Top 7 Reasons Mental Health Claims Get Denied and How to Fix Them

Insurance denials are a major frustration for mental health professionals. They delay payments, hurt cash flow, and waste valuable time chasing claims. The good news? Most denials are completely preventable if you know what to look for.

Here are the top 7 reasons mental health claims get denied and exactly how to fix each one.

1. Missing or Incorrect Patient Information

The Problem:
Even a small typo, like an incorrect date of birth or insurance ID, can trigger a rejection. Many claims fail because intake data isn’t double-checked.

The Fix:

• Verify demographics at every visit.
• Use automated EHR tools to cross-check insurance eligibility before each session.
• Train front-desk staff to confirm patient details before claim submission.

2. Invalid or Expired Authorization

The Problem:
Many payers require prior authorization for therapy sessions, especially for continued treatment. Claims without active authorization are automatically denied.

The Fix:

• Track authorization expiration dates.
• Set calendar reminders or use billing software alerts.
• Submit re-authorization requests early—ideally 7–10 days before expiration.

3. Incorrect CPT or Modifier Usage

The Problem:
Using the wrong CPT code or missing modifiers (e.g., 90837 with 90785 for interactive complexity) is one of the top denial causes in behavioral health billing.

The Fix:

• Keep an updated list of covered CPT codes for each payer.
• Cross-check telehealth modifiers like 95 or GT when billing virtual sessions.
• Train clinicians to document time-based codes accurately.

4. Provider Credentialing or NPI Errors

The Problem:
Claims are often denied because the provider isn’t properly credentialed or the claim lists the wrong rendering provider NPI.

The Fix:

• Ensure each provider is credentialed and linked to the practice’s group NPI.
• Keep records of NPI and taxonomy numbers up to date with payers.
• Regularly audit claims for provider mismatches.

5. Non-Covered Services or Diagnosis Codes

The Problem:
Some insurance plans don’t cover certain CPT codes or diagnosis combinations, especially for couples or family therapy.

The Fix:

• Check payer policies before submitting.
• Use the payer’s portal to confirm coverage for each code.
• Submit corrected claims with valid diagnosis and procedure pairings.

6. Late Claim Submissions

The Problem:
Every insurance company has a timely filing limit (often 90–180 days). Submitting after the deadline means automatic denial.

The Fix:

• Submit all claims within 48 hours of each session.
• Track payer filing deadlines.
• Automate submission workflows or outsource to a professional billing company.

7. Insufficient or Incomplete Documentation

The Problem:
If session notes don’t support the CPT code billed, payers can deny or request refunds later.

The Fix:

• Ensure progress notes include time spent, clinical justification, and patient response.
• Conduct periodic documentation audits.
• Educate clinicians on payer-specific documentation requirements.

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Final Thoughts

Denied claims aren’t just annoying—they’re preventable. By building strong front-end processes, double-checking coding accuracy, and staying proactive with authorizations, your mental health practice can cut denials by up to 40%.