Private Practice Mental Health Billing: 6 Easy Steps
Private practice mental health billing is the work of turning a therapy or psychiatry visit into a paid claim from a commercial insurer. It runs from checking benefits before the first session to appealing a denial. Every step depends on the payer’s contract and plan, so there is no single public fee schedule to follow.
The six steps of private practice mental health billing
Private practice mental health billing follows the same order for every claim. Each step has an owner and a record.
| Step | What happens | What to record |
|---|---|---|
| 1. Verify benefits | Confirm coverage, the behavioral health administrator and cost share | Date, source, reference number |
| 2. Confirm network status | In or out of network for the treating clinician | Status and effective date |
| 3. Choose the code | Match the service you delivered to the right code | Time and note |
| 4. Submit the claim | Send a clean claim to the right payer | Submission date |
| 5. Post the payment | Match the remittance to the claim | Paid, adjusted, denied |
| 6. Work the denial | Correct, resubmit or appeal | Reason code and deadline |
Step 1: verify benefits and find the behavioral health administrator
Private practice mental health billing starts before the first session. Check the specific member’s plan before the first appointment. The name on the card may not be the company that handles mental health claims, because some plans carve behavioral health out to a separate vendor.
Confirm that coverage is active on the service date, which company administers behavioral health benefits and where claims go, the copay, deductible and visit limits, and whether the plan needs prior authorization, which is a sign-off the insurer may require before care.
Our insurance verification routine gives the full list. Verification records what the plan says today and does not guarantee payment.
Step 2: network status and credentialing
HealthCare.gov defines a network as the group of providers a plan has agreed to work with. In-network providers have a contract with the payer. Out-of-network providers do not, which changes the patient’s cost and your reimbursement.
Do not bill as in network until the payer confirms your effective date and terms.
Credentialing is specific to each provider and each payer, and many payers draw on your CAQH profile, so keep it current through CAQH’s provider data tools. See in-network vs out-of-network credentialing and our guide to out-of-network billing for therapists.
Step 3: the codes commercial payers pay most
Most claims in private practice mental health billing use a handful of psychotherapy codes. CPT is owned by the AMA, so descriptions here are paraphrased. Payers decide what they cover and at what rate.
| Code | Service (paraphrased) | Note |
|---|---|---|
| 90791 | Psychiatric diagnostic evaluation | No medical services |
| 90834 | Individual psychotherapy | Medicare contractor range: 38 to 52 minutes |
| 90837 | Individual psychotherapy, longer session | Medicare contractor range: 53 or more minutes |
| 90847 | Family psychotherapy with the patient present | Stand-alone code |
| +90833, +90836, +90838 | Psychotherapy add-ons with an E/M visit | Never billed alone |
The time ranges come from a Medicare contractor article, A57520 from First Coast Service Options, and they apply to Medicare in that contractor’s area. Check each commercial payer’s policy.
For psychiatrists, the add-on codes are reported with an evaluation and management (E/M) visit by the same clinician, and that article says the documentation must show psychotherapy start and stop times or total time and that both services are separately identifiable.
How the rules differ by payer type
Private payers
Rates, authorization rules, appeal deadlines and network terms vary by payer, plan and contract. Parity law helps at the plan level. The Mental Health Parity and Addiction Equity Act bars plans from putting less favorable limits on mental health benefits than on medical and surgical benefits. It does not require every service to be covered, every clinician to be in network, or rates to match.
Medicare and Medicaid
This post covers commercial billing. Medicare and Medicaid have their own rules, rates and enrollment, and the CMS Medicare Mental Health booklet is the place to start for Medicare.
State rules
State insurance laws and Medicaid programs differ. Ask whether a rule applies to your state before you rely on it, and never carry one state’s rule to another.
Steps 4 to 6 of private practice mental health billing: submit, post, appeal
A rejection happens at initial processing, before the payer accepts the claim. A denial happens after processing, when the payer does not approve payment as billed. Common causes are inactive coverage, wrong patient details, a missing authorization, a code or modifier mismatch and late filing.
Match each remittance to its claim, find the stated reason and deadline, compare it with your eligibility and contract records, then correct and resubmit or appeal. The CARC and RARC code guide explains reason codes, and the underpayments guide covers short pays.
If a patient has a second plan, send the secondary claim after the primary payer processes the claim, with the primary payer’s explanation of benefits when required. An employee assistance program is not automatically secondary coverage.
What should a private practice therapist look for in a billing partner?
Look for a partner that works only in behavioral health, understands both psychotherapy and psychiatry billing, tracks payer deadlines, reports clearly and puts its scope and fees in writing. Ask how it handles verification, carve-outs, corrections, denials, appeals and secondary claims. Our related post on mental health billing services for therapists has seven checks to compare companies.
What to do Monday morning
- Audit your private practice mental health billing: list your five most-used commercial plans and who administers behavioral health for each.
- Verify benefits and authorizations for next week’s first sessions and record the source.
- Pull last month’s denials and match each to a reason code and a deadline.
- Check your clean claim rate so you know where you start.
- Review any unfamiliar term in the billing terms glossary.
The short version: private practice mental health billing
Private practice mental health billing is payer-specific from the benefits check to the appeal. Verify benefits and the behavioral health administrator, confirm network status, code from the note, and work every denial against its deadline.
How MCM South helps
MCM South Medical Billing Service, LLC bills exclusively for mental and behavioral health, for psychotherapists and psychiatrists in solo and medium-size practices. We bill out-of-network claims for clients. We do not work with hospital systems.
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Related reading
Want help with commercial billing? We can talk through your practice.
FAQ
What does a billing service do for a therapist?
It takes over the claim cycle: submitting claims, posting payments and following up on denials. You keep documentation and clinical decisions.
Why do therapy claims get denied?
Common causes are inactive coverage, wrong patient details, a missing authorization, a code or modifier mismatch and late filing. The reason code on the remittance tells you which one.
How do I verify mental health benefits before the first session?
Check eligibility, then confirm the behavioral health administrator, network status, cost share, visit limits and authorization rules by portal or phone. Record the date and reference number.
How long does credentialing take?
It varies by payer, so confirm with each one. Credentialing is specific to each provider and each payer.
Where MCM South 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. We serve solo and medium-size practices that bill mental and behavioral health. Founder Michael Williams has worked with insurance payers in all 50 states. Browse the state and regional billing guides for rules that vary by state, or see our billing services.
This post is operational guidance for billing, not legal advice. Rules change, so confirm with the payer or your counsel.
