Most Common Billing Errors in Behavioral Health and How to Avoid Them

Billing in the behavioral health field is uniquely complex. Unlike traditional medical specialties, mental health services involve varied session types, evolving treatment plans, and payers with strict documentation rules. Even experienced practices often struggle to navigate these billing requirements smoothly. As a result, behavioral health billing errors are surprisingly common—and costly.

From coding mistakes to incomplete documentation, these issues can lead to claim denials, delayed payments, and unnecessary financial stress on providers. The good news is that most errors are completely preventable with the right systems and support. Below, we explore the most frequent billing mistakes in behavioral health and the practical steps your practice can take to avoid them.

1. Incorrect or Incomplete Documentation

Accurate documentation is the backbone of clean claims. Yet, incomplete or inconsistent notes remain one of the biggest problems in behavioral health billing. Missing details about session length, treatment purpose, or diagnosis can instantly trigger a denial.

How to Avoid It

• Document every session fully, including duration, modality, and progress toward treatment goals.
• Ensure documentation supports the diagnosis and billed CPT code.
• Use structured templates to maintain consistency among all providers.
• Consider periodic internal audits to catch errors early.

Clear, detailed documentation not only prevents denials but also protects providers during audits and improves continuity of care.

2. Using Incorrect CPT or ICD-10 Codes

Behavioral health coding can be tricky because many services appear similar but vary in time, structure, or provider type. Selecting the wrong CPT code—or pairing it with an incompatible ICD-10 code—is one of the leading causes of denied claims.

How to Avoid It

• Stay updated with the latest coding guidelines for therapy, psychiatry, and telehealth.
• Verify time-based codes carefully, especially for sessions that go beyond standard durations.
• Ensure the diagnosis code supports the medical necessity of the service.
• Train staff regularly or rely on billing specialists experienced in mental health.

Accuracy in coding directly impacts reimbursement rates and ensures compliance with payer policies.

3. Missing Prior Authorizations

Many behavioral health services require pre-authorization, especially when sessions exceed a payer’s visit limit or involve specialized treatment. Practices often face denials simply because authorization codes were not obtained or renewed on time.

How to Avoid It

• Check the patient’s benefits before the first appointment.
• Track authorization expiration dates and visit limits.
• Maintain a dedicated workflow for renewals.
• Use automated reminders or an RCM tool to avoid lapses.

A reliable eligibility and benefits verification process can eliminate most authorization-related issues.

4. Billing for Non-Covered Services

Insurance coverage for behavioral health varies widely by payer and plan. Some services—such as couples therapy, educational sessions, or certain telehealth modalities—may not be covered. Billing for these can result in repeated denials or uncollectible balances.

How to Avoid It

• Verify coverage details for each patient—not just general benefits.
• Inform patients upfront about out-of-pocket costs.
• Maintain a list of frequently non-covered services for each insurance company.
• Update billing policies as payer rules change.

Clear communication helps prevent misunderstandings and reduces claim rejections.

5. Incorrect Use of Modifiers

Modifiers are essential in behavioral health billing, especially for telehealth services, extended sessions, and complex evaluations. Missing or incorrect modifiers can instantly convert a valid claim into a denial.

How to Avoid It

• Use the correct telehealth modifiers (e.g., 95, GT) when required.
• Apply time-based or complexity modifiers accurately.
• Review payer-specific modifier rules, as they vary widely.

Modifiers ensure that claims reflect the exact nature of the service delivered—reducing disputes and delays.

6. Not Staying Updated With Payer Policies

Behavioral health billing rules change frequently. Payers update allowed CPT codes, adjust telehealth rules, and modify documentation expectations throughout the year. Many practices continue to submit claims using outdated guidelines.

How to Avoid It

• Subscribe to payer updates and newsletters.
• Review annual changes to CPT and ICD-10 codes.
• Conduct routine staff training on new requirements.
• Partner with experts who monitor industry updates.

Following the latest guidelines helps practices stay compliant and maintain steady reimbursement.

7. Delayed Claim Submission

Submitting claims late is more harmful than many practices realize. Payers have strict deadlines, and even a small delay can result in a denied claim that cannot be appealed.

How to Avoid It

• Submit claims daily or within 24–48 hours of service.
• Automate your claim submission workflow.
• Track submission deadlines for each insurance provider.

Timely billing ensures consistent cash flow and reduces the risk of missing filing windows.

8. Not Following Up on Denials

Many behavioral health practices lose revenue simply because they fail to follow up on denied or rejected claims. Without proper denial management, thousands of dollars can remain uncollected.

How to Avoid It

• • Track every denial with reason codes.
  • Correct and resubmit claims quickly.
  • Identify recurring issues and fix them at the source.
  • Use dedicated denial management workflows or outsource to specialists.

Proactive follow-up can recover revenue that would otherwise be lost.

Conclusion

Billing in behavioral health is complex, but most errors are avoidable with the right systems, training, and support. By improving documentation, staying current with codes, verifying benefits, and managing denials effectively, practices can significantly reduce claim issues and improve reimbursement rates.

For clinics that want more accuracy and less administrative stress, partnering with experienced behavioral health billing professionals can transform financial stability and allow providers to focus on delivering quality care.

Looking for a Reliable Medical Billing Partner?

eClaim Solution — You Focus on Care. We Handle the Billing.

👉 Book a FREE Consultation Today
Start increasing your revenue with eClaim Solution proven RCM expertise.