Insurance Billing 101 for therapists in private practice
Insurance billing and claims filing is without a doubt one of the most frustrating tasks clinicians and therapists face. Unless you have a strictly private pay practice, therapy billing is something you have to contend with on the daily. Insurance benefits, copays, deductibles, ICD-10 codes and those dreaded CMS-1500 forms…ugh!
Chances are, your graduate program didn’t teach you about how to get paid much less about therapy billing and claims, so you may be asking yourself how to bill insurance for therapy.
Check out our ideas below:
A. You can outsource your therapy billing. You still have to collect the data for the biller and somehow get it to them in a HIPAA-secure manner. And, billers don’t come cheap.
B. You can muddle through on your own and bill manually or through the health plan’s provider portal (if they have one). You can use a clearinghouse. But, you still have to gather all of the necessary data and you have to have some knowledge about billing and using the CMS-1500 format.
C. You can use a practice management software that offers you seamless therapy billing capabilities. You want to do your homework because as you will see below, you want a platform that supports all of the functions you need for successful therapy billing.
Regardless of the process you choose, a basic understanding of therapy billing and claims is must-have knowledge for any clinician. Welcome to Claims 101 where you’ll learn how to bill insurance for therapy step-by-step.
How to bill insurance for therapy
The fact is, no matter what process you choose, filing claims that get paid comes down to 1 very important thing: a clean claim.
What is a clean claim? “Clean claim” is the billing industry’s term for a claim that is complete, factually correct and formatted correctly. Almost every therapy billing platform, portal or clearinghouse uses the industry-standard format style of the CMS-1500.
When third party payers, like insurance companies, receive claims that are missing information, have incorrect information or are not in the correct format, they are required to deny the claim administratively. These are NOT denials due to medical necessity issues. It simply means there is a problem with the claim itself.
What is a CMS-1500?
The CMS-1500 is the standard claim form for outpatient medical and psychiatric services. You’ve probably seen it before – red ink on white paper, a gazillion boxes including a place for your therapy billing codes. It was first developed by the Centers for Medicare and Medicaid (CMS) and has since become the industry-standard form for filing insurance claims.
Filing a claim
Depending on what process you’re using, the steps will vary a little bit. However, every claim requires certain information to be included.
If you’re billing “by hand”, you will need hard copy CMS-1500 forms and a way to print on them. Most insurance companies no longer accept hand-written claims forms. If you’re using a biller, you’ll need a way to securely allow them access to the needed client information.
Filing a claim involves a little preparation that will save you headaches down the road. You’ll want to have your client’s information at the ready along with information about your practice so you can complete the claims submission thoroughly.
You may want to keep your practice information in a centralized location so you can readily refer to it each time you file a claim (until you memorize it, of course!)
Pro tip: Don’t assume a claims processor will overlook something that is missing. Insurance companies are held to very strict regulatory standards for processing claims. They cannot “assume” or “overlook” something incorrect or missing on a claim – even if they know you really, really well. They are required to act on a claim within a very strict window. They are not being mean to you if they deny your claim because you forgot to sign it.
1. Gather your client information
- Correct spelling of full name. Double check the spelling on the insurance card.
- Date of birth and SSN if required
- Plan member ID
- Insured’s information if client is a dependent on the plan
- Dates and place of service
- Diagnostic/ICD-10 code(s)
- Service code and modifiers for each date of service
- Service Provider’s NPI – this tells them who provided the service
- Service Provider’s taxonomy code – this tells them what kind of provider you are
- Practice tax ID (may be different from service provider if billing under a group)
- Practice NPI (may be different from service provider if billing under a group)
- Practice location – be sure to include the complete address
2. Input all of your information into whatever system you use to generate your claim
- If you’re using an insurance plan’s claims portal or clearinghouse, follow the prompts on the screen.
- If you’re entering manually onto a CMS-1500, type all information onto the form or template you’re using.
- If you’re using an integrated practice management system with claims capabilities, like TheraPlatform, this information may already be in place. (Lucky you!) Click your claim button.
- If you use a biller, make arrangements to send them the information. If you use a secure, integrated platform like TheraPlatform, you can give your biller access to your claims data. Again, lucky you! One less thing to do!
3. Double check your claim for data-entry accuracy
- Check for typos. They happen.
- Check for missing information.
- If your claims system allows for a scan for errors, definitely do it!
4. Know your claims submission deadline
- Most insurance companies have deadlines for filing claims.
- To avoid missing submission deadlines, file regularly.
- Establish a claims filing schedule or protocol.
5. Click send (or mail it if you’re doing hard copy)
- You’d be surprised how many “lost” claims are actually the result of someone forgetting to click send.
- Make sure you either print a copy of your sent claim or have a way to access the claim in your system.
Track your claims status
So now you know the logistics of how to bill insurance for therapy and your claim is sent. How long it takes to process depends largely on the insurance company. In general, though, clean electronic claims are turned around pretty quickly. But how do you know you got paid?
When a claim is paid, you will either get a paper check or an electronic transfer of funds. Either way, you will receive some kind of documentation either in the form of an Explanation of Benefits or what is called a Remittance Advice. This document informs you of the claims status and how much was paid.
If you do your own therapy billing, you should have a way to track claims that are submitted and their status. If your biller does this for you, you should have access to that information and a way to provide oversight. It is, after all, your practice and your money.
If you use a therapy billing system, you may have a way to track claims. If not, you will have to devise a system for tracking them. Ideally, you want a system that submits and tracks your claims. TheraPlatform does both.
Even when you know how to bill insurance for therapy, a claim can get denied despite your best efforts. Sometimes, it is simply human error and easily corrected. Sometimes, it is an error on your part. It happens. Sometimes, benefits don’t cover a particular service. And yes, sometimes, people’s benefits expire mid-treatment. (How often do you re-verify benefits?)
What can you do? First thing, stay calm. Getting upset won’t fix anything. Next, pull your claims information. Is it accurate? If not, you may have to refile. If so, it might mean a call to the insurance company. You should see a claims number on your Explanation of Benefits.
If you should have to call and inquire about a pending or denied claim, it will not help you to be ugly or angry with the claims processor. They are limited as to what they can do with a claim that has discrepancies. Their systems generally do not allow for overrides. Stay calm, explain your concern. There is usually a mechanism for correction or refiling. You may have to speak with a claims supervisor who can advise you on the next steps for how to bill insurance for therapy. Remember, there are usually also filing deadlines for resubmitted claims too.
Filing and managing therapy billing and claims doesn’t have to be a nightmare. With a little planning, a little practice and the right tools, even the most claims-aversive therapist can learn how to bill insurance for therapy.
Theraplatform is an EHR, practice management and teletherapy tool built specifically for therapists and can help you submit clean claims with real-time verification. They offer a free, 30-day with no credit card required. Cancel anytime.
- Therapy resources and worksheets
- Therapy private practice courses
- Ultimate teletherapy ebook
- The Ultimate Insurance Billing Guide for Therapists
- The Ultimate Guide to Starting a Private Therapy Practice