Medical Billing Terms B: Balance Billing, Behavioral Health Carve-Outs and Blue Plans

This page defines medical billing terms B, from balance billing and behavioral health carve-outs to Blue Cross licensees and the first CMS-1500 boxes. Each entry gives a plain definition, why it matters, an example, and an official source. MCM South Medical Billing Service, LLC works only in mental and behavioral health billing.

Last reviewed: October 10, 2026Sources linked at each term

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Billing Terms Glossary slide, Terms B: Balance Billing - MCM South Medical Billing Service, LLC

Glossary pages

0-9 ABC D E F G H I J K-L M N-O P Q-R S T U-V W-Z

Pages in B

B-1B-2 B-3

On this page (20 terms)

Bad Debt
Balance Billing
Batch Transaction
Behavioral Health Billing
Behavioral Health Care and Human Services Accreditation
Behavioral Health Carve-In
Behavioral Health Carve-Out
Behavioral Health Integration (BHI)
Behavioral Health Parity Complaint
Benefit Exhaustion
Benefit Verification
Billed Charge
Billing Provider
Birthday Rule
Blue Cross Blue Shield Association (BCBSA)
Blue Cross Blue Shield Licensee
Blue Shield of California
BlueCard Program
Box 1 (Type of Coverage)
Box 10 (Condition Related To)

How to use these Balance Billing definitions

Use this page as a quick reference for Balance Billing, from Bad Debt to Box 10. Each entry gives a plain definition, why it matters to a mental health practice, and an official source. When a rule changes by payer or state, the entry says so, so confirm Balance Billing details with the payer before you bill.

Checklist: put the balance billing definitions to work

Check the balance billing entries above before you send a claim that depends on them.
Share this balance billing page with front-desk and billing staff so everyone works from the same definitions.
When a payer letter mentions balance billing, find the matching entry and note the date you checked it.
Keep your balance billing notes next to your payer contracts, because a contract can define a term differently.

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Bad Debt

General (all payers)

Also called uncollectible balance; bad debt write-off

Definition: Balances a practice determines are uncollectible after reasonable collection efforts.
Why it matters: Tracking it shows the cost of nonpayment and informs policy.
Illustrative example: A balance goes to collections after statements and calls.

Related termsWrite-Off Collections Self-Pay

Reference sourceHFMAchecked 10/9/26

CategoriesPayment & Reimbursement Revenue Cycle Metrics

Balance Billing

General (all payers)

Also called surprise balance bill; billing the difference

Definition: Billing a patient for the difference between the provider's charge and what the payer allowed, which is generally prohibited for participating providers and restricted by law in some other situations.
Why it matters: Improper balance billing can breach contracts and laws.
Illustrative example: An in-network provider cannot bill the patient for the contractual write-off.

Reference sourceCMS (Centers for Medicare & Medicaid Services)checked 10/9/26

CategoriesPatient Financial Responsibility Terms Audits & Compliance

Batch Transaction

General (all payers)

Also called batch file; batch submission

Definition: A group of transactions sent together and processed on a schedule.
Why it matters: Common for claims; results return later.
Illustrative example: A clearinghouse sends a nightly batch.

Reference sourceX12checked 10/9/26

CategoriesEDI & Clearinghouse Terms

Behavioral Health Billing

General (all payers)

Also called mental health billing; psychotherapy billing; behavioral health revenue cycle

Definition: The specialized process of coding, submitting, and collecting claims for mental health and substance use disorder services, with time-based codes, authorization rules, and carve-out networks.
Why it matters: Differs from general medical billing because of session-time codes, carve-outs, and documentation standards.
Illustrative example: A billing team confirms session times, diagnosis, and carve-out payer before submitting a therapy claim.

Reference sourceAmerican Psychiatric Associationchecked 10/9/26

CategoriesBehavioral Health Specific Terms

Behavioral Health Care and Human Services Accreditation

General (all payers)

Also called Joint Commission behavioral health accreditation; BHC accreditation; BHCHS

Definition: Behavioral Health Care and Human Services accreditation is a Joint Commission accreditation program for organizations that provide behavioral health and human services. Its standards apply to those settings.
Why it matters: Some payers, state programs, and grants prefer or require accreditation. Confirm what your payer or funder accepts.
Illustrative example: A community mental health provider seeks Joint Commission accreditation to meet a state contract requirement.

Reference sourceThe Joint Commissionchecked 10/9/26

CategoriesQuality & Risk Adjustment Terms Audits & Compliance

Behavioral Health Carve-In

General (all payers)

Also called carve-in; integrated behavioral health benefits

Definition: An arrangement in which the health plan manages behavioral health benefits itself instead of delegating them.
Why it matters: Simplifies claims routing but changes how authorizations and networks work.
Illustrative example: A payer moves behavioral health in-house and updates payer IDs.

Reference sourceCMS (Centers for Medicare & Medicaid Services)checked 10/9/26

CategoriesBCBS, UHC & Commercial Payer Terms Behavioral Health Specific Terms

Behavioral Health Carve-Out

General (all payers)

Also called BH carve-out; carved-out behavioral health; managed behavioral health organization; MBHO

Definition: An arrangement in which a plan delegates behavioral health benefits to a separate company, which handles authorizations, network, and claims.
Why it matters: The claim may go to a different payer or ID than the medical plan.
Illustrative example: A health plan card lists a separate behavioral health phone number and payer ID.

Reference sourceCMS (Centers for Medicare & Medicaid Services)checked 10/9/26

CategoriesBCBS, UHC & Commercial Payer Terms Behavioral Health Specific Terms

Behavioral Health Integration (BHI)

General (all payers)

Also called BHI; general BHI; 99484

Definition: Services that integrate behavioral health care with primary care, including general BHI care management and the collaborative care model.
Why it matters: Growth area with specific codes and consent requirements.
Illustrative example: A practice bills general BHI for a monthly care management service.

Reference sourceCMS (Centers for Medicare & Medicaid Services)CMS Medicare Learning Network (MLN)checked 10/9/26

CategoriesBehavioral Health Specific Terms Value-Based Care Terminology

Behavioral Health Parity Complaint

General (all payers)

Also called parity complaint; parity appeal

Definition: A complaint or appeal claiming a plan's mental health benefit limits are stricter than comparable medical benefits.
Why it matters: A route for challenging restrictive limits, with regulators and external review options.
Illustrative example: A patient files a parity complaint after repeated therapy authorization denials.

Reference sourceU.S. Department of Labor, EBSAchecked 10/9/26

CategoriesAudits & Compliance Behavioral Health Specific Terms

Benefit Exhaustion

General (all payers)

Also called benefits exhausted; maximum reached

Definition: The point where a member has used up a covered benefit, such as visits or a dollar maximum.
Why it matters: Claims deny after exhaustion, and the practice must decide how to handle the patient's balance.
Illustrative example: A denial reads 'benefit maximum reached'.

Reference sourceCMS (Centers for Medicare & Medicaid Services)checked 10/9/26

CategoriesEligibility & Benefits Denials & Appeals

Benefit Verification

General (all payers)

Also called verification of benefits; VOB

Definition: A deeper check than eligibility that documents the plan's specific behavioral health benefits, such as copay, coinsurance, deductible, visit limits, and authorization rules.
Why it matters: Prevents billing errors and helps set patient expectations.
Illustrative example: A VOB shows a $30 copay, 20 visits per year, and no authorization requirement.

Reference sourceCMS (Centers for Medicare & Medicaid Services)checked 10/9/26

CategoriesEligibility & Benefits

Billed Charge

General (all payers)

Also called charge; submitted charge; gross charge; billed rate

Definition: The amount a provider lists for a service on the claim before contractual adjustments.
Why it matters: Charges should be consistent across payers and reasonable relative to the fee schedule.
Illustrative example: A practice bills $200 for a session and is paid the allowed amount.

Reference sourceCMS (Centers for Medicare & Medicaid Services)checked 10/9/26

CategoriesClaims Processing Payment & Reimbursement

Billing Provider

General (all payers)

Also called billing entity; pay-to provider

Definition: The provider or organization that submits the claim and is paid. It can differ from the rendering provider who delivered the service.
Why it matters: Errors here send payments to the wrong entity or trigger rejections.
Illustrative example: A group is the billing provider; a therapist in the group is the rendering provider.

Reference sourceCMS (Centers for Medicare & Medicaid Services)checked 10/9/26

CategoriesProvider Data Management Terms Claims Processing

Birthday Rule

General (all payers)

Also called birthday rule for dependents

Definition: A common rule for children covered by both parents' plans: the parent whose birthday falls earlier in the calendar year has the primary plan.
Why it matters: Decides primary versus secondary for many dependent children, unless a court order differs.
Illustrative example: Parent A's birthday is in March, Parent B's in August; Parent A's plan is primary.

Reference sourceCMS (Centers for Medicare & Medicaid Services)checked 10/9/26

CategoriesEligibility & Benefits

Blue Cross Blue Shield Association (BCBSA)

Private payer

Also called BCBSA; Blue Cross Blue Shield federation

Definition: The national association of independent, locally operated Blue Cross and Blue Shield companies. BCBS is a federation of independent plans, not one company.
Why it matters: Rules, portals, and policies differ by licensee, so one plan's rules must never be generalized to another.
Illustrative example: A practice reads each state's Blue plan policy separately.

Reference sourceBlue Cross Blue Shield Associationchecked 10/9/26

CategoriesBCBS, UHC & Commercial Payer Terms

Blue Cross Blue Shield Licensee

Private payer

Also called BCBS plan; Blue plan; regional BCBS licensee

Definition: An independent company licensed by the BCBSA to use the Blue names and marks in a defined service area.
Why it matters: Each licensee sets its own credentialing, fee schedules, authorization, and appeals.
Illustrative example: A therapist credentials with a state's Blue plan separately from a neighboring state's.

Reference sourceBlue Cross Blue Shield Associationchecked 10/9/26

CategoriesBCBS, UHC & Commercial Payer Terms

Blue Shield of California

Private payer

Also called BSC

Definition: An independent nonprofit Blue Shield plan serving California.
Why it matters: A separate plan with its own rules.
Illustrative example: A California provider uses Blue Shield's provider portal.

Reference sourceBlue Shield of Californiachecked 10/9/26

CategoriesBCBS, UHC & Commercial Payer Terms

BlueCard Program

Private payer

Also called BlueCard; out-of-area Blue claims

Definition: A BCBSA program that lets members of one Blue plan use providers of another Blue plan while claims are processed through the local plan.
Why it matters: Claims are filed with the local Blue plan, which forwards them to the member's home plan.
Illustrative example: A visiting member's claim is filed to the provider's local Blue plan.

Reference sourceBlue Cross Blue Shield Associationchecked 10/9/26

CategoriesBCBS, UHC & Commercial Payer Terms

Box 1 (Type of Coverage)

General (all payers)

Also called CMS-1500 box 1; item 1; type of health insurance coverage; claim filing indicator on paper claim

Definition: Box 1 on the 1500 claim form shows the type of health insurance coverage that applies to the claim. The choices are Medicare, Medicaid, TRICARE, CHAMPVA, Group Health Plan, FECA Black Lung, and Other.
Why it matters: A wrong choice can send the claim to the wrong payer or cause a rejection. Match the box to the primary payer's program, and note the payer's own rules for commercial plans.
Illustrative example: A biller marks Group Health Plan for a patient with employer coverage and Medicare as secondary.

Reference sourceNUCC, 1500 Claim Form Reference Instruction Manual, Version 13.0 (7/25)checked 10/9/26

CategoriesClaims Processing Eligibility & Benefits

Quick answer: Balance Billing

What is the difference between a carve-in and a carve-out?

In a carve-in, the health plan manages behavioral health benefits itself. In a carve-out, the plan delegates them to a separate company, which can change the payer ID, authorization process, and network.

Frequently asked questions: Balance Billing

What is balance billing?

It is billing a patient for the difference between your charge and what the payer allowed. It is generally prohibited for participating providers.

What is a behavioral health carve-out?

A plan delegates behavioral health benefits to a separate company that handles authorizations, network, and claims. The claim may go to a different payer or ID than the medical plan.

What is the birthday rule?

For a child covered by both parents' plans, the plan of the parent whose birthday falls earlier in the calendar year is primary, unless a court order says otherwise.

Related resources

Where MCM South works

MCM South serves psychotherapists and psychiatrists in ten states: Georgia, Massachusetts, Connecticut, Texas, Florida, New York, Colorado, Tennessee, North Carolina and Illinois.

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