Psychiatry is the branch of medicine focused on the diagnosis, treatment and prevention of mental, emotional and behavioral disorders. A psychiatrist is a medical doctor (an M.D. or D.O.) who specializes in mental health, including substance use disorders.


Medical billing can be extremely complicated on its own, but medical billing for mental health services  bring its own set of unique challenges. Between the types of services offered, pre-authorization, unbundling concerns, and the size and time availability of  office staff, mental health facilities are often at a disadvantage compared to other health professionals.

By understanding the process for behavioral health billing, providers can spend more of their time and energy focusing on what truly matters—their patients. That’s why  DenialsManagement believes in doing as much as possible to lift the weight of medical billing off of medical professionals whose time is better served in other areas. 

Double-check each patient’s insurance and coverage:

Our first tip is to ensure that you know each of your patient’s insurance plans and benefits before each visit. This may sound extremely time intensive—and it can be. However, making sure you know the coverage available for each patient before they receive any services will lead to a larger return in the end. In order to know what coverage your prospective patients have, we recommend conducting a verification of benefits (VOB) for each patient before any treatment or services are received.

What Is a Verification of Benefits?

A verification of benefits checks the patient’s policy in regards to the service they visiting for, and gives providers information that is not readily available from a patient’s insurance card. Performing a VOB is important because even if a patient has active insurance, the service you provide may not be a benefit that is covered. By checking the VOB, you can ensure that a patient is covered for the services they are seeking, and determine how much their insurance company will pay for these services. 

How to Perform a Verification of Benefits

Many insurance companies have online provider portals where you can quickly and easily verify a patient’s eligibility and benefits. If the insurance does not have an online portal or the portal does not answer all of your questions, you can also call the insurance company’s provider helpline using the patient’s account number from their insurance card to discover their benefits. Another option may be to hire a third-party billing company, or utilize a third party VOB software, to conduct the VOB for you. 

Overall, it’s extremely important to understand what benefits and coverage each patient has so that you don’t end up with rejected claims and unpaid bills.

2. Understand CPT Codes

CPT codes are “common procedural technology” codes and insurance providers use CPT codes to determine the amount of reimbursement given to healthcare facilities. When dealing with behavioral health billing, or really any type of medical billing, it is critical to understand the services your practice offers and know the associated CPT codes. Some mental health service providers will use the same CPT code for every patient, however, this is not legal or recommended. 

For behavioral healthcare practitioners, there are two types of CPT codes you might use: E/M codes and psychiatric evaluation codes. E/M codes should be used when evaluating a new medical issue and must have three documentation elements provided. These three elements are history, examination, and medical decision-making. 

  • History: The history section includes the history of the present illness, review of systems, and the past family and social history.
  • Examination: The examination section includes the type of examination performed, the patient’s history, and the nature of the problem.
  • Medical decision-making: The medical decision-making section includes the number of diagnoses or treatment options documented during the specific encounter, the complexity of the data reviewed, and the risk of complications. 

Psychiatric evaluation codes, on the other hand, are used for a diagnostic assessment. A psychotherapy session can include E/M services, but the time associated with the E/M service cannot count toward the time of the psychotherapy service. One example of this would be discussing new medication options and side-effects during a psychotherapy session. 

To reduce the risk of claim rejections, it’s important to know which CPT code to use and how to use them. You can discover the criteria for CPT codes here to determine which code to use for which service. It’s imperative that you use the correct code because if you don’t the claim can and may be rejected.

Understand How to Submit Claims Properly

In order to receive reimbursement from a claim, not only do you have to file the correct code to the correct insurer, but you also have to submit the claim in the correct billing format, which can vary depending on the insurance company. Make sure you know the insurance company’s preferred filing method and that you file within the time allowed by the insurance plan. (The insurer’s preferred method of receiving claim filings is a great question to ask during the Verification of Benefits process!)

The Claim form is the claim form used by many of the major insurance companies for specialized health centers such as mental health and rehabilitation clinics, so this is the form you will want to familiarize yourself with. The claim can be filled out on paper or electronically, with numerous software programs loaded with the current version of the form and instructions for filing. For more information on filling out and submitting the claim form.

Eligible Professionals

  • Clinical social workers (CSW) and Licensed Clinical Social workers (LCSW);Clinical nurse specialists (CNS);Nurse practitioners (NP, APN);Physician assistants (PA);Certified nurse-midwives (CNM); and Independently Practicing Psychologists (IPP).Medical professionals (MD, DO), Board Certified Behavior Analyst (BCBA), Qualified Mental Health Associate (QMHA) .Qualified Mental Health Professional (QMHP)
  • MD’s and DO’s can perform E/M services and may add psychotherapy. No other type of provider can submit E/M codes.
  • All provider such as LCSW, LMFT and PHD are limited but can submit psychotherapy codes (the MD or DO can submit these as well):
  • Not all payers will contract LSCW or LMFT so many will bill incident to another provider. Also be careful with this as many payers do not allow a patient to be treated by a provider with such credentials.
  • PhD’s, MD’s and DO’s can all perform initial evaluations:


  • Psychotherapy is the treatment of mental illness and behavioural disturbances in which the physician or other qualified health professional, though definitive communication, attempts to alleviate the emotional disturbances, reverse or change maladaptive patterns of behavioural and encourage personality growth and development.


  • The patient’s medical record must contain documentation that fully supports the medical necessity for services included within this policy. This documentation includes, but is not limited to, relevant medical history, physical examination, and results of pertinent diagnostic tests or procedures
  • For psychotherapy services, there should be documentation of the patient’s capacity to participate in and benefit from psychotherapy, especially if the patient is in any way cognitively impaired.
  • The medical record should document the target symptoms, goals of therapy and methods of monitoring outcome. There should be documentation in the medical record of how the treatment is expected to improve the health status or function of the patient.

Psychotherapy- Interactive Complexity

Interactive complexity refers to specific communication factors that complicate the delivery of a psychiatric procedure. Common factors include more difficult with communication with discordant or emotional family members and engagement of young and verbally undeveloped or impaired patients

Interactive complexity Documentation guidelines

To report 90785 at least one of the factors must be present 

  1. The need to manage maladaptive communication (related to, e.g., high anxiety, high reactivity, repeated questions, or disagreement) among participants that complicates the delivery of care.
  2. Caregiver emotions or behaviour that interferes with the caregiver’s understanding and ability to assist in the implementation of the treatment plan
  3. Evidence or disclosure of a sentinel event and mandated report to a third party (e.g., abuse or neglect with report to state agency) with initiation of discussion of the sentinel event and/or report with patient or other visit participants 
  4. Use of play equipment, other physical devices, interpreter or translator to communicate with the patient to overcome barriers to therapeutic or diagnostic interaction between the physician or other qualified health care professional and a patient who;
  1. Is not fluent in the same language as the physician or  other qualified health care professional, 
  2. Has not developed, or has lost, either the expressive language communication skills to explain his/her symptoms and response to treatment or receptive skills to understand the physician or other qualified health care professional if he/she were to use typical language for communication 

2019 update for Psychotherapy Coding:

We have new CPT codes specifically for Screening, and test administration and Evaluation. ( As Per CMS Approval 



  1. Mental Health screening is the attempt to detect mental health symptoms in a large number of apparently healthy individuals. This can be done in many different ways from paper-based instruments in the exam room, to computer based screening in the waiting room, to physician interviews during a routine exam. 


Once the potential for a mental health condition has been established by either screening or the presence of a comorbid condition, testing is used to determine the presence or absence of that mental health condition. 

  1. For the purpose of billing, test administration requires “medical necessity”/ must be justified by a related ICD-10 code. Test administration can be performed by a physician/ qualified healthcare professional, a technician under the supervision of a physician/ qualified healthcare professional, or a computer.


  • Test evaluation services are designed to cover the physician/ qualified healthcare professional’s time in evaluating the results of a patient’s mental health tests and determining a plan of action.
  • CPT 96130 is used by “Psychological testing evaluation services by physician or other qualified healthcare professional, including integration of patient data, interpretation of standardized test results and clinical data, clinical decision making, treatment planning and report and interactive feedback to the patient, family member(s) or caregiver(s), when performed; first hour”.