Mastering behavioral health billing claims processing is what will set you apart from others in the market. This process is integral to the financial success of your organization. Providers learning and understanding the ins and outs of this process, what resources to utilize, and how to streamline each step will help them tackle issues in their revenue cycle and optimize their bottom line.

The behavioral health revenue cycle involves every financial process from when a client or patient schedules an appointment to when they pay their bill in full. Here, we will cover the central component of the revenue cycle and the initial component of the back-end process.

Understanding Claims

The middle section of the revenue cycle is the claims process. Efficient management of behavioral health claim processing enables providers to get payments in hand more quickly and with fewer obstacles.

Claims Processing Terminology

• Claim – A claim is a request for payment made to an insurance company for a service rendered by a provider. They can be sent electronically if they follow the required HIPAA-secured format (837i/837p). These claims can be sent manually (claim form CMS-1500). Most providers are highly familiar with this term and its purpose.
• Claims Reconciliation – Claims that are sent daily or weekly must be reconciled with what was received or rejected from the clearinghouse or the payer. A practice management system should come equipped with billing reconciliation reports that enable you to track your claims through the entire behavioral health billing claim process. (Claims can sometimes get lost, and reconciliation helps you pinpoint those losses for resubmission. A rejection is pre-billing, and denial is post-billing)
• Denial Avoidance – This is the process/effort of avoiding denials by assessing for errors/potential causes before submission. To avoid a denial, the provider must include the authorization number for services on the claim (if necessary), the required documentation (complete and accurate), adhere to the payer filing/appeal deadlines, and code the claim with the correct CPT Code, Modifier, and Diagnosis.
• DSM-5 – The American Psychiatric Association (APA) published The Diagnostic and Statistical Manual of Mental Disorders (DSM-5) manual. It Is used to define and classify mental disorders, improving overall diagnoses, treatment, and research.
• ICD-10 – The International Classification of Diseases (tenth revision) is a system that contains codes for various diseases, signs, symptoms, and abnormal findings. ICD-10 codes are used primarily for insurance purposes. They also provide valuable data for improving healthcare and understanding complex diseases/symptoms.
• Location Code – These are the standardized codes used to identify the place where services were rendered. (e.g., 03 for school-rendered services, 11 for in-office services, etc.). These are also known as place-of-service codes.
• CPT/HCPCS – Healthcare Common Procedure Coding System (HCPCS) involves two levels of codes. Level 1 consists of Current Procedural Terminology (CPT) codes, which are made up of 5-digit numbers and are managed by the American Medical Association (AMA). These identify the type of service and procedures ordered by the licensed professional or physician. Level 2 consists of alphanumeric codes that primarily include non-physician products, supplies, and procedures that are not included in the CPT set.
• Billing Provider – The individual or organization that rendered and billed for a service.
• Modifier – This is a 2-character code appended to a CPT code that provides additional claim details to the payer.
• Rendering Provider – The provider who rendered the services to the patient. The rendering provider is usually face-to-face with the patient. It is critical to know the payer policy for rendering providers.
• Clearinghouses – This company functions as a middleman between a healthcare provider/organization and an insurance payer. They receive claim information from the provider and assess it for errors, verifying that it is compatible with the payer software/requirements. Some payers require a clearinghouse in order for an organization to bill them. Clearinghouses will be reviewed in greater detail later on.

The Claims Cycle

In order to master behavioral health claim processing, providers need a firm grasp of the claim cycle and what it entails. While the revenue cycle starts when the patient schedules a visit, the claim cycle starts after services are rendered. Once you have rendered services to a client/patient, it is time to file a claim for reimbursement. There are many steps and procedures that go into filing claims, but the main steps are as follows:

• STEP 1: The first step is to file the claim with the insurance payer. Once you have verified the client/patient’s coverage and demographic information, you can submit a claim to the payer. Before submission, your review process should be thorough to reduce your chance of denial. Providers should edit for errors before submitting the claim.
• STEP 2: Remember, there is a middleman between providers/organizations and the payer. If the claim is sent electronically, it should pass through a clearinghouse. They will review the claim, assessing it for errors or potential causes for denials. At this time, the claim is either accepted and sent on to the payer or rejected at the clearinghouse level. The claim will never show on an EOB or be in the payer system if rejected. The clearinghouse must clear the claim for it to be passed on to the payer. Providers are responsible for resolving the causes for the rejection before resubmission can happen.
• STEP 3: The claim is accepted by insurance for processing and processed by the payer. This is referred to as the adjudication process.
• STEP 4: Next, Payers will issue either remittance (if the claim was approved) or denial information to the provider. If a patient is covered for services and the submitted claim includes all of the necessary and accurate information, it should be approved. If the payer finds cause to deny your claim, they will. If their claim were approved, then payment would be delivered to the provider at this time. Once a claim has been approved or denied by the payer, the client/patient would receive an Explanation of Benefits (EOB).
• STEP 5: Once the claim has been processed, clients/patients are then responsible for any applicable balances. There are methods for billing insurance claims and patient responsibility balances concurrently that providers might want to consider to jumpstart that patient payment process.

The Takeaway

To learn more about behavioral health billing software that can make a difference to your claims process schedule a consultation now to learn more about how your facility can maximize reimbursements.

To learn more about claims processing workflows, revenue cycle management, and more download our free white paper below.

Claims Processing White Paper