The Common Behavioral Health Claim Denials You Need to Know

The medical billing process is often filled with many challenges, especially for behavioral health practice. Most of the clinicians and healthcare facilities have struggled to navigate the insurance claim denials. 

These denials ultimately impact the financial stability of behavioral health practice and affect patient care access.

This blog post shares the common reasons for behavioral health claim denials and steps to tackle them with ease.

What are Behavioral Health Claim Denials?

Behavioral Health Claim denial is a common challenge that therapists face in the medical billing operation. It occurs when insurance companies refuse to pay for mental health or substance abuse treatment services. These denials can happen for several reasons:

• Incomplete or incorrect documentation
• Coverage limitations
• Pre-authorization issues
• Coding errors

Claim denials are a huge frustration that impacts the provider’s financial stability and also the patient’s access to care.

They often result in delayed treatment, increased out-of-pocket costs for patients, and administrative burdens for behavioral health providers.

The Reasons Behind the Behavioral Health Claim Denial Raise

According to a survey of over 200 health leaders, the claim denials across all healthcare practices have increased 10-15%. There are several reasons for the rise in medical insurance claim denial rates. 

Insurance companies frequently point to strict requirements for Medicaid denial, which behavioral health professionals can find difficult to meet. 

Moreover, the complexity of medical billing denials, particularly in the behavioral health field, is caused by a lack of standardization and clarity in coverage rules, which increases the likelihood of disagreements and rejections.

Common Reasons for Claim Denials in Behavioral Health

Behavioral health practices often have the same pattern of claim denials. Understanding the reasons will help you to navigate the behavioral health claim denials easily. 

Related: 8 Actionable Steps to Increase Your Practice Revenue by 10x with RCM

Here are the common reasons for claim denials in behavioral health practice.

1. Service Not Included in MCO Benefits

• One of the common claim denials is when the service or procedure is not covered under patient health plan benefits. 
• For example, if a Healthy Options Blind/Disabled (HOBD) customer receives care in a certified public expenditure (CPE) hospital, FFS ProviderOne should be billed, not the Managed Care Organisation (MCO). 
• This is why providers must check the HCA “Provider Identify Payer Table” for particular billing instructions. 
• By doing this, they can make sure that claims are sent to the right payer and prevent needless denials.

2. Service Not Eligible for Coverage

• Denies are also common for services or procedures that are billed in a way that conflicts with the terms of the contract or the relevant HCA Fee schedule. 
• It is recommended that providers confirm if a code is covered by their contract or the HCA pricing schedule. 
• It’s critical to get in touch with customer support for a claim review and to give them a chance to make things right if an Exception to the Rule (ETR) has been allowed or if the service seems to be covered.

3. Procedure Mismatch with Provider Specialty

• Claims may be refused If the provider’s taxonomy differs from the service or operation billed, pointing out inconsistencies in the roster or provider credentialing. 
• This is why providers need to make sure their roster or credentialing data is current for it to match the services billed, particularly if changes have occurred since the last update.

4. Benefit Limit Exceeded

• Billing units over the contract or HCA limit for a certain service or operation is another frequent cause of denials. 
• To avoid denials resulting from surpassing benefit maximums, providers must study the SERI/HCA billing guides and comprehend any restrictions that might be applicable.

5. Incompatible CPT and Location

• It is essential that the service or procedure billed and the location of the service work together. 
• The claim will be rejected, for instance, if CPT H0019 is invoiced with POS 21 but, under SERI/HCA Billing Guidelines, is only covered with POS 55. 
• This necessitates a thorough examination of the SERI/HCA billing guide to verify consistency between location and CPT codes billed.

6. Service Not Covered Under BHSO

• Certain non-covered services may result in claim denials for members of Behavioural Health Service Only (BHSO) with limited benefits. 
• To ascertain if a member is enrolled in a limited plan—one that covers only a limited number of services—providers must confirm the member’s eligibility in ProviderOne. 
• This situation emphasizes the importance of carefully verifying eligibility to guarantee correct invoicing and prevent denials for treatments that restricted benefit plans do not cover.

Related: The Importance of Prior Authorization in Medical Insurance Claims

Solutions to Resolve Behavioral Health Claim Denials

However, challenges are many, behavioral health providers can efficiently solve. Start with a detailed analysis of Claim adjustment reason codes and Remittance advice remark codes.

These offer a comprehensive insight into the root cause of claim denials.

1. Rectify and Submit Claims

• One of the ways to tackle the claim denials is by rectifying the mistakes and resubmitting the claims. 
• After understanding and identifying the cause, correcting and submitting the claims is crucial.
• This involves rectifying any mistakes or omissions in the first claim and making sure that the required paperwork is correct and complete.

2. Additional Document Submissions

• If the denial cause is due to insufficient information, providers must obtain and submit further documents to support the medical need of the treatment. 
• Or to elucidate patient eligibility and coverage specifics in situations where denials are the result of incomplete information.

3. Claim Re-Appeals

Behavioral health providers can re-appeal the claims. The process of re-appealing a claim is classified into three stages:

• Reconsiderations: The initial stage of re-appealing claims is when the provider should request a review of the claim denial.
• Redetermination: If the initial stage (reconsideration) is unsuccessful, the healthcare providers can seek another request for review with additional supporting and justification documents.
• Medical Dispute Resolution: The final stage involves taking part in a formal dispute resolution procedure where they argue their position in front of an impartial review board.

Vozo Revenue Management Cycle Service

At Vozo, we understand your struggle navigating through all the revenue cycle processes such as regulations, medical coding, and reimbursements. 

That’s why we bring the best cutting-edge service to optimize your revenue cycle management from start to finish. Here’s how Vozo can help you transform your practice’s financial performance.

• Automated tools for error-free coding and faster reimbursements
• User-friendly billing to keep patients satisfied and payments flowing
• Robust data security and compliance protocols to protect your practice
• Detailed reporting and analytics for smarter business decisions
• Solutions that grow alongside your evolving needs

With Vozo RCM service, you can reduce the headaches associated with revenue cycle management and focus on what matters the most – quality patient healthcare delivery.

“Partner with Vozo RCM Service and unlock the full potential of your healthcare practice and maximize its revenue”.