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Common Behavioral Health Insurance Billing Mistakes and Issues

cartoonish image of a man checking off items on an insurance checklist

Common Behavioral Health Insurance Billing Mistakes and Issues

Behavioral health billing is one of the more complicated types of medical billing. Due to the many different types of behavioral health and substance abuse treatment options and the varying ways in which insurance providers require their claims to be submitted, legitimate claims are often denied. This denial can leave healthcare providers in a precarious situation. On the one hand, they need to treat patients who have medical issues, while on the other, lagging collections can lead to cash flow problems for the providers. To mitigate these issues, it’s important to have a team of medical billing specialists with specialized knowledge of the behavioral health billing process. They should understand how to appropriately bill insurance providers and clients to ensure that claims are approved, and reimbursement is received in a timely manner. Awareness of common billing mistakes can help make the process much smoother.

What are the common mistakes made during the medical billing process?

There are a number of ways that errors may occur during the medical billing process. Since behavioral health is quite different from other, more transparent forms of medical billing, it requires skilled billing associates who know how to ensure claims are submitted properly. Typical errors encountered during the behavioral health billing process include:

The Claim Is Missing Information

It’s easy for billers to omit key information, such as the date of treatment or the date of onset of the incident. However, leaving out important details can lead to delays in reimbursement for medical claims. Ensuring that all relevant specifics are included in the billing will help speed the process along.

Submission Is Not Timely

All claims must be submitted in a timely fashion according to the rules of the insurance provider. If a proper claim is submitted but it’s not received within the window provided for, it may be denied. In addition, all claims must have the required supporting documentation provided before the deadline to receive

Incorrect Patient Identifier Details

Each claim submitted must include the correct information on the patient. This information includes the proper spelling of their name, their birth date, and their sex. If they have a health insurance plan, it needs to include a group and policy number that matches with their personal details. For patients who have more than one form of insurance, the primary insurance policy should be listed. Once the primary insurance claim has been submitted and collected, any remaining amounts due can be sent to the secondary insurer for further reimbursement.

Incorrect CPT or REV Code

Claims must have the correct Current Procedural Terminology (CPT) or Revenue (REV) code included in the medical billing. These are numbers that are assigned to each service that a healthcare provider offers. The CPT or REV codes can include medical, surgical, and diagnostic services. Once an insurer receives a claim with a CPT code, they will review it to make sure that it aligns with their policies and that the CPT code makes sense. Incorrect CPT codes can lead to denied claims.

Using Outdated CPT Codes

Each year, the American Medical Association (AMA) updates the CPT codes. If your medical billing software does not include the revised codes, it can result in mistakes in the billing process. Behavioral healthcare providers must make sure that they have the most current set of CPT codes and that their claims reflect them before they are submitted to insurance companies for reimbursement.

Partaking in Upcoding

Upcoding involves using medical codes to attempt to increase the amount collectible from an insurance provider. In certain cases, medical billers may intentionally or accidentally include codes that result in additional pay for the physician. In the behavioral health world, one example involves using codes for a 48-hour stay at the facility when the patient was only there for 36 hours. Medical billers must ensure that they use the right codes that indicate exactly what the patient was in treatment for and how long they were in it.

Problems with Documentation

All relevant documentation must be included when the claim is finally submitted to the insurance provider. Common types of documentation include:

  • Reason for the treatment or visit
  • Date the treatment or visit was received
  • Case history of the patient
  • Description and copy of test results
  • Clinical impression and final diagnosis

The documentation will assist the health insurance provider in determining whether the treatment or visit was appropriate to the case. Missing documentation can lead to denied or delayed reimbursement for claims.

Duplicated Billing

It’s not uncommon for medical billers to accidentally submit a claim to an insurance provider for the same patient’s visit twice. In some cases, there may be small variances in the claim that aren’t caught by billing software, leading to duplication. In other cases, the patient account may not be up to date, or appointments may be entered twice, resulting in twin claims. Whatever the reasons, duplicate billing caught by insurance companies will likely be denied. It will be up to the behavioral health center to resubmit an individual claim to collect reimbursement.

No Prior Authorization Given

In some cases, insurance companies require that a prior authorization or referral be given prior to certain services or procedures being performed. A referral must be given by the patient’s primary care physician for treatment. If a prior authorization is necessary, it must be given by the health insurance company before any treatment is given. Lack of prior authorization can result in denied claims.

No Insurance Coverage

Insurance coverage can be discontinued at any point. Common reasons it becomes invalid are if the patient doesn’t pay their premiums or becomes unemployed. Thus, behavioral health centers are well-advised to ensure that their patient’s coverage is valid every time they provide services. The staff of the behavioral health facility should contact the health insurance provider to make sure insurance has not been terminated and that any maximum benefit set by the provider for behavioral services has not been

Unbundling of Codes

It’s not uncommon for behavioral health providers to serve their patients using multiple types of treatments. For example, they may provide inpatient treatment at a residential center but also offer outpatient session services at the same time. This approach is typical with substance abuse centers that are transitioning their patients as they respond to treatment. Unfortunately, it can be a nightmare in the medical billing process, as insurance providers may see it as an attempt to collect unnecessary fees. Many times these types of billing will end up in an appeals process with the insurance provider to collect the monies they are due. In an effort to avoid the appeals process, medical billers may submit two claims — one for the outpatient treatment and another for the inpatient residential care. If the insurance provider catches this, both claims can be denied.

Preventing Medical Billing Mistakes

To prevent claims from being denied, it’s important for behavioral health facilities to follow a strict set of procedures every time they see or treat a patient. Ensuring that the medical billing process is handled smoothly involves a number of steps that providers can put into place:

Build in a Pre-Authorization Process

While pre-authorization isn’t required by every insurance company, your facility can use it to ensure that a patient’s coverage will apply to the services or treatment that you provide. It just requires a quick phone call to the insurance agency to verify that the patient’s insurance is valid and will cover the treatment performed. Obtaining a pre-authorization can be especially important if you will be providing lengthy or multiple sessions.

Use a Billing Software Built for Behavioral Health

While there are many programs available for medical billing, using one that is optimized for behavioral health can help your staff avoid coding errors that lead to denied claims. Sunwave Health offers a solution that covers the entire revenue cycle management process. Using our software, you’ll be able to improve the quality of your medical billing procedures and speed up your reimbursements.

Ensure Patient Information Is Up-to-Date

Whenever a patient comes for treatments or for a session, check that their personal information has not changed. Ask for their current identification, including address and phone number. You can also create a form that they can fill out that will indicate any changes in personal details. Many providers ask their patients to update these types of forms at least once per year.

Find Out Why Claims Are Denied

If you have received notification that a claim was denied by an insurance provider, determine the cause. This understanding is important to ensure that any mistakes in the billing process are caught and corrected. By determining the cause of claim denial, you can be proactive and make sure it doesn’t happen again.

Submit Claims on Time

Each insurance provider has a different set of rules that they require medical billers to follow when submitting claims. Make sure that your team is aware of each provider’s claim submission windows. One of the most common reasons why claims are denied is because they aren’t submitted in a timely fashion.

Boost Your Billing Processes with Sunwave Health

We understand how important the medical billing process is for behavioral health facilities. In fact, we’ve built an entire revenue cycle management software specifically for the behavioral health sector. If you’re looking for a better solution to manage your medical billing processes, reach out to Sunwave Health to schedule a free demo today.