20 May 2025, 07:23 PM
Managing the billing side of a mental health practice requires more than just sending out claims and hoping for payments. Behind the scenes, there are key performance indicators and coding protocols that shape how services are tracked, billed, and reimbursed. Among these, three elements stand out: the net collection rate, the correct CPT code for psychotherapy, and understanding the various types of authorization in medical billing.
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Understanding Net Collection Rate
The net collection rate is a metric that all mental health professionals should monitor. It shows the proportion of the amount allowed (after contractual write-offs) that you end up collecting. In other words, it shows how well your practice is at collecting for what you provide.
If your net collection rate is less than what you are expecting, then it might be a sign of claim denials, slow follow-ups, or billing errors. Having this rate monitored on a regular basis helps you understand where money is being lost so you can fix it and recover revenue in a better way.
Getting the CPT Code for Psychotherapy Right
Every 30, 45, or 60 minute patient session needs to be properly documented with the proper CPT code. CPT coding for billing is the way in which services are coded. For example, 90834 is used for 45 minutes of individual psychotherapy, while 90837 is used for 60 minutes.
Employing the wrong code or failing to update codes when changes occur (as stated, often they do from year to year) can result in delayed payments or outright denials. Accuracy in coding is necessary not just for payment purposes, but also for compliance and patient documentation.
Types of Authorization in Medical Billing
Authorization is yet another critical step of billing. Most of the therapy sessions or psychological evaluations need authorization ahead of time. The types of authorization in medical billing typically are:
Mental health treatment, particularly long-term counseling or psychological assessment, typically needs pre-authorization to ensure that the sessions get paid for. Without the right authorization, denials and lost revenue can occur.
Conclusion
Bills for mental health are more than an afterthought—they're a vital piece of the puzzle to keep a practice solid and successful. By understanding how crucial your net collection rate is, choosing the right CPT code for psychotherapy, and making yourself aware of authorization types in medical billing, you can put your revenue cycle in motion more smoothly and reduce the likelihood of unwarranted financial loss. In a career where clarity and care are both paramount, being in control of these billing basics allows providers to focus more on what matters most—their patients.
Understanding Net Collection Rate
The net collection rate is a metric that all mental health professionals should monitor. It shows the proportion of the amount allowed (after contractual write-offs) that you end up collecting. In other words, it shows how well your practice is at collecting for what you provide.
If your net collection rate is less than what you are expecting, then it might be a sign of claim denials, slow follow-ups, or billing errors. Having this rate monitored on a regular basis helps you understand where money is being lost so you can fix it and recover revenue in a better way.
Getting the CPT Code for Psychotherapy Right
Every 30, 45, or 60 minute patient session needs to be properly documented with the proper CPT code. CPT coding for billing is the way in which services are coded. For example, 90834 is used for 45 minutes of individual psychotherapy, while 90837 is used for 60 minutes.
Employing the wrong code or failing to update codes when changes occur (as stated, often they do from year to year) can result in delayed payments or outright denials. Accuracy in coding is necessary not just for payment purposes, but also for compliance and patient documentation.
Types of Authorization in Medical Billing
Authorization is yet another critical step of billing. Most of the therapy sessions or psychological evaluations need authorization ahead of time. The types of authorization in medical billing typically are:
- Pre-authorization (before the service),
- Concurrent authorization (with continuous service),
- Post-service or retrospective authorization (with emergency services already rendered).
Mental health treatment, particularly long-term counseling or psychological assessment, typically needs pre-authorization to ensure that the sessions get paid for. Without the right authorization, denials and lost revenue can occur.
Conclusion
Bills for mental health are more than an afterthought—they're a vital piece of the puzzle to keep a practice solid and successful. By understanding how crucial your net collection rate is, choosing the right CPT code for psychotherapy, and making yourself aware of authorization types in medical billing, you can put your revenue cycle in motion more smoothly and reduce the likelihood of unwarranted financial loss. In a career where clarity and care are both paramount, being in control of these billing basics allows providers to focus more on what matters most—their patients.