Private Practice Revenue Cycle Explained: From Intake to Payment

The behavioral health revenue cycle is every step between a client calling your office and your practice receiving payment. A break at any step of the behavioral health revenue cycle can stall income. This guide walks through the cycle in order so you can see where claims get stuck.

What is the behavioral health revenue cycle?

The revenue cycle covers scheduling, insurance checks, documentation, coding, claims, payment posting and follow-up. Our glossary entry on the revenue cycle defines the terms. The goal is to be paid correctly for each session, with as little rework as possible.

The 8 steps from intake to payment

1. Intake and insurance details

Collect the client’s name, date of birth, insurance ID and the card’s front and back. Record who is the policyholder.

2. Eligibility and benefits

Confirm that coverage is active and what the plan pays for behavioral health. See insurance verification and eligibility checks.

3. Documentation and coding

The note must support the CPT code and diagnosis. Our documentation requirements guide covers what the note must show.

4. Claim creation and submission

The billing system builds the claim and sends it to the payer through a clearinghouse. The standard electronic format is the 837P (see the CMS billing form and 837P booklet). Read about electronic claims submission.

5. Payer review

The payer accepts, rejects, pays or denies the claim. A rejected claim never entered processing, so fix it and resend it. Claim formats follow standards from X12.

6. Payment posting

Match each payment to its claim and record adjustments and balances. See payment posting.

7. Denials, appeals and secondary claims

Work denials and unpaid claims, and bill any second insurance. See denied claim follow-up and appeals and secondary claims billing.

8. Reporting

Review what was billed, paid and outstanding. Look at claims by age so none passes its filing deadline.

Where does the behavioral health revenue cycle break most often?

Many problems start early: a wrong ID, a lapsed policy or a note that does not match the code. Fixing the front end is cheaper than appealing later. Our private practice management guides cover billing metrics and cash flow, and how medical billing services get paid explains how outside services fit in.

What should you review each month?

• Claims by age, so you can act before a deadline.
• The most common denial reasons, so you can fix them at the source.
• Payments posted compared with claims billed.
• Claims waiting on a second insurance.

Small fixes at intake and in documentation usually do more for your behavioral health revenue cycle than chasing claims later.

Who should run each step?

Your practice owns scheduling, intake and documentation. A billing service can own eligibility, claims, posting and follow-up. See what billing services for therapists do each month, how electronic claims for therapists travel to payers, and whether to outsource therapy billing. Compare options on our who we serve page, and see our credentialing service for the step before the cycle begins: getting in-network.

Frequently asked questions

What is the first step of the revenue cycle?

Collecting accurate insurance details at intake. Mistakes here carry through every later step.

What is the difference between a rejected claim and a denied claim?

A rejected claim was not accepted for processing, usually because of a data error. A denied claim was processed and refused.

Why track claims by age?

Payers set their own timely filing limits, so aging reports show which claims need action before they expire.

Can a billing service run the whole cycle?

It can run the billing parts. Your practice still owns scheduling, documentation and clinical care.

Where MCM South Medical Billing Service Works

MCM South Medical Billing Service, LLC works with psychotherapists and psychiatrists in our ten currently served states: Georgia, Massachusetts, Connecticut, Texas, Florida, New York, Colorado, Tennessee, North Carolina and Illinois.

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