Unraveling The Insurance Billing Process Post-Practice Sale: A Comprehensive Guide

Billing insurance is a complex and often frustrating task for clinicians and therapists. It can be a very intimidating process for those venturing out into private practice. However, it is crucial to understand the basics of insurance billing to ensure a successful claims submission process and get paid for your services. This involves several steps, including credentialing with insurance companies, understanding billing codes and deadlines, and keeping accurate records and client information.

Understand the importance of credentialing

Credentialing is a vital process in the healthcare industry, particularly when it comes to billing insurance and establishing relationships with insurance companies and patients. It is a complex and time-consuming procedure that verifies healthcare providers' legitimacy and qualifications, ensuring they can receive reimbursement for services rendered. Credentialing is a prerequisite for billing any insurance company, and it involves a thorough assessment of a provider's education, training, professional experience, certifications, and internal requirements.

Building Patient Trust and Confidence

One of the key benefits of credentialing is that it instils confidence in patients. Patients rely on credentials and trust healthcare providers who are enrolled with reputable insurance companies known for their high standards. Credentialing validates a provider's qualifications and credentials, giving patients peace of mind in a world of healthcare scams and under-qualified practitioners.

Preventing Loss of Revenue

Prompt and timely credentialing ensures continuity of services, preventing disruptions that could lead to lost opportunities and revenue. Insurance companies often require periodic verification from healthcare professionals to maintain their partnership. Failure to provide adequate documentation or comply with their requirements may result in application rejection or withholding of funds, impacting the financial stability of the medical practice.

Streamlining Administrative Tasks and Reducing Overhead Costs

Credentialing helps streamline administrative tasks associated with billing and claim processing, reducing overhead costs for healthcare providers. It also indirectly affects patients' insurance deductible costs by giving them access to lower-cost healthcare services within their insurance network.

Expanding Patient Base and Practice Revenue

By obtaining credentials with multiple insurance companies, healthcare providers can expand their patient base by accepting a wider range of insurance plans. Being listed as an in-network provider on insurance websites improves visibility and credibility, attracting more patients. Additionally, credentialing allows providers to access a broader range of insurance benefits for their patients, making healthcare services more affordable and accessible.

Ensuring Compliance and Professionalism

Credentialing is a way to demonstrate professionalism and establish trust with patients. Healthcare providers are required to maintain high levels of professionalism, and credentialing helps ensure they meet industry standards and regulations. It also includes verifying licenses and setting alerts for upcoming license recertification exams, contributing to a healthcare provider's overall professionalism.

Facilitating Compensation and Reimbursement

Credentialing is a mandatory process for healthcare providers to receive compensation and reimbursement from insurance companies. Without proper credentialing, medical billing may be withheld or delayed, impacting cash flow and financial stability.

Enhancing Reputation and Patient Satisfaction

Credentialing improves the reputation of healthcare providers and serves as a source of reference for patients and their insurers. In an era of increasing medical errors and misdiagnoses, credentialing becomes a critical tool to gain patients' trust and confidence. Healthcare providers who undergo credentialing can effectively manage their online reputation and build long-standing relationships with patients.

Increasing Third-Party Reimbursements

Credentialing with multiple insurance companies increases a healthcare provider's business scope and revenue streams. By contracting with multiple insurers, providers can serve a larger patient base and gain access to a wider range of reimbursement opportunities.

Learn about CPT codes

CPT, or Current Procedural Terminology, codes are an integral part of the billing process. CPT codes are used to describe tests, surgeries, evaluations, and any other medical procedure performed by a healthcare provider on a patient. CPT codes tell the insurance payer what procedures the healthcare provider would like to be reimbursed for. CPT codes are copyrighted by the American Medical Association (AMA) and are mandatory for billing insurance companies. CPT codes work in tandem with ICD codes to create a full picture of the medical process for the payer. CPT codes are also used to track important health data and measure performance and efficiency.

There are three categories of CPT codes:

• Category I: This is the most common and widely used set of codes. It describes most of the procedures performed by healthcare providers in inpatient and outpatient offices and hospitals. Category I codes are numeric, five digits long, and are divided into six sections: Evaluation and Management, Anesthesia, Surgery, Radiology, Pathology and Laboratory, and Medicine.
• Category II: These codes are optional and provide additional information that can be used in performance management and future patient care. They are alphanumeric, five characters long, and are not reimbursed by insurance companies.
• Category III: These codes represent emerging and experimental technologies, services, and procedures. They are also alphanumeric, five characters long, and are mandatory if they replace an older technology. Category III codes are temporary and archived in the CPT manual for five years.

CPT codes are extremely large in number, covering thousands upon thousands of medical procedures. CPT codes are divided into different categories and sections based on the type of service and the part of the body the procedure relates to. Each CPT code is five characters long and may be numeric or alphanumeric, depending on the category.

CPT codes are essential for billing insurance companies and play a crucial role in the healthcare industry by facilitating reimbursement, tracking health data, and measuring performance.

Prepare for credentialing

Credentialing is a process that insurance companies use to verify your qualifications and ensure you meet their requirements for serving as an in-network provider on their panel. It involves verifying your education, training, and professional experience. Insurance companies are required to provide web-based directories listing all in-network providers, which consumers regularly use to locate physicians and providers who accept their insurance.

The first step in the revenue cycle is to obtain credentialing and a participating provider contract with insurance companies that are important to your service area. The credentialing phase is when the insurance company verifies all your credentials and checks that you meet their requirements for participating in their network. The contracting phase is where the company issues 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. Until your credentialing and contracting are complete, you may have the option to bill the network as an out-of-network provider, but there is no guarantee your claim will be processed, and it depends on the patient's policy if they will pay for out-of-network providers. Most government insurance companies, such as Medicare, Medicaid, and Tricare, will not pay any out-of-network providers.

• Consider establishing a business entity (LLC, S-Corp, PC, etc.) and obtain your tax ID. If operating as a sole proprietor, consider obtaining a federal tax ID instead of using your SSN.
• Obtain your professional liability insurance policy and be licensed in the state where you will provide services.
• Obtain an NPI number for yourself individually and your business entity.
• Create a profile with CAQH and keep it updated. Many insurance companies use this company as a credentialing database.
• Have your practice location ready and know which insurance networks you want to participate with.
• Contact the insurance companies' provider relations department and ask for a credentialing application.
• Make a list of the companies with which you want to be credentialed. Choose the largest insurers in your area, and consider asking other therapists about their experiences with specific insurers.
• Apply to become part of the insurer's provider panel. Most insurers offer an application on their website and will then give you a CAQH number, allowing you to fill out a CAQH application.
• Complete the Council for Affordable Quality Healthcare (CAQH) application. Most major insurers require this as part of their credentialing process.
• Follow up with each insurer to which you apply. It can take several months to get approved, and you may need to provide supplemental information.
• After your CAQH application is accepted, you will need to re-attest to the information on a quarterly basis.

Know your client's insurance plan

Knowing your client's insurance plan is a crucial step in the billing process. Here are some key points to consider:

• Obtain Client's Insurance Information: Ask the client to provide their insurance company name, ID number, and group number. This information is typically found on their insurance card. By doing this, you can verify their insurance coverage and ensure that you are billing the correct company.
• Understand Coverage and Benefits: Contact the insurance company or log into their website to confirm if the client has an active insurance plan. Check if the specific mental health services you plan to provide are covered under their plan. This includes understanding copays, coinsurance, and deductibles. For example, if the client has a deductible, they may need to pay the contracted rate for your services until they meet their deductible.
• Pre-authorization and Referrals: Some procedures may require pre-authorization or a physician's referral. Psychological testing, for instance, often requires pre-authorization from the insurance company. Additionally, some insurers may require a referral from a physician for certain services.
• Out-of-State Insurance Plans: If your client has an out-of-state insurance plan, there may be differences in reimbursement rates, prior authorization requirements, or the need for a single-case agreement. Claims submitted to out-of-state insurers may also take longer to process.
• Keep Client Information Up-to-Date: It is important to periodically confirm that your client's insurance information is current. Insurance details can change with a new calendar year or a change in employment. Regularly verifying insurance coverage helps avoid issues with claim denials or unexpected client balances.
• Utilize Practice Management Software: Consider using practice management software that includes insurance billing capabilities. This can streamline the billing process by automatically generating claims and tracking their status. TheraPlatform and SimplePractice are examples of such software.

Understand the basics of billing insurance for therapy

Billing insurance for therapy can be a complex and frustrating process, but it is a necessary part of running a therapy practice. Here are some key things to know about billing insurance for therapy:

Credentialing

The first step in billing insurance for therapy is to get credentialed with insurance companies. Credentialing is the process through which a therapist joins an insurer's provider panel. Therapists who are not credentialed with insurers cannot bill insurance directly, and the client must seek reimbursement, which is not guaranteed. To get credentialed, you need to:

• Make a list of the companies you want to be credentialed with, typically choosing the largest insurers in your area.
• Apply to become part of the insurer's provider panel through their website.
• Complete the Council for Affordable Quality Healthcare (CAQH) application, which is required by most major insurers.
• Follow up with each insurer as the process can take several months, and you may need to provide additional information.

Filling Insurance Paperwork

Once you are credentialed and accepted to a provider panel, you will need to bill insurance for each treatment session using the required paperwork. The insurer will provide a detailed guide to billing, including information on covered services and rates. To properly bill for mental health services, you need to select the correct Current Procedural Terminology (CPT) code, which depends on the procedure and the length of the session. Common CPT codes for therapy include:

• 90832: 30-minute psychotherapy
• 90839: 60-minute crisis psychotherapy
• 90847: 50-minute family psychotherapy when the primary client is present
• 90853: Group psychotherapy
• 96132: Neuropsychological testing services, such as evaluations for dementia or ADHD

Deadlines and Payment Schedules

It is important to be aware of the deadlines for submitting claims, as these vary from insurer to insurer. Medicare and Medicaid typically require claims to be submitted within 365 days, while private insurers tend to set shorter deadlines. Therapists working with multiple insurers may need to juggle multiple deadlines, so it is helpful to file all claims by the shortest deadline to avoid missing any.

Getting Insurance Payouts

There are several factors that can affect the wait time for insurance payments. To ensure you get paid as quickly as possible, it is important to discuss insurance policies with your clients, verify coverage and reimbursement rates, and help them navigate insurance reimbursement. It is also crucial to establish policies for when a claim is denied and know the specific policies and requirements of the insurer.

Common Billing Mistakes

Billing insurance for therapy can be a challenging process, and mistakes are common. Some things to keep in mind to avoid mistakes include:

• Double-checking all information and claims for accuracy before submission.
• Verifying client insurance coverage and benefits before providing treatment.
• Submitting claims within the required timeframe to avoid rejections due to timely filing.
• Staying calm and following up with the insurer if a claim is denied or rejected, as this can often be corrected or refiled.

Frequently asked questions