Why Do Mental Health Claims Get Denied? 10 Reasons

Mental health is a critical aspect of an individual’s overall health and well-being. However, it can be challenging to get the right treatment, especially when it comes to billing claims. Denials of mental health billing claims have become more common, preventing patients from getting the care they need. When billing claims are denied, it creates more than just a financial burden; it can also cause patients to lose access to treatment and compromise their recovery. In this blog post, we will look into the top 10 reasons why mental health billing claims can get denied and how they can be prevented.

1. Inaccurate or Incomplete Patient Information

One of the reasons why mental health billing claims get denied is when patient information is inaccurate or incomplete. This includes missing or incorrect personal information, such as dates of birth, contact details, and insurance information. Providers must ensure that patient information is complete and accurate to avoid billing issues.

2. Lack of Medical Necessity

Insurance companies often deny claims when they do not believe that a service or treatment is medically necessary. Providers must document the medical necessity of any service provided and ensure that it aligns with the patient’s condition and diagnosis.

3. No Referral or Pre-Authorization

Insurance companies may require a referral or pre-authorization from a primary care provider before they cover certain mental health services or treatments. Providers should ensure they have obtained the necessary documentation before rendering any services or treatments to avoid denials.

4. Incorrect Billing Codes

Billing codes determine the charges for rendered services or treatments. If the wrong codes are used, it can lead to billing claim denials or potentially delay payment. Providers must ensure they are using the correct billing codes that align with the provided services and treatments.

5. Time Limit Exceeded

Providers have a limited amount of time to submit billing claims to insurance companies. If the provider misses the filing deadline, it can cause a rejection or delay of reimbursement. Providers must send out billing claims within the permitted timeframe to avoid denials.

6. Claims Exceeded Allowed Services

Insurance companies have pre-approved limits for certain mental health services or treatments. If the provider exceeds the allowed limit, it could lead to a denial of the billing claim. Providers should ensure that they follow the pre-approved limits to avoid claim denials.

7. Billing for Inappropriate Services or Treatments

Providers must make sure the services or treatments they bill for align with the patient’s condition and diagnosis. Trying to bill for inappropriate mental health services or treatments may trigger denials by insurance companies.

8. Using the Wrong Modifier Codes

Modifier codes provide additional information about the services or treatments that the provider delivers. Providers must ensure they use the right modifier codes to avoid billing claim denials.

9. Balance Billing

Providers may sometimes want to bill the patient for the balance of an amount that insurance does not cover. This is against insurance rules and can lead to claim denials. Providers must understand the policies of an insurance company and avoid balance billing.

10. Inadequate Documentation

Providers must ensure that they fully document the services and treatments rendered. Lack of adequate documentation may signal an insurance company of fraudulent activities, leading to claim denials.


Billing claims denials can be frustrating, both for providers and patients. However, understanding the reasons why mental health billing claims get denied is essential to avoid them. Providers must ensure they provide accurate billing information and adhere to insurance policies and guidelines. By doing this, providers can avoid claim denials and help patients receive the care they need. Always remember these top 10 reasons and their corresponding preventive measures to avoid billing claims denials.

Medical Billing and Coding Services

Medical billing and coding are generally used in the same sentence synonymously. While they are the backbone and fundamental to healthcare revenue cycle management, they are quite different.

The purpose of medical billing and coding is to ensure that providers, doctors, and service providers are reimbursed for their services by medical insurers, payers, and patients.

Medical billing and coding are completely separate processes. They codify patient visits into terms that facilitate the submission of claims and subsequent reimbursement. Combined together, medical billing and coding are called Revenue Cycle Management. It starts when a patient registers with a medical practice and ends when the doctor or provider receives full payment for all the services rendered to the patient.

The full revenue cycle process may take anywhere from a few days to several months depending on the patient’s insurance, the complexity of the case and services rendered, how the process is handled to manage rejections and denials, and how the patient’s financial responsibility is managed by the practice.

Efficient revenue cycle management, medical billing, and coding will help providers and staff of medical practices work efficiently to be reimbursed for all the quality of care that they provide.

Let us try to understand the differences between medical coding and billing.

What is Medical Coding?

When a patient visits the medical office, or any other healthcare facility, a patient visit, otherwise known as an encounter is created and the provider documents the details of the visit as well as the services provided. The patient record explains the problem, diagnosis, service, and procedures.

The process of coding is in two parts. The first is Diagnosis coding.


Diagnosis codes are used to describe a patient’s condition. International Statistical Classification of Diseases and Related Health Problems, Tenth Revision (ICD-10) is used to capture diagnosis codes for billing purposes.

ICD-10-CM (clinical modification) codes are generally used to classify diagnoses in outpatient and private clinic settings, while ICD-10-PCS (procedure coding system) codes are for inpatient services at hospitals.

These ICD codes are used for identifying a patient’s condition, including the location and severity of an injury or symptom. It also indicates if the visit is related to an initial or follow-up encounter.

There are more than 70,000 unique identifiers in the ICD-10-CM code set. The World Health Organization (WHO) maintains the ICD coding system, which is used internationally in various modified formats.


The procedure coding system is called Current Procedural Terminology (CPT) codes and the Healthcare Common Procedure Coding System (HCPCS).

The American Medical Association (AMA) is responsible for the CPT coding system. These CPT codes describe the services given to a patient during an encounter with private payers. AMA publishes CPT coding guidelines and any modifications each year to support medical coders with coding-specific procedures and services.

CPT or procedure codes are used in conjunction with ICD diagnosis codes to show what the providers did during and during encounter visits. These CPT codes have what is known as, modifiers, which describe the services provider in greater detail. They also indicate if there were multiple procedures done, the reason for those services, and where on the patient these procedures were provided.

It is very important to use proper CPT modifiers to ensure accurate reimbursement for all the services provided.

What is Medical Billing?

As opposed to medical coding, medical billing is the process of submitting claims to insurance companies, payers as well and patients for appropriate reimbursement. Medical coders will enter the codes described above. After that is done, the medical billing team initiates the process of claim submission.

Medical billing usually starts at the front desk. When a patient is registered, medical office staff collects patient demographics data as well as the patient’s insurance information. Once that is collected, the staff is supposed to check the patient’s coverage to ensure that the insurance company will pay for the services. If the patient does not have full coverage or adequate coverage, the patient is supposed to sign documents accepting financial responsibilities.

The office staff is supposed to inform patients that they would be responsible for any costs that are not paid by the insurance company such as copay, co-insurance, and deductible.

After the patient has checked out, the billing staff starts the process of using the codes entered by providers as well as patient information into whatever system or software is being used by the practice for the purpose of medical billing.

Data that is necessary to create and submit claims include among other things, the following:

  • Provider information including provider name, location or place of service, NPI number of rendering as well as supervising provider if applicable.
  • Complete patient demographics and insurance details
  • Visit date and related information, ICD and CPT codes, etc.

In a general outpatient office setting, claims are submitted in a format called CMS-1500 form. Most software systems submit the claim electronically in a format that is compliant with CMS-1500. Billers have to be fully conversant with the form and all its fields.

Once the claim has been submitted to the payer (directly or via clearinghouse), adjudication starts. It will be determined if there is an error in entering the data or not. This process is called claim scrubbing. If an error is found, the claim will be rejected. This is called the claim rejection process. The billing person is supposed to fix the error and resubmit the claim. If everything goes through without any error, the payer will further adjudicate the claim and determine the amount of allowable payment to the provider. Based on that, an Explanation Of Benefits (EOB) is provided and sent to the provider along with payment, if any.

To keep it simple for this article, the billing person then enters payment details and reconciles them with the explanation of the benefits document. The electronic version of the explanation of benefits is also called electronic remittance advice or ERA.

The payer insurance company may also deny the claim for various reasons. In that case the medical biller’ll prepare a case to dispute the denial and further submit proper documentation for re-adjudication.

The medical billing process can be quite tedious and complicated particularly if insurance payers reject and or deny claims. This is where there is a need for medical billers that are fully conversant with insurance rules which keep on changing very frequently.

A/R Management
The process of following up on pending payments is called A/R – Accounts receivables management. Payments are tracked, posted and denials are fought and worked on constantly to make sure providers are compensated.

Finally, any balance that is owed directly by the patients must also be followed up on by the billing team.

Part 3 – Practice Key Performance Indicators – CLINICAL

By Chandresh J. Shah


Clinical Practice Key Performance Indicators –  Part-3

Growing a practice can take a lot of work and having goals can help. That is why it is important to have KPIs (Key Performance Indicators) that can be used to determine how well practice goals are being met.

Let me share to you KPIs that will help your practice on 4 main areas:

  1. Front Desk
  2. Clinical
  3. Billing and Revenue Cycle Management
  4. Reputation Management

This week – Clinical KPI’s. These KPIs are:

  1. Patient Care Hours
  2. Number of Patient Referrals
  3. Patient Transactions
  4. Patient Confidentiality
  5. Patient Follow-up
  6. Rate of Complications
  7. Patient Adherence to Treatment plans.
  8. Communication between primary care, specialists and patients.

In the video below, I went through and explained what each Clinical KPI You can also download the guide through this link (Click Here):

You can also watch the first two KPI Videos.

1. Front Desk KPIs.

2. Billing KPIs.

Part 2 – Practice Key Performance Indicators – BILLING AND RCM

By Chandresh J. Shah

Growing a practice can take a lot of work and having goals can help. That is why it is important to have KPIs(Key Performance Indicators) that can be used to determine how well practice goals are being met.

Let me share to you KPIs that will help your practice on 4 main areas:

  1. Front Desk 
  2. Clinical
  3. Billing and Revenue Cycle Management
  4. Reputation Management

Let me begin with KPI’s for Billing and Revenue Cycle Management as they are the first point of contact and impression your practice makes with existing and new patients. These KPIs are:

14. Net Collections Rate

15. Total Operating Margin

16. Average Insurance Claim Processing time & cost

17. Average cost per patient

18. Claims Rejection rate

19. Average insurance claim processing time and cost

20. Average Treatment Charge

21. Percentage of Patients without Medical Insurance

22. Time Gap between Date of Service and Date Billed

23. Percentage of Claims Denied overall, and by Payer

24. Percentage of Claims Denied due to Front-end errors vs Coding oversights

25. Percentage of Patients with Public vs Private Insurance

26. Percentage of No-Response claims overall, by Payer

In the video below, I went through and explained what each KPI meant for the Billing and RCM. You can also download the guide through this link (Click Here):

Practice Key Performance Indicators – Front Desk

By Chandresh J. Shah

Growing a practice can take a lot of work and having goals can help. That is why it is important to have KPIs (Key Performance Indicators) that can be used to determine how well practice goals are being met.

Let me share to you KPIs that will help your practice on 4 main areas:

  1. Front Desk 
  2. Clinical
  3. Billing and Revenue Cycle Management
  4. Reputation Management

Let me begin with KPI’s for Front Desk as they are the first point of contact and impression your practice makes with existing and new patients. These KPIs are:

  1. Patient In-Office Wait Time
  2. Schedule Density
  3. Percentage of Electronic Health Records
  4. Confirmation and No-Show Rates
  5. Patient Phone Wait Times
  6. Check-In Efficiency
  7. Number of Patients Served Per Month
  8. Number of New Patients Served Per Month
  9. Number of Patient Referrals
  10. Staff Time Spent Entering Data/Charting
  11. Doctor-Care-to-Paperwork Ratio
  12. Percentage of Patients Who Found Paperwork to be Clear and Easy to Understand
  13. Patient Care Automation (i.e. paper work required)

Watch this “Top 40 KPI” video as I went through and explained what each KPI meant for the front desk. You can also download the guide through this link (Click Here):

Your practice is not just a routine business – You need Entrepreneur Employees

By Chandresh J. Shah

A medical practice may seem like a ‘routine’ business. However how many times have you said – “My practice is different from others”’? It is because every business owner and founder has a vision that you believe should set apart your practice from others. There is a reason why you are independent and don’t join a large hospital. It is this vision that must be articulated and passed on.

In a practice, we encounter different kinds of employees. Of course, we would want to have employees worth keeping. What characteristics of employees should you look out for? If your practice has employees that have these characteristics, consider yourselves lucky:

(They) Hustle but they are able to estimate the right amount of push you and others need.

Why are these characteristics a winning combination for a practice? It is because employees with these characteristics are Entrepreneurs.

Good Employee vs. Entrepreneurial Employee

The Good Employee

Most employees qualify as ‘good’ because they do their tasks well; tasks that fit into the overall vision of the founder/provider/owner. They hone in well on their particular function. These people are essential to making a business work well.

But these are not the kind of people suited to take over the entire operation. Many employees have a title that suggest they are senior and therefore are leader. That is not necessarily true.

For Doctors and providers running and managing their own practice hiring an entrepreneurial employees can be risky. That is because employees with characteristics listed above can be unwieldy and intimidating. They can and will exert their dynamic pace of action and thought.

The Entrepreneurial Employee

How do you identify these entrepreneurial employees?

They have tremendous energy. Not just during the first few months of hiring, but always – like an energizer battery. They not only work hard, they hustle. They impress with intensity.

Commitment to personal improvement. You may find them reading self-improvement books, taking evening or online courses, subscribing to personal improvement blogs. It is ambition that drives them but not just for pure ambition of climbing ladders, but personal improvement. This can lead to benefits that the practice will gain from.

They don’t like being micromanaged. Entrepreneurial employees should be ‘handled with care’. You – the practice leader – can encourage or inhibit entrepreneurial behavior. If you manage employees too closely (micromanage), creativity and entrepreneurial behavior will be stifled. Conversely, they will flourish. Entrepreneurs need space to think and create. Remove boundaries and perceived limits.

They share their plans and ideas proactively. Don’t consider this as someone trying to get close to you and impress you. They may have ideas about growing the practice, increasing patient satisfaction, increasing online reviews, increasing patient collections, and overall practice efficiency.

They want to get things done – not just talk about it. Entrepreneurs are doers and thinkers. Their thinking is done not just when you ask them but it is done way in advance. They want to act on those ideas. Many entrepreneurial employees get fidgety in meetings, get impatient because they want action not just talk in meetings.

They may threaten to leave if they are not thriving. This is the downside of hiring entrepreneurial employees. They want to see growth and success and be instrumental in making it happen. It is up to you to create an environment where they thrive. Share your vision and work to have them make it their own. If there is a disconnect, this employee is perhaps not a good fit.

They may not be excellent team players. Sometimes, the most entrepreneurial employees don’t work well on teams. They don’t think like other people, and may have trouble understanding or empathizing with alternate points of view. These are not bad team members, their entrepreneurship needs to be harnessed.

Working with an entrepreneurial employee

I was helping a good friend and client several years ago. His practice was struggling to grow. He had just lost a provider/partner. One of his employees did not have the ‘office manager’ title, but she acted and behaved like one. She was a hard charger and driver. She intimidated everyone, but at the same time, other employees respected her for her knowledge and tenacity. They implemented a new EHR. She learnt and mastered it to the point where she became the internal ‘guru’. Even billing staff reached out to her.

The owner provider was concerned and scared. He was contemplating letting her go because even he felt intimidated. We talked it over and established a 6 month plan. We gave her a vision for personal and practice growth, and linked them together. We established boundary conditions and left her alone without micromanaging. We met with other staff members and sought out their feedback and articulated her role.

After 6 years, she is the office manager – she’s happy and the practice has grown tremendously.

Recognize and seek out entrepreneurial employees, you will not regret it.

Let me know if I can help. Pick a time on my calendar to discuss ideas. (Give it a few seconds for calendar to load after you click)

An Interesting Way to Avoid Medical Litigation

By Chandresh J. Shah

I’m sure you all have heard about the term word-of-mouth marketing.

Getting people to talk often, favorably, to the right people in the right way about you and your practice is far and away the most important thing you can do for your practice. This is the essence of word-of-mouth marketing.

As the topic interested me, I have been reading a book – Talk Triggers, by Jay Baer and Daniel Lemin.

There is a very interesting case study. He mentions Dr. Glenn Gorab, an oral surgeon in Clifton New Jersey. Dr. Gorab started doing something more than 15 years ago. He created a differentiator that other providers don’t seem to copy or follow despite its success as a word-of-mouth generator.

In the book, Dr. Gorab says, ‘I’ve actually mentioned this approach to several of my referring dentists, and none of them implemented it,”.

Dr. Gorab’s approach

Every weekend Dr. Gorab calls each patient that is coming to the office for the 1st time the following week. His typical greeting is as follows: “Hi, this is Dr. Gorab, I know we have an upcoming appointment for you next week, I just wanted to call to introduce myself and ask if you have any questions prior to your appointment.”

Dr. Gorab says patients aren’t really sure what to make of the calls because they are so unexpected. “Most people are shocked that a doctor would call them prior to their appointment; they are almost dumbfounded. It’s so out of the ordinary. They say: no one has ever done this to me before.”

These patients tell their friends about Dr. Gorab’s calls, and they deliver new patients through his front door on a consistent basis.

He says 80% of patients mentioned the calls once in the office for their appointments.

Quite literally, every physician-every professional service provider, could mimic it, yet they do not. Why?

An interesting side benefit. Medicine is incredibly litigious in the United States and has been for decades. 99% of high risk surgical specialists will face a patient lawsuit during their career. Oral surgeons are similarly at risk for legal proceedings, but Dr. Gorab has avoided them entirely across his 32 year career.

“I have never been sued for anything,” he says.” And I do surgeries; I do surgery every day. I have complications. Some of them have been at complications. But probably the reason why I haven’t been sued is because people understand that I care about them, and people don’t sue people they like. The fact that I care about people is the biggest determinant of that, and the fact that I call them ahead of time means that I’m taking an interest in them and I care about them. So right from the start, they see that I care about them.”

Are you ready to try this approach?

How to Avoid and Manage No-shows

By Chandresh Shah

Everyone talks about patient no-shows. Some practices take charge and control, and some, do not so much. I’m dividing the nemesis of no-shows into parts. One, how to avoid them in the first place and also, how to manage them because inevitably you cannot ever eliminate them.

Good scheduling practices are financially more rewarding.

We have to start by analyzing, understanding, and empathizing with the reasons why there are no-shows to begin with. They can range from forgetfulness, and financial issues, to a lack of transportation.

Avoiding No-Shows

  1. Chronic Culprits: Patients miss appointments from time to time which is understandable but you need to identify chronic appointment ‘Missers’. Restrict them to the same day or one day in advance.
  2. Same-day openings: Try to keep a few appointments for the same day if your patient backlog permits.
  3. Double book: Double book chronic culprits so that you don’t end up with empty slots.
  4. Appointment reminders: Phone reminders and SMS are good but manual reminders for some patients – chronic, high value, etc. One size does not fit all.
  5. Keep waiting time to a minimum.
  6. Thank patients who keep appointments and arrive on time.
  7. Provide printed copies for the next appointments – even if you send emails and automated messages.
  8. Ask about transportation if you know some patients have issues.
  9. Staff education and prioritization. Create a policy to address scheduling needs and all staff must be on the same page.


  1. Keep wait list
  2. Follow-up no-show immediately – don’t wait.
  3. Manage ‘latecomers’. Counsel, and warn them as necessary. Enforce a small penalty after repeated warnings.
  4. Have a written policy that is clear, and implementable.
  5. Have a clear no-show fee. You can try the approach of taking it off on the next on-time appointment.

Let me know your thoughts and if you have something to share.

Modify the EHR to Fit Your Current Workflow or Adjust Workflow According to the EHR System

By Chandresh Shah

Wrong question. It is like putting a cart before the horse.

In the past few weeks, I have talked a lot about practice revenue and revenue cycle management. Let me focus on that as I try to explain what I mean.

Examine some possible problems or ‘current state of affairs’.

Example 1

Overall collections are not bad, but there are two issues that can be improved:

o Patient collections down

A few Denials are too many!

The billing department (in-house or outsourced) is doing a good job. The over-90-day accounts receivables are within industry norms, they work very diligently to pursue all claims and every last dollar. They are doing everything they can, within their power.

The problem is, that there are things that can be done better upfront – before the patient comes in before the claims go through. How?

  • Getting pre-cert done for procedures beforehand.
  • Getting eligibility for special types of visits before patients walk in so that you are not caught with pants down.
  • Full knowledge of Patient co-pays, out-of-pockets and balance remaining on deductibles, before the patient comes in for a visit.


Examine your practice workflow with respect to these specific problems.

  • How/Who can check eligibility and other insurance details before patient visits?
  • How/Who can check insurance details, outstanding patient balances, pre-certs, and authorizations?
  • Once checked, what should be done to take care of and/or avoid downstream problems?

Example 2

Your practice receives a paper EOB and checks for 10 claims. You receive this check on the 1st of the month. Someone enters payment into your billing software and deposits the check into the bank. The person in charge of payment posting is not able to post the payment until after 2 weeks, say the 15th of the month, for whatever reason.


The Billing Manager runs the ‘payment’ report where there is a discrepancy.

She wants the report to reflect the Payment Posted date to match the date when the check was received.

Read the above sentence again. Do you see anything wrong with this?

First of all, every activity in any system should reflect the date when that activity is performed. If the software reflects the date of payment posting on a claim as May 1 instead of May 15, that is exactly what it is.

So, why does the billing manager want the payment posted date as the date on the check? If the reason is to be able to accurately reconcile the claims payment date, then the payment posting process needs re-examination, not the technology or software!

Therefore, the answer is to link workflow and processes to Problems and Solutions rather than technology.


Practices are too close to the problem to realize that the process is broken, or can be improved because it is based on assumptions and conditions that were established a while ago. Environments – business, and technology – change, which requires adaptability to change processes.

Successfully solving problems requires partnership and information sharing. It is a result of two or more people sharing the workload and committing to the same outcome.

If you see your vendor as a vendor that is simply making and peddling software, you’re on your own. If you see your vendor as a partner allow them to help you, they have a lot of experience and you don’t have to pay ‘consulting’ fees to more expensive health IT consultants.

A vendor that says yes to everything you want should be approached with caution. Is the vendor challenging you to think of your current state and encouraging you to visualize a better future state? If yes, proceed.

Dr. Google – Converting a Threat to Opportunity

By Chandresh Shah

We have heard stories or have firsthand knowledge of how patients come to see physicians armed with printouts and information gleaned from the Internet about conditions that they are experiencing.

It almost seems like patients visit Dr. Google first before they come to see their physician. You probably have experienced times that when they come to your office, some already have a diagnosis in mind.

According to a study in 1999, it was found that health-related concerns dominated much of what people were looking for on the Internet. People are finding it easier to search online for answers to their health-related questions. They seem to be bypassing traditional medical sources.

This creates a dilemma when patients walk in armed with information from “Google”. People fail to understand that Google is just a search engine and not a database of health-related information. There are instances where even if these patients are unable to determine the trustworthiness of the sources of information, they would still take the information hook, line, and “clicker”

Dealing with Dr. Google

When dealing with a patient equipped with a “diagnosis” from Google, the obvious question is, how do you win a patient’s trust and resolve conflicts if a patient wants tests and treatments that you believe are unnecessary?

There can be many creative ways in which physicians can tackle this issue [I’m not calling it a problem].

The 1st goal is to Acknowledge that people go to the Internet because they have a problem, and the Internet is available and accessible easily.

2nd is to Understand and Acknowledge that patients are sometimes confused by the abundance of medical information available online.

You know very well and believe that the Internet can never come close to the physician. It is not about competing with the Internet. We must accept the Internet as a tool, not as a replacement.

Acknowledging can go a long way as it can help promote more open communication. As with any patient exam, you must always start by acknowledging the patient’s concerns. This is what we call as active listening even when you think you know exactly what the patient is going to say.

A large percentage of patients see their physicians with ideas they may have acquired from the Internet, which may or may not prove valid. However such research can bring out emotions and concerns related to their health symptoms, such as fear, uncertainty, sadness, and worry. Being attentive to these underlying emotions, recognizing the patient’s perspective, and allowing the patient to feel respected and heard go a long way in developing mutual trust.

It is this trust that has the best chance of converting the challenges presented by Dr. Google into opportunities. This is the new evolution of physician-patient partnership that overcomes the threat posed by patients conducting their own research online. Instead of resisting and resenting the fact that patients conduct their own research online, it is better for physicians to be patient and understand the reasons why patients do this.

Dr. Google-From Threat to Opportunity

Knowledge empowers patients in shared decision-making. When providers realize that patients have received misinformation, or biased medical suggestions and come into the office with preconceived ideas about their diagnosis or treatment, it is precisely the trust that allows providers to overcome those fears.

It must also be realized that many patients come to see the doctor based on their online research which convinces them that they need medical attention and need to see a medical professional. It should be seen as a positive patient engagement rather than a negative one. Patients who have done online research seem to be more attuned to his or her symptoms and they can articulate them more easily.

In summary, changing the mindset of the Internet being a threat to an opportunity not only develops trust but can also lead to better patient outcomes as it can encourage better patient compliance with treatment plans because patients are now part of the solution.