Top 5 Psychiatry Billing Mistakes Practices Make (and How to Avoid Them)

There is more to running a psychiatry practice than taking care of patients you must also ensure billing is done properly! But experienced providers and staff can also make mistakes that result in delays, denied claims or lost revenue.

Here are the 5 most common psychiatry billing errors practice’s make and simple strategies for avoiding them.

Using Incorrect CPT Codes

The mistake:

Psychiatry has its own array of Current Procedural Terminology (CPT) codes. But many institutions rely on out-of-date or incorrect ones. For instance, charging a 60-minute psychotherapy visit as a 45-minute one may result in reduced reimbursement.

How to avoid it:

• Refer to the latest CPT code books and/or software at the time the service is being coded.
• Educate your billing team on psychiatry-oriented codes.
• Verify the session was of the appropriate length and complexity before submitting claims.

Pro tip: Known psychiatry codes include 90791 (psych eval), 90837 (60 min therapy), 99213 (med management). Use them correctly.

Missing Prior Authorizations

The mistake:

Most insurance companies require prior authorization for certain psychiatric treatments or medications. Denials can be full claims denials if they do not obtain an approval.

How to avoid it:

• Designate a staff person to monitor insurance authorization rules.
• Benefits should always be checked prior to the first appointment.
• Record the and date of approval in the pt chart.

Failing to Check Patient’s Insurance on Every Visit

The mistake:

Superimposing over it now: Another assumption that a patient’s insurance hasn’t changed, which the doctor missed, would result in a rejected claim and surprise bills facing the patient. Effective Revenue Cycle Management plays a crucial role in catching such discrepancies early, helping to reduce claim denials and improve overall patient satisfaction.

How to avoid it:

• Check insurance at each visit even if someone is a long-term patient.
• Save time using electronic eligibility tools.
• Make it a front desk routine.

Even minor shifts for example, staying in the same insurer’s network but changing to a different plan can influence coverage.

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Underbilling for Services

The mistake:

Some psychiatrists under code sessions to avoid audits or take on a conservative visage. This, however, results in reduced income and under-appreciation of the service offered.

How to avoid it:

• Bill what’s actually provided not what you think is “safe.”
• Measure session lengths more accurately with time-tracking or EHR-fused timers.
• Teach your team how to use code correctly and how to document it.

Reminder: If you spend 60 minutes on therapy, code it as such.

Poor Documentation That Leads to Claim Denials

The mistake:

Insurers frequently reject claims because clinical notes are incomplete or ambiguous. An appropriately billed service can be denied if it is not supported by good documentation.

How to avoid it:

• Utilize EHR templates built for mental health.
• Ensure that any and all notes reflect time spent, medical necessity, and treatment objectives.
• Don’t be mistaken by typos or ambiguous texts.

If you don’t document it, it didn’t happen as far as the payer is concerned.

Final Thoughts

Errors on a bill can be expensive not only in dollars and cents, but also in patient trust and time. The good news? The good news is that most billing errors can be resolved relatively quickly if practices have the right systems in place and the right billing education for the team. 

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