One of the most missed revenue leaks in behavioral practices is for the provider to underpay the patient. The claim can be processed, paid in the system and be closed, while the paid amount can be less than the agreed amount. Without early detection, providers of mental health services may forfeit thousands of dollars per year in these short payments.
This is where mental health billing services come in handy. Not only are they submitting claims and posting payments, but they are also checking the accuracy of payment by the payers, verifying payments are in line with contracts, examining variations, and recovering underpaid revenue. Small payment discrepancies in behavioral health billing, which involves services such as psychotherapy, psychiatric assessments, medication management, group therapy, family therapy, and substance use treatment, can result in significant financial losses.
So, what is a Payer Underpayment in Behavioral Health Billing?
A payer underpayment is when an insurance company pays less than the amount they are supposed to be paying or contracted for a service that is covered. It can show up as not denied, and the payer can send a letter of explanation; however, the reimbursement is not what it was expected to be.
Underpayment examples include, for instance, a psychotherapy session where a payer contract specifies $120 and the payer reimburses $95. This becomes quite costly for the practice if it occurs with multiple claims over the course of hundreds of claims.
Why is it that underpayments are so common in the behavioral health industry?
Behavioral health billing is complicated, as there are numerous rules that differ by the type of service, provider credential, provider location, diagnosis, authorization, and type of plan. Several types of therapists (psychiatrist, therapist, nurse practitioner, psychologist or substance use counselor) may receive different reimbursement options.
Contract and Fee Schedule Confusion
There are many behavioral health providers that do not have easy access to updated payer fee schedules. Other contracts may have varying rates for telehealth, in-office visits, facility visits, and intensive outpatient visits. If you don’t have the correct information on the contract, you have no way of knowing it is paid correctly.
Inaccurate reimbursed CPT Codes
Common behavioral health CPT codes such as 90791, 90832, 90834, 90837, 90846, 90847, 90853, and 99214 may be reimbursed differently depending on payer policies. A claim can be paid but not at the right rate.
Issues with modifiers and Telehealth payments
Certain modifiers and place-of-service codes may be necessary when billing for telehealth services. A provider might end up receiving less than they are expecting when a payer processes a claim for telehealth services in the wrong payment policy. These disparities are tracked by behavioral health billing services to avoid losing revenue twice.
Underpayments are identified by Mental Health Billing Services
Professional mental health billers employ a systematic approach to uncover under payments on the prior to becoming permanent losses. The purpose isn’t just to verify that a claim has been paid, but also to verify that it was paid appropriately.
Payment Posting Review
The first clue of under-payment is typically when it is posted to payment. Billing teams compare the amount allowed by the payer, the amount paid, the amount adjusted and the amount expected to be reimbursed with the amount paid out, the amount adjusted, the amount deductible, the coinsurance, and the amount due from the patient.
A claim is marked for review if the payer adjustment is excessive or the allowable amount is below the contract amount.
Contractual Rate Comparison
Billing team is strong with proper fee schedule and contracted rates with payers. These rates are used to check for accuracy against each payment. This comparison is crucial since many of the underpayments are not evident on the EOB alone.
EOB and ERA Analysis
The Explanation of Benefits and Electronic Remittance Advice files contain valuable information about the processing of a claim. The Mental health billing services check out denial codes, adjustment codes, remark codes and patient responsibility for the correct payment or payer reduction.
The most frequent reasons for underpayments by payers.
There are many reasons for underpayments. Some are caused by payer errors and others are due to billing setup problems or outdated information.
Older Payer Fee Schedules
Old fee schedule information could be present in the billing system, leading to staff not realizing that a claim was underpaid. New contract details are required for paying.
Incorrect Provider Credentialing
A claim can be paid from a provider profile, taxonomy, network status, or group contract that are incorrect. This can result in reduced reimbursement rates or reimbursement outside of the network.
The OPS code and/or modifier are incorrect.
Reimbursement for behavioral health services provided via telehealth, office visits or facility setting can vary. If the code for the service rendered is not correct or a modifier is not included, the amount paid may be less.
Bundling or Downcoding
Certain payers may round services up or down, downcode claims, or bundle services. For instance, a 90-minute psychotherapy session could be billed as a 30-minute session if documentation, coding or processing with the payor is incorrect.
Underpaid claims are recovered in a few ways.
Finding an underpayment is just the beginning. Recovery needs proof, paperwork and follow up with the payers.
Claim Reconsideration
Billing teams are eligible to file a reconsideration request if the payer incorrectly processed the claim. This typically should contain the claim number, payment information, contracted rate, EOB copy, and explanation of underpayment.
Corrected Claim Submission
A corrected claim could be necessary if the underpayment is due to a coding error, modifier error, or billing error. Behavioral health billing services guarantee the correction is done correctly before it is resubmitted.
Formal Appeal
If a payer does not agree to correct the payment, a formal appeal could be required. The key components of a good appeal are the contract references, clinical documentation (if applicable), authorization documentation, payer policy documentation, and a clear understanding of what the expected reimbursement will be.
Payer Escalation
Certain underpayments must be escalated to the Payer Representatives, Provider Relations Departments and Contract Managers. The professionals’ billing staff keep track of all calls, reference numbers, submission dates and follow-up dates.
The importance of reporting in underpayment recovery
Accurate reporting will enable practices to know where they are losing income. There are various patterns available on the underpayment report: by payer, by cpt code, by provider, by location, by service type, and by date range.
If one payer repeatedly underpays 90837 claims, it could be a problem with contract loading. A problem with telehealth coverage policy configuration may be the reason for claim payments that are paid less than what is expected. With these insights, mental health billing services can identify the cause of the problem and resolve it rather than being consumed by the endless chase for the same problem claim by claim.
Underpayments are a growing problem these days, and why are businesses not taking them seriously?
A $10 or $20 underpayment might not seem like much, but behavioral health practices tend to have consistent patients coming in weekly or monthly. Even minor variations in repeated sessions can result in big loses.
For instance, if a practice receives $15 less per claim on 300 claims, it’s $4,500 less revenue. If it persists year after year, the cost increases even more. That’s why underpayment recovery is a serious matter in the revenue cycle management (RCM) of behavioral health billing services.
What things can you do to avoid future underpayments?
Clean billing information and continuous tracking are the first steps in prevention. Practices need to keep up to date contracts with payers, analyze reimbursement patterns, check provider credentials, audit payment postings and track changes in payer policies.
Mental health billing services also aid practices in setting up internal controls. These could contain any regular payment checks, monthly underpayment reports, payer particular reviews, or escalation workflows. With these controls in place, it will be more likely and quicker to detect and recover underpayments.
Conclusion
Underpayments will be hidden and will take revenue even if claims look paid. Underpayment detection is a critical issue in behavioral health billing, where payer rules are specific and reimbursement is complex, based on the type of service, provider, and contract.
Mental health billing services for professional practices include identifying incorrect payments, comparing reimbursements to contracted rates, analyzing EOBs, filing reconsiderations, making appeals, and escalating payer issues. A good behavioral health billing service is not just about claim processing; it’s about safeguarding the financial health of the practice.
When payments are tracked and acted on quickly, behavioral health providers can recover lost revenue, avoid future underpayments and have a more healthy revenue cycle.
FAQs
Underpayment in BH Billing: What does that mean?
Underpayment is a situation in which a health insurance company pays less than the amount it has agreed to or expects to pay for the behavioral health service it covers.
How mental health billing services can detect under payment?
They compare posted payments, fee schedules, payer contracts, ERAs, CPT codes and modifiers to EOBs and expected reimbursement amounts.
Are there any claims that can be recovered if they are undervalued?
Yes. Claims that are underpaid can typically be recovered via recons, corrected claims, appeals or payer escalation.
What is the reason for the underpayment of behavioral health claims?
They may result from incorrect modifiers, incorrect place-of-service codes, contract loading errors, a policy change by the payer, credentialing problems, and down-coding.
When should underpayment reports be reviewed?
All behavioral health practices should check under payment reports once a month, and high volume practices should check weekly.
