You Can Overcome the Ups and Downs of Mental Health Billing

Lea Chatham January 24th, 2014

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Mental health providers have traditionally set up practices that are largely self-pay. Those who take insurance often do so as part of an EAP program or other partnership that allows them to quickly build a practice but may only require billing to one or two payers. Only a few have transitioned to a largely insurance-based business model. The self-pay model is great for providers because they don’t have to worry too much about insurance billing, but it can be hard on consumers who need to pay out of pocket for mental health services, which can be expensive.

Times are changing, and mental health providers have some choices to make as they move forward. The Affordable Care Act (ACA) mandates mental health coverage in insurance plans, and the 2008 mental health parity law requires payers to offer mental health coverage with co-pays similar to those for other medical services.

For patients, this means less out of pocket, which is great, but for mental health providers it means they may have to accept insurance to stay competitive in a changing market. This brings many mental health providers to ask three questions:

  1. “Should I accept insurance?”
  2. “If I accept insurance, can I manage the billing myself?”
  3. “Should I remain independent or join a larger practice that can take care of my billing?”

These questions have become more pressing recently for two reasons.

First, reimbursement is actually up for mental providers so there is a financial incentive to take Medicare and commercial insurance. The Medicare 2014 Fee Schedule includes increases of 8% for clinical psychologists and social workers and 6% for psychiatrists.

At the same time the healthcare industry is preparing for ICD-10, which is the most significant coding change to happen in forty years. And, according to the American Psychiatric Association (APA) it is a bigger shift for “many psychologists and other mental health professionals who are far more attuned to the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders (DSM).”

The truth is that mental health providers don’t have to give up their independence to accept insurance. It isn’t an all or nothing scenario.

Here are 5 tips to succeed in staying independent while adapting to the changing times:

  1. Don’t go old school. Practices need medical billing software to streamline and simplify the process of insurance billing. Choose a simple, cloud-based solution that offers fully integrated practice management, billing, and EHR.
  2. Use all the tools. Don’t just submit claims, use eligibility verification, electronic remittance advice (ERA), electronic funds transfer (EFT). Use your EHR to document visits and create electronic superbills. This will provide more accurate documentation, save time, and improve billing.
  3. Stay on top of it. To keep your cash flow steady, you need to spend a little time on your billing every day. Tweet This
    Submit claims daily, check your clearinghouse reports daily, and resolve problems as soon as they happen. It’s worth an hour a day.
  4. Get educated. Use the resources available through your medical society and software vendor to learn everything you can about how to be successful at medical billing.
  5. Be realistic and honest. Not everyone can do their own billing. It isn’t that hard but it does take a little education, practice, and commitment. If you’d rather spend your time taking care of patients or taking care of yourself, outsource your revenue cycle management. There are great, affordable options. Just educate yourself so you can make the right choice.

Billing for mental health is changing. There are decisions about how to move forward that need to be made. But there are more options now and with the right solutions, anyone can overcome the ups or downs that come along. If you aren’t sure you can do it on your own, read To Hire or Not to Hire a Billing Service to see if outsourcing is right for your practice.

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