What Is Behavioral Health in Medical Billing?

Behavioral health is an evolving field that is becoming increasingly important and recognized in the healthcare industry. 

Although quite complex, many behavioral health services are now accepted among healthcare providers.

In this comprehensive post, we will dive into what is behavioral health in medical billing to explain how it works and what it covers.

Understanding Behavioral Health

Behavioral health refers to mental health disorders, life stressors, crises, stress-related symptoms, and substance use disorders. That is why behavioral healthcare providers assist patients to prevent these conditions, diagnose them when they are present, and treat them as necessary. 

Behavioral healthcare providers work in hospitals and inpatient care settings, psychiatric care institutions, addiction and eating disorders clinics, outpatient clinics, schools, and autism programs. So, behavioral health professionals might work with alcohol and substance use disorders but also with dual diagnoses, autism, ADHD, etc.

While the standard medical billing process focuses on standard services, including exams, testing, and follow-up visits for any type of chronic condition, behavioral health in medical billing is partially different. Behavioral health medical billing refers to billing for services patients receive for long-term mental health conditions. Depression, anxiety, bipolar disorder, and schizophrenia are among the most common conditions.

The most important aspect of billing for mental health services is the restrictions associated with both– the facility and the patient. The restrictions vary from limiting the number of visits to setting the time limits of the visit.


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Behavioral Health Billing Bases

Behavioral health billing is complex because the charges differ for different services and providers’ credentials. Another problem that might appear is processing preauthorization correctly. Preauthorization for behavioral health facilities is completely different from other specializations. The reason for this includes the unique nature of behavioral health treatments, the different authorization criteria of insurance companies, and the other specific requirements set by insurance providers. This is due to the potentially high costs and long duration of treatments, such as inpatient stays for substance abuse recovery or ongoing counseling.

Behavioral health coding resources provide practices and care teams with a list of codes used to administer different services. These might include codes for different therapy sessions, psychiatric evaluations, and crisis intervention services.

Under HCPCS, there are many codes that include conditions like alcohol and drug assessment, services, methadone administration, behavioral health counseling and therapy, behavioral health prevention services, sexual offender treatment services, and services related to prenatal care.

Documentation Requirements

We want to point out that thorough documentation is very important in behavioral health billing. It ensures the right reimbursement and compliance with regulations. You must undergo a diagnostic assessment, look at the insurance provider’s treatment plans, and take detailed progress notes during the treatment.  

A thorough assessment is crucial for establishing the right diagnosis of the patient’s medical condition. Based on the diagnosis, the patient will receive the appropriate type of care. The treatment plan should outline the client’s specific goals, interventions, and expected results. It should be tailored based on the client’s unique needs and must thoroughly justify the treatment as necessary and effective

Detailed progress notes are important to document the given services and how the client responded to treatment. 

When a client is discharged from treatment, the documentation should be completed. It should include a thorough discharge summary and recommendations for future care.

Insurance Coverage for Behavioral Health

Our experience shows that insurance coverage for behavioral health services is complex because it requires an understanding of the healthcare system and the challenges faced by the people seeking help and treatment.

Payers often have specific limitations on the number of sessions and types of therapy covered and may require more frequent preauthorizations.

Several insurance coverage options are available for people seeking behavioral and mental help.

  • Private insurance

Many private insurance plans offer coverage for behavioral health services. It depends on the coverage, but it may include inpatient or outpatient treatment, and medication management.

  • Medicaid

This is a government-funded health insurance program that provides coverage for low-income people. Remember that the specific coverage and eligibility requirements may vary by state.

  • Medicare

This is a federal health insurance for people aged 65 and over who have some disabilities and need behavioral services. This insurance coverage includes outpatient and inpatient treatments.

Reimbursement Challenges in Behavioral Health Billing

We find that behavioral health billing faces some challenges because of the complexity of diagnoses and procedures. One big challenge is deciding which services should be financed by healthcare providers. The billing costs and reimbursement rates vary depending on whether the services are counseling sessions, medication management, or psychiatric assessments.  

The complex coding structure represents a big obstacle for healthcare providers. Do you wonder why? If a patient needs a multilayered treatment or assessment, a physician should find all the correct code combinations.

Moreover, a lack of insurance reimbursement rates might make providers refuse to provide many services or accept patients with insurance rights for lower payments. Under-coverage for mental health services leads to partial treatment of patients. That may result in worsening of symptoms and low quality of life.

Lastly, successful behavioral health billing depends on the correct documentation. Incomplete or incorrect documentation might lead to denied claims. 

Outsourcing Options for Behavioral Health Billing

As an outsourcing company specializing in healthcare and insurance, we know that outsourcing behavioral billing can offer several advantages. 

Billing companies have teams of experienced professionals who understand behavioral health billing sectors, like coding, claim submission, and reimbursement. This knowledge leads to correct billing, with a lower risk of denials and higher reimbursement. Our goal is to free up your staff to focus on patient care. Outsourcing also eliminates the need for you to hire and train in-house billing staff, which significantly reduces overhead costs.

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Now that you know what is behavioral health in medical billing, you can understand how complex it is and why you may need to outsource such services. 

Behavioral health refers to mental health disorders, crises, stress-related symptoms, and substance use disorders. Behavioral health billing is complex because the charges differ for different services and providers’ credentials.

Complete documentation reassures the right reimbursement and compliance with regulations. Yet, behavioral health billing faces diverse challenges, including denied claims and complex coding structures. 

That is why we recommend hiring outsourcing companies specializing in these tasks for efficient work and results.