Mental health billing services: what therapists and psychiatric practices should expect

What mental health billing services should cover

Behavioral health billing looks simple from the outside. Most practices bill a short list of codes, there are no implants or surgical packages, and the same patient often comes in every week. That repetition is exactly what makes it risky. One setup error, such as a wrong place of service or a lapsed authorization, repeats on every claim until somebody notices.

A mental health billing service should take on the whole claim cycle, from the first eligibility check to the last appeal. At a minimum, expect:

• Eligibility and benefits checks before the first session and whenever a plan renews, including which company actually manages the patient’s behavioral health benefits.
• Charge entry and claim submission with the right code for the session length, place of service and modifiers.
• Payment posting from ERAs and paper EOBs, with underpayments flagged instead of quietly adjusted off.
• Denial follow-up and appeals, worked by someone who knows behavioral health payer policies.
• Patient statements and a clear process for copays, coinsurance and deductibles.
• Reporting by clinician, payer and code, so you can see where money is stuck.

Psychotherapy billing codes are time-based

The core psychotherapy codes are chosen by the time spent with the patient:

• 90832 for 16 to 37 minutes
• 90834 for 38 to 52 minutes
• 90837 for 53 minutes or more

Diagnostic evaluations use 90791, or 90792 when medical services are included, which usually means a psychiatrist or psychiatric nurse practitioner. Prescribers who do medication management and therapy in the same visit bill an E/M code plus a psychotherapy add-on code, and the time spent on the E/M portion can’t be counted toward the therapy time.

The note has to support the code. Record session time in every note, either start and stop times or total minutes. Some payers review 60-minute sessions more closely than shorter ones, and a pattern of billing 90837 for nearly every visit tends to draw attention. A good billing service will flag notes that don’t support the code billed and leave the coding decision with the clinician.

Diagnosis coding matters too. Therapy claims billed with only a Z code, such as a relationship problem or a life circumstance code, are often denied, because many plans don’t treat those as covered diagnoses on their own.

Telehealth billing for therapy and psychiatry

Telehealth is now a routine part of most behavioral health practices, and it’s a steady source of avoidable denials. The details vary by payer:

• Place of service. POS 10 is used when the patient is at home and POS 02 when the patient is somewhere else, such as another clinic. Some commercial plans publish their own instructions, so check each one.
• Modifiers. Modifier 95 is widely used for live video visits, and modifier 93 for audio-only visits where a plan covers audio-only care at all.
• Coverage rules. Medicare’s telehealth rules for behavioral health have been extended and revised several times since 2020, and every state Medicaid program and commercial plan sets its own. Confirm current policy for each payer instead of relying on what worked last year.

Authorizations and behavioral health carve-outs

Many commercial health plans don’t manage mental health benefits themselves. They carve them out to a separate behavioral health administrator with its own provider network, its own payer ID or claims address, and its own authorization rules. The patient’s card may show the medical plan’s name on the front and the behavioral health contact in small print on the back.

Carve-outs cause three common problems:

• Claims sent to the wrong payer. The medical plan denies them, sometimes weeks later, while the timely filing clock keeps running.
• Credentialing with the wrong entity. Being in network with the medical plan doesn’t mean you’re in network with its behavioral health administrator.
• Missed authorizations. Routine outpatient therapy often doesn’t need prior authorization. Psychological testing, intensive outpatient programs and higher levels of care commonly do, and some plans require a review after a set number of visits.

Your billing service should confirm who manages behavioral benefits for every new patient, and track authorization visit counts and end dates so sessions aren’t delivered under an authorization that ran out last week.

Credentialing for therapists and psychiatric providers

Behavioral health groups usually mix license types: psychiatrists, psychiatric nurse practitioners, psychologists, clinical social workers, professional counselors and marriage and family therapists. Payers don’t treat them all the same. Some plans contract with every license type, some limit which ones they’ll add, and many won’t credential clinicians who are still pre-licensed or practicing under supervision.

Medicare changed in 2024, when marriage and family therapists and mental health counselors became eligible to enroll and bill Medicare directly. If your counselors have been turning away Medicare patients, it’s worth another look.

One rule matters more than the rest: don’t bill one clinician’s services under another clinician’s NPI unless the payer’s written policy specifically allows it. Supervision billing rules differ by payer and by state, and getting them wrong can mean paying money back after an audit. Our credentialing team handles enrollment for each license type and tracks re-credentialing dates.

Questions to ask before hiring a mental health billing service

1. How many behavioral health practices do you bill for, and which carve-out administrators do you work with most?
2. Who verifies benefits, and do you check which entity manages behavioral health benefits?
3. How do you track authorizations, visit limits and end dates?
4. How do you set telehealth place of service and modifiers for each payer?
5. Will you tell us when a note doesn’t support the time-based code billed?
6. Do you prepare Good Faith Estimates for self-pay clients, or is that on us?
7. What reports will we get, and how often?
8. Can we export all of our data if we leave?

On Good Faith Estimates: under the No Surprises Act, providers generally have to give uninsured and self-pay patients a written estimate of expected charges. Therapy practices with private-pay clients are covered, and it’s easy to overlook.

Our behavioral health billing page explains how we work with therapy groups and psychiatric practices.

Start with a look at your current claims

The fastest way to judge your current billing is to look at the claims. Our free A/R audit reviews ninety days of claims by payer, clinician and denial reason, and you keep the findings whether or not you work with us. Request your free A/R audit.