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.

Author: Chandresh Shah

Chandresh Shah specializes in Healthcare IT and Medical Billing. He knows the market inside out; what works, what doesn’t. He advises and works with small business owners.