Maximizing Reimbursement: Navigating The Insurance Billing Process For Therapy Services

Billing insurance for therapy can be a challenging and complicated process, but it's a necessary part of running a private practice. The Mental Health Parity and Addiction Equity Act of 2008 prohibits private insurers from discriminating against mental health services, so therapists can serve a wider range of clients. However, billing insurance usually involves a lot of paperwork and communication with different entities. To bill insurance for therapy, therapists need to understand the credentialing process, collect client information, verify insurance coverage, and submit claims using the correct codes and formats. They also need to be aware of deadlines, payment schedules, and potential delays or denials. While it can be a daunting task, establishing clear guidelines and policies can make the process more manageable.

Getting Credentialed with Insurance Companies

Medical credentialing is the process of getting networked with insurance companies, often described as "getting on insurance panels". It involves retrieving and filling out a series of applications with insurance companies, submitting the applications, ensuring each has been received, and then doing a lot of follow-up to track the progress of each application.

The process of "credentialing" or "provider enrollment" with an insurance network consists of two phases: credentialing and contracting. The credentialing phase is when the insurance company verifies your credentials and that you meet their requirements for participating in their network. The contracting phase is where the company issues you a participating provider agreement that defines the terms of participation for receiving in-network reimbursement for your claims. Without a participating provider agreement, you will not receive in-network reimbursement.

Prepare for Credentialing

• Establish a business entity (LLC, S-Corp, PC, etc.) and obtain your tax ID.
• Obtain your professional liability insurance policy.
• Obtain your National Provider Identifier (NPI) number. There are two types of NPI numbers: Individual (Type 1) and Organizational (Type 2).
• Be fully licensed in the state where you will provide services.
• Create a profile with CAQH and keep it current.
• Have your practice location ready.

Credentialing with Insurance Networks

• Research the insurance companies and decide which ones you want to be credentialed with.
• Contact the network provider services department to inquire about their credentialing process and obtain a credentialing application.
• Complete your application, listing all service locations for your practice, and include copies of all required documents.
• Ensure your CAQH profile is up to date and includes copies of all required documents.
• Verify with the insurance company that your credentialing application was received, and follow up regularly until your credentialing is complete.
• Respond to any requests for additional information.
• Review your participating provider contract for details of your requirements as a network provider, claims submission procedures, fee schedule, timely filing limits, and other important terms.

Common Challenges of the Credentialing Process

The credentialing process can be time-consuming and detailed. It may take several months to get approved, and even more if additional or missing data is required. This is in addition to the time it takes to gather all the necessary information and apply for each panel. Insurance panels are also competitive, so it is helpful to offer qualities that other therapists don't possess, such as speaking another language or the ability to work uncommon hours.

Filling Insurance Paperwork

Filling out insurance paperwork can be a complex and confusing process, but it's crucial for therapists to master it to run their practice and receive compensation. Here are the steps to fill out insurance paperwork for therapy:

Client Information:

• Full legal name
• Date of birth
• Address
• Gender
• Phone number
• Email address
• Social Security Number (rarely required)
• Insurance card information, including subscriber ID and customer service phone number

Therapy Details:

• Date and type of each therapy session, using the correct Current Procedural Terminology (CPT) codes. CPT codes are vital for filing insurance claims and help identify the types of treatment and their duration. Examples include:
• 90832: 30-minute psychotherapy
• 90839: 60-minute crisis psychotherapy
• 90847: 50-minute family psychotherapy with the primary client present
• 96132: Neuropsychological testing services, such as evaluations for dementia or ADHD

Diagnosis and Provider Information:

• Diagnosis code ("ICD") provided by the therapist, e.g., "F41.1" for Generalized Anxiety Disorder
• Provider's name, address, and tax ID number (TIN, EIN, FEIN, or SSN)

Submission and Follow-up:

• Submit the insurance claim online or by mail, following the provider's instructions and deadlines.
• Keep accurate records and track the status of claims and payments.
• In case of rejections or denials, appeal with supporting documents such as session notes and treatment plans.
• Stay updated with insurance company requirements and any changes in CPT codes.

Deadlines and Payment Schedules

The deadlines and payment schedules for insurance billing vary from insurer to insurer. Medicare and Medicaid typically require that claims be submitted within 365 calendar days from the date of service. Private insurers tend to set shorter deadlines, with 90 days being a common timeframe.

Therapists who work with multiple insurers may have to juggle multiple deadlines. To avoid missing a deadline, it is recommended to identify the shortest filing period among the insurers and then file all claims within that period. For example, if one insurer offers a 90-day filing period, consider filing all claims within 90 days.

Therapists are generally reimbursed within 30 days. However, coding errors can cause delays in reimbursement, so it is important to keep track of each bill sent out. If you don't receive payment within 30 days, follow up with the insurer.

To avoid missing submission deadlines, it is advisable to establish a regular claims filing schedule or protocol. It is also crucial to know the claims submission deadline for each insurer and to track the status of your claims.

Even when you are knowledgeable about insurance billing, a claim can still be denied. It is important to stay calm and pull your claims information to check for accuracy. If there are discrepancies, you may need to refile or call the insurance company for clarification. Remember that there are usually filing deadlines for resubmitted claims as well.

Getting Insurance Payouts

Discuss Insurance Policies with Clients

It is important to verify insurance coverage and reimbursement rates with new clients. Ask individuals to notify you if they switch insurance providers. Discuss their insurance plan, including copays, deductibles, and whether pre-authorization is required for certain procedures.

Help Clients Navigate Insurance Reimbursement

Inform clients about their insurance coverage and how it applies to therapy sessions. Explain that many insurers only provide coverage once the client reaches their deductible. This means they may have to cover some sessions out of pocket. If a client changes jobs, inform them about COBRA benefits, which will continue to cover therapy while they seek new employment.

Establish Policies for Claim Denials

Determine a clear policy for when insurance denies a claim. Decide whether the client is responsible for payment in these cases and communicate this to them upfront.

Understand Specific Insurer Policies

Different insurers may have varying policies and requirements. Know the specific policies an insurer requires you to follow. For example, some insurers may require pre-authorization for certain services or only cover treatment if a specific condition is diagnosed.

Maintain a Contact List for Billing Questions

Keep a record of contacts at each insurance company to streamline the billing process. Note down the insurance company's phone numbers for provider relations, claims department, and service pre-authorizations. Create a master file easily accessible and keep your login information secure.

Follow Up on Unpaid Claims

Regularly check the status of your insurance claims and be proactive in following up on overdue payments. Don't hesitate to contact the insurance provider's representative to inquire about the status of a claim. Stay organized and keep track of your billing claims to ensure you receive timely reimbursement.

Common Billing Errors

Billing insurance for therapy can be a daunting process, but being aware of common errors can help you avoid them. Here are some of the most frequent mistakes to watch out for:

Incorrect Patient Information

A simple typo or misspelling of a patient's name, date of birth, address, gender, or insurance identification number can cause a claim to be rejected. Always double-check that the patient's identifiers match the information on their insurance card.

Incorrect Provider and Insurance Information

Similar to the above, incorrect information about the provider or insurance company can also lead to claim rejections. This includes mistakes in names, addresses, contact information, policy numbers, etc.

Mismatched or Incorrect Codes

Using incorrect or mismatched ICD (International Classification of Diseases), CPT (Current Procedural Terminology), or HCPCS codes can cause issues. These codes are used to describe specific treatments and procedures, and entering too few or too many digits, using the wrong code, or attaching conflicting modifiers can result in rejections or denials.

Duplicate Billing

This occurs when the same claim is filed twice, either by mistake or because someone was unaware that the claim had already been reported or paid. Duplicate billing can create confusion and lead to rejected claims.

Undercoding and Upcoding

Undercoding is when a provider intentionally leaves out a procedure code or uses a code for a less severe diagnosis or treatment. This may be done to save money for the patient or avoid audits but is illegal and considered fraud. Upcoding, on the other hand, involves using codes for more intensive procedures or diagnoses than what was actually performed, potentially resulting in overbilling and triggering fraud investigations.

Insufficient or Poor Documentation

Insurers require adequate documentation to support claims. Missing notes, insufficient orders, lack of care plans, missing timesheets, or failure to establish that billed services were provided can lead to claim denials or downcoding, where the insurer may reduce the billed time or service.

Billing for Non-Covered Services

Billing for services not covered by the patient's insurance policy will result in claim denials. It is important to be aware of the coverage limitations and not attempt to disguise non-covered services as covered ones, as this can be prosecuted as fraud.

Unbundling

Unbundling occurs when each service is billed separately instead of under one inclusive package code. This can be done in hopes of receiving higher reimbursement but is generally not allowed and can lead to issues with the insurer.

Incorrect Time Units

Billing for longer visits than those that occurred, such as rounding up a 45-minute session to a 60-minute session, is incorrect and can lead to excessive billing, claim denials, and potential fraud investigations.

Frequently asked questions