, making corrections promptly is mandatory when billing for psychiatry services. It is essential to appeal a claim or submit a corrected clean claim in a timely fashion, as most insurance providers have submission deadlines for submitting and appealing claims.

Untimely filing is a significant cause of denials for psychiatric practices. It is also avoidable. In 2020, some payers denied up to 40% of claims due to missed filing deadlines. Additionally, these are some of the most challenging claims to appeal—because there is no good excuse.

Untimely denials also negate a patient’s responsibility for the bill—resulting in additional lost revenue for your psychiatry practice.
To meet timely filing deadlines, providers must understand and keep track of dozens of payer requirements, which is a tricky but not impossible endeavor with a small staff. The best solution is either to streamline the psychiatry billing RCM process through billing schedules and ongoing training or to outsource your billing to someone who specializes in medical revenue management.

Avoid Pass-Through Billing

Pass-through billing refers to submitting a claim for services provided by someone else. The most common pass-through billing is for labs, supplies, or anything not delivered by the submitting physician or someone in their direct employ.

A typical example is when practitioners order and bill for lab tests to “facilitate” the process, even though the lab is a separate entity.
Government payers such as Medicare, Medicaid, or even Tricare, categorically deny pass-through billing. Private insurers also have clear policies against the practice. Policies may vary by state, even in a multi-state contract. So a regular review of contracted payers is suggested.
Numerous federal and state laws make pass-through billing illegal. These laws include the False Claims Act (FCA), Physician Self-Referral Law (Stark law), and the Anti-Kickback Statute (AKS).

Overseen by the OIG and FBI, the conviction under these statutes can result in financial penalties, loss of billing privileges, and medical sanctions. And in some cases, incarceration.

The False Claims Act protects Medicare and Medicaid from poor services or overcharging. The Anti-Kickback Statute criminalizes paying and receiving a kickback for patient referrals. However, one of the most controversial laws is the Physician Self-Referral Law, also known as the Stark Law. At its core, it prevents physicians from referring patients for services from entities they or a family member own.

Regarding pass-through billing of psychiatric services, it is easy to see where the Stark Law could be easily violated so it is important to be aware of the regulations.
Medcare MSO has an experienced team of billers as well as trained staff to manage all aspects of the revenue cycle. Now you can easily outsource pre-authorization, insurance verification, and even credentialing to get your business in-network with more insurers.

Outsourcing your billing and claims management puts that process in the hands of experts and allows your in-house staff to focus on patient care. Give us a call at 800-640-6409 to discuss how we can help your practice run smoothly and increase your revenue.

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