Unlike other medical specialties, whose services may be “one-and-done” cases, behavioral health care can be a bit complicated. A recent study projects that patients living with chronic pain are more likely than those without pain to need mental health treatment. Multilayered cases like these also come with complex coding, making revenue cycle management (RCM) an uphill battle. 

To ensure healthy RCM and prevent roadblocks, providers and staff must be armed with the right tools to handle intricate behavioral health codes and ever-changing compliance regulations.  

Below, we clearly define RCM workflows for behavioral health organizations and their significance, reveal providers’ unique challenges, and provide best practices and tools for maximizing reimbursement and a fully robust revenue cycle. 

What is the RCM Process for Behavioral Health Organizations?  

At its core, RCM is a financial process that involves determining, collecting, and managing patient service revenue. This approach to mental health is a little more complex.  

Behavioral health organizations, like addiction treatment centers, have traditionally relied mainly on self-pay for revenue.  

Now, payers cover many services, making the process a bit complicated. Clearly defining each stage of the financial process can be a good first step in helping optimize the behavioral health revenue cycle.  

• Preauthorization: Payers often require that patients preauthorize mental health services before filing medical claims.  
• Patient registration: Because behavioral health is complex, confidentiality and accuracy are crucial at this step.  
• Verification: Reviewing insurance benefits and eligibility.  
• Charge capture: A foundational knowledge of behavioral health codes is critical, as the Current Procedural Terminology (CPT) and diagnosis codes are significantly more complex.  
• Claims submission: Accuracy is key to avoiding denials. 
• Claims assessment: Ensures codes are correctly applied. 
• Remittance: Receipt of reimbursement for services rendered. 

Challenges in Behavioral Health Revenue Cycle Management 

From complicated insurance policies to high denial rates, behavioral health providers face issues that separate them from other healthcare sectors. Here are the top challenges to consider: 

Complex Insurance Policies 

Behavioral health services often involve many types of treatment options and medication management, each with different billing codes and insurance policies. For example, one report found that mental health visits are six times more likely to be out-of-network than primary or specialty care.  

And preauthorization is often rare, which makes for more complicated billing. Combine these issues with other problems like snail-pace manual claims processing and inaccurate coding for specialized services, and providers face challenges often filled with lower collection rates and claim denials. 

Compliance 

Regulations such as the Mental Health Parity and Addiction Equity Act (MHPAEA) require behavioral health providers to comply with specific standards. Failure to meet these regulations can result in claim denials and financial penalties. 

High Denial Rates 

Behavioral health claims often have higher denial rates compared to other medical claims. One survey found that about one in five insured adults who used mental health services (22%) say they had a denied claim.  

A Virginia State Corporation Commission Bureau of Insurance report reveals that claims are denied more frequently for mental health benefits than for medical and surgical ones. Other state department insurance reports stated similar findings.  

Patient Financial Responsibility  

Patients seeking behavioral health services may face high out-of-pocket costs, leading to collection challenges. A National Alliance on Mental Illness (NAMI) report found that out-of-pocket expenses were much higher for mental health providers compared to other medical care. 

Six Best Practices for Effective RCM in Behavioral Health 

A report by the Healthcare Outsourcing and Information Technology investment banking team from Brown Gibbons Lang and Company states, 

“Revenue cycle vendors specializing in autism spectrum therapy, substance use disorder, and broader psychiatric services are innovating around technology and improvements in workforce efficiency.” 

Embracing advanced tech and specialized services in RCM allows behavioral health providers to transform their financial processes and improve revenue collection. Check out these best practices to ensure your cycle flows smoothly. 

1. Don’t go it alone – embrace advanced RCM software 

Behavioral healthcare providers tend to be solo and lack front-office staff. According to Medical Care, 89.1%  of licensed behavioral health practices in the US were single-physician.  

Without extra staff, providers must handle billing themselves. Investing in an integrated electronic health record (EHR) with advanced medical billing software can automate most of the manual duties involved in RCM.  

By leveraging these solutions, providers can improve efficiency, save time, and reduce errors. For example, with a cloud-based, fully integrated EHR system like DrChrono, providers can:  

• Check Electronic Remittance Advice (ERA) directly from the platform. 
• Conduct real-time insurance eligibility checks. This solution also allows providers to batch-check eligibility for a patient in multiple service types all at once. 
• Receive payments faster. With their Payments tool, providers can request and collect payments online or on mobile devices. 

2. Develop strong payment policies 

Medical staff in behavioral health practices face complex coding questions, such as how to bill chronic care services versus behavioral health services when a patient with multiple health issues also has mental health conditions. 

To avoid coding mistakes, make sure your medical staff are well-versed in the latest billing codes, insurance policies, and compliance regulations. Regular training sessions help prevent errors and improve office workflows. 

3. Prioritize patient communication  

A Census Bureau analysis found that 20 million people owe medical debt. Behavioral health providers can help patients avoid mounting bills by offering clear and transparent communication about their healthcare financial responsibilities.  

For patients, especially those with limited access to a computer, mobile functionality such as sending statements to a patient’s cell phone improves access and transparency with payments. For example, the EHR platform DrChrono offers a cloud-based iPad EHR app.  

This solution provides a full-featured EHR on iPhone, which allows providers to document an entire patient encounter and bill insurance. It also offers an integrated payment solution for patients where providers can send electronic statements to patients’ phones or text payment links.  

4. Make sure charge capture is thorough 

The Healthcare Financial Management Association (HFMA) revealed that medical practices lose around $125,000 annually due to insufficient charge capture processes. As behavioral health revenue cycle management is even more complex than that of other practices, an accurate charge capture process can improve performance and mitigate future revenue loss. 

For example, CollaborateMD practice management software has a Charge Capture tool that offers a single app for billing codes. This solution pinpoints common payment issues, such as missing or late charges, in the practice’s revenue cycle and areas that need improvement. 

5. Stay clear of denials 

Implementing proactive denial management strategies within the revenue cycle management process can help providers identify and address issues before they start. Here’s how: 

• Analyze denial data. The best way to reduce denial rates is to assess current and past process claims fully. For example, DrChronos offers a Denials Analysis tool that shows providers’ common denial reasons, the top codes getting denied (CPT, ICD-10, or HCPCS), and the insurance payers most frequently denying billing claims.  
• Diversify payor networks. A blend of different payers ensures providers can always negotiate rates if one constantly denies claims. 
• Locate denial resolution services. To ensure services provided are compensated accordingly, invest in an integrated EHR platform that offers denial resolution solutions that automatically address denials to improve collections.  

6. Outsource if needed 

The ultimate goal of revenue cycle management is to ensure that your practice is paid quickly and accurately. To do this, consider outsourcing certain areas of RCM, such as medical coding or billing, to specialized teams.  

For example, regular coding audits can pinpoint issues before they become major headaches. If your behavioral health practice needs experienced coding staff, outsourcing certified medical coders to audit CPT, ICD-10, or HCPCS codes can dramatically improve your practice’s revenue. 

Looking Ahead 

Revenue cycle management can make or break behavioral health providers’ financial health and longevity. By understanding this sector’s unique challenges and implementing best practices, providers can optimize their revenue cycles, reduce claim denials, and improve their overall financial performance, returning to what really matters: exceptional mental health care to patients.