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Billing in mental health practices continues to evolve in response to ongoing changes in payer policies, telehealth regulations, and clinical documentation standards. As these systems become increasingly complex, staying current has become essential not only for reimbursement but also for maintaining compliance and patient trust. Unfortunately, even well-established practices are prone to common mental health billing mistakes, including missed authorizations, incorrect coding, and insufficient documentation. These issues can result in delayed payments, denied claims, or audit risks. This article outlines the most common behavioral health billing errors and guides in navigating them using accurate, up-to-date CPT coding practices in 2025 and beyond.
Understanding the Unique Nature of Mental Health Billing in 2025
Mental health billing requires a distinct approach, shaped by time-based coding, telehealth-specific rules, and variable documentation standards. The following areas represent the most critical elements every practice should understand to reduce denials and improve reimbursement outcomes.
Time-Based CPT Codes vs. Procedure-Based Billing
One of the defining features of CPT coding in mental health is its reliance on time-based session codes. Unlike many medical specialties, where the duration of the session largely determines bill for each procedure or intervention, psychotherapy billing is distinct.
For example:
- 90834: Individual psychotherapy, approximately 45 minutes
- 90837: Individual psychotherapy, approximately 60 minutes
- 90832: Short session, approximately 30 minutes
Accuracy here is essential. Billing 90837 when only 40 minutes were documented may not only lead to claim denials, but also draw scrutiny under payer audits. On the other hand, underreporting time may result in lower reimbursement. The key is ensuring that the session duration aligns with both the clinical documentation and the billed CPT code.
Behavioral Health Modifiers: GT, 95, and Beyond
Most telehealth sessions require behavioral health modifiers to indicate the mode of service delivery. In 2025, the most commonly used modifiers include:
- Modifier 95: Synchronous telemedicine service rendered via real-time interactive audio and video
- Modifier GT: Similar to 95, though some private payers still prefer it over 95
- Modifier FQ: Audio-only services (used in certain states and by some Medicaid plans)
Incorrect or missing modifiers are among the most common errors in behavioral health billing reported by clearinghouses. Practices should maintain an up-to-date list of which payers require which modifiers, especially when billing across multiple states.
Increased Telehealth Sessions & Related Billing Complexities
With patients increasingly opting for virtual care, telehealth billing has become a core function of most mental health practices. However, not all services are reimbursed equally. For example:
- Some payers require telehealth sessions to be delivered via HIPAA-compliant platforms
- Others may limit the number of reimbursable telehealth visits per year
- Audio-only sessions (e.g., during emergencies) often require additional documentation or specific codes/modifiers
Furthermore, time-based CPT codes (such as 90837) still apply to telehealth services but must be fully supported by documentation that indicates the session met the required time and clinical criteria.
Failure to account for these variables can lead to denied claims, reduced payment, or compliance issues with insurance regulations.
Payer-Specific Documentation Requirements
Perhaps the most underestimated challenge in mental health billing is variability among payers. Documentation that satisfies one insurance provider may not be sufficient for another insurance provider. For instance:
- Medicare often requires more detailed treatment plans and goal progression notes
- Commercial payers may audit session frequency and time-to-diagnosis patterns
- Medicaid in some states limits the number of services per diagnosis code or provider type
Therefore, having a one-size-fits-all approach to progress notes and billing documentation is increasingly risky. Providers and billing teams must understand and adapt to payer-specific billing guidelines, particularly when handling behavioral health services.
Top Billing Mistakes Mental Health Providers Make
Even well-managed practices are vulnerable to billing errors that can delay payments, trigger audits, or compromise compliance. In 2025, with evolving payer requirements and closer scrutiny of claims, avoiding these common mistakes is critical to maintaining financial and operational stability. Below are the most frequent mental health billing errors clinicians and administrators should actively monitor and address.
Incorrect or Incomplete Patient Information
Administrative oversights such as misspelled names, incorrect insurance IDs, outdated policy details, or inaccurate dates of birth are among the most common reasons claims are denied. These may seem minor, but even a single error can disrupt the entire reimbursement cycle.
To avoid such issues, it's essential to verify all patient information at intake and at regular intervals, particularly before authorization renewals or policy changes.
Improper CPT or ICD-10 Coding
CPT coding in mental health requires accuracy in both service type and duration. Common errors include billing 90837 for sessions that lasted less than 53 minutes or misusing add-on codes, such as 90833, without proper documentation of an evaluation and management service.
On the diagnostic side, vague or outdated ICD-10 codes can reduce the likelihood of reimbursement and increase the risk of audits. Ensuring your coding reflects both clinical accuracy and payer-specific expectations is key to avoiding denials or payment delays.
Lack of Pre-Authorization or Awareness of Coverage Limits
Many insurance plans require pre-authorization before therapy begins or after a set number of sessions. Failing to obtain approval or monitor coverage limits can result in unpaid sessions and unexpected patient billing.
Practices should establish systems to track the number of authorized sessions, set reminders for re-authorization requests, and confirm benefits before initiating services.
Missing or Inadequate Documentation
Payers expect detailed clinical documentation that fully supports the services billed. If a claim is submitted for a 60-minute session (such as 90837), but the documentation lacks start and end times or therapeutic content, reimbursement may be denied.
To protect revenue and ensure compliance, progress notes must be timely, specific, and aligned with treatment plans. This includes session duration, clinical observations, interventions used, and response to treatment.
Late Submission of Claims
Most insurers enforce timely filing limits, typically between 90 and 180 days from the date of service. Missing these deadlines usually results in an automatic denial, with little to no recourse for appeal.
Establishing regular billing schedules and internal claim audits can help ensure timely submission and minimize preventable revenue loss.
Failure to Follow Up on Denied Claims
Claim denials are often fixable, yet many practices lack a structured process to identify, correct, and appeal them. Without follow-up, revenue is lost unnecessarily.
Effective denial management involves identifying trends, reviewing payer feedback, correcting errors, and resubmitting claims promptly to ensure timely resolution. Every denied claim should be viewed as an opportunity to recover lost income and enhance future billing practices.
How to Avoid Common Billing Mistakes in Mental Health Practices?
Preventing mental health billing mistakes requires more than just fixing denied claims. Practices must actively build systems that reduce risk, improve accuracy, and align with evolving payer standards. From using the right tools to training staff and monitoring documentation, here are practical steps every mental health provider should take to stay compliant and protect revenue.
Use Specialized Mental Health Billing Software
Using software tailored to behavioral healthcare significantly reduces billing errors. General-purpose systems often lack the flexibility needed for CPT coding in mental health, such as time-based sessions and telehealth-specific modifiers.
Platforms like TherapyNotes, TheraNest, and SimplePractice help ensure compliance by offering features such as built-in code validation, telehealth support, and real-time insurance verification. These tools are especially effective for managing telehealth billing, verifying behavioral health modifiers, and minimizing manual data entry that can lead to common billing errors.
Verify Insurance and Authorizations at Every Stage
Outdated or incorrect insurance details are a leading cause of claim denials. Don't limit insurance verification to the intake stage. It should be done before the first session and repeated when a new authorization cycle begins or if the treatment plan changes.
Verification must include:
- Number of sessions approved
- Expiration date of the authorization
- Coverage for telehealth or audio-only services
- Any prior authorization requirements
Staying proactive helps prevent billing compliance issues and reduces the risk of unpaid sessions.
Train Staff on CPT and ICD-10 Updates
Both CPT codes and ICD-10 diagnosis codes are updated annually, and payer expectations continue to evolve. All team members, including clinicians, billers, and support staff, should understand how to accurately document and code psychotherapy services.
Focus areas for training include:
- Correct use of 90834 and 90837 based on session time
- When to use add-on codes like 90833
- Documentation required to support longer or higher-complexity sessions
- Common ICD-10 errors that lead to denials or audits
Ongoing training improves coding accuracy and strengthens internal mental health billing workflows.
Standardize Clinical Documentation
Payers expect documentation to align closely with the services billed. Inadequate or inconsistent progress notes are one of the most frequent behavioral health billing errors.
Ensure documentation includes:
- Exact session start and end time
- Clinical interventions used
- Patient progress on the treatment plan
- Rationale for the code selected
Good documentation supports the CPT code, justifies medical necessity, and reduces risk under both private and government audits.
Monitor Denials and Follow Up Without Delay
Denied claims are a reality, but ignoring them can lead to long-term revenue loss. Every practice should have a structured process in place to review denials, correct any issues, and resubmit claims when possible.
Track the most common reasons for denials. Whether it's incorrect CPT coding, missing documentation, or outdated patient information, fixing these patterns early improves billing performance and speeds up reimbursement.
Consider Outsourcing to Mental Health Billing Experts
For many small or mid-sized practices, managing billing in-house can become overwhelming. Outsourcing to a firm that specializes in behavioral health billing can reduce administrative workload and improve financial outcomes.
Choose a vendor that:
- Understands payer-specific rules for mental health services
- Keeps up with changes in telehealth regulations and modifiers
- Provides transparent reporting and appeal support
This can be especially beneficial for solo providers or group practices with limited internal billing capacity.
Avoiding Billing Mistakes in Mental Health Practices with MentalCare
Avoiding common billing mistakes in mental health practices is crucial for maintaining a healthy and compliant revenue cycle. At MentalCare, we specialize in helping providers minimize costly errors, including incorrect CPT codes, missed authorizations, and inadequate documentation. With ever-changing payer policies in 2025, even a single mistake can result in delayed payments or denied claims.
Our expert team provides customized mental health billing services specifically to the needs of therapy and psychiatry practices. We stay ahead of industry updates so you can focus on delivering care, not paperwork. Whether you're a solo provider or a group practice, MentalCare ensures your billing is accurate, timely, and fully compliant. Let us help you protect your practice and your peace of mind.