by Rachna Bagdi on January 28, 2025
Mental health software has been shown time and again to increase revenue, save clinics considerable time, and enable clinicians to provide better client care. These are just some of the reasons why the market for such technologies is projected to grow to nearly $15 billion by 2033, according to Allied Market Research.
Software has also taken on an increased importance in supporting and optimizing mental health revenue cycle management. For clinics, finding the right software can mean the difference between smooth or inconsistent cash flow and strong or poor relationships with clients and insurance companies.
Here’s a look at pervasive challenges that today’s mental health organizations face as they manage payments and reimbursement and how advanced mental health billing programs can make a significant difference in revenue cycle performance.
1. Accessing and Maintaining Accurate Information
Incomplete or inaccurate client data and insurance information can disrupt revenue cycles, lead to lost time and money, and negatively impact client satisfaction. If mental health providers lack the correct records, claims may be denied or payment delayed due to determination of insurance ineligibility. Searching for the right information and correcting errors puts a strain on staff and operational efficiency and wastes valuable resources.
Reimbursement may also be impacted if inaccurate client records lead to misdiagnosis. A BMJ Quality & Safety study found that a lack of sufficient, timely, and accurate patient data contributes to misdiagnosis rates of up to 29% for major depressive disorder and 18% for anxiety disorder. A misdiagnosis can lead to the wrong ICD-10-CM coding for services, which can then result in billing errors and improper reimbursement.
By using disorganized systems prone to introducing errors, organizations run the additional risk of damaging relationships with clients and insurance companies. But with mental health billing programs built into robust electronic health records (EHRs), facilities can better ensure they have the right patient information to support the timely submission of clean claims. A top-rated EHR also enables mental health organizations to capture billing details, which can then be made available to all providers in their care continuum.
When adopting an EHR with a mental health revenue cycle management component, it’s also advisable to select a solution that allows clients to pay bills directly through the technology’s portal, which saves staff time that would be spent tracking down payments.
2. Navigating Insurance Challenges
According to the National Center for Health Workforce Analysis, more than half of people in the U.S. live in mental health provider shortage areas. This not only means that millions of people lack access to the care they need, but many will need to go out of their insurance network to find providers. At the same time, most insurance plans — including 99% of Medicare Advantage plans — require some form of preauthorization for mental health care.
Navigating these insurance hurdles can put additional strain on already-overworked providers and staff and often slows down billing procedures. Advanced billing software for therapists and other mental health professionals can often integrate directly with payers. This enables clinics to manage preauthorization requirements, including setting alerts for when preauthorization is required or problems arise; keep providers and clients informed of out-of-network benefits, including coverage levels; provide cost estimates for out-of-network care; and allow for the customization of billing settings like payment rates.
3. Using the Correct Mental Health Billing Codes
Claim denials and payment issues often come down to improper coding of mental health care services. There are currently more than 20 CPT mental health billing codes specific to treatment and services, each identifying the type, duration, and complexity of care delivered. To meet the needs of the increasingly digital healthcare landscape, Medicare introduced new billing codes for digital mental health services in 2025.
Using the right mental health billing codes and adapting to changes finalized in the Centers for Medicare & Medicaid Services’ (CMS’) rules can be burdensome for many clinics. But strong mental health billing programs come with embedded, up-to-date billing codes, as well as evidence-based workflows that help clinic staff connect the right codes with the right service types.
4. Managing Claim Denials
In mental health care, insurance claim denials can be detrimental to clinics and clients alike. One study found that 22% of insured people who used mental health services were denied, compared to the average 18% for all facilities. This figure means that nearly a quarter of people seeking mental health care are saddled with the financial burden — and that mental health facilities too often don’t get paid.
An EHR with embedded mental health billing programs, tracking reports, and analytics can help ensure that data is timely and accurate. Clinics can create bespoke workflows to streamline the denials management process and use role-based tasks — with notifications and alerts — to ensure everyone completes their required claim submission tasks on time. Achieving a more seamless process can help reduce the number of claim denials and speed up the payment process.
5. Overcoming Reimbursement Hurdles
Navigating complex reimbursement systems can similarly impede a clinic’s cash flow. In fact, some mental health providers don’t even bother to accept insurance due to the potential challenges of securing contracts and submitting and getting paid appropriately for claims, as well as the perceived imbalances between the value of services delivered and total reimbursement received. According to the American Psychological Association, low reimbursement rates are a significant factor in why more than a third of psychologists don’t take insurance at all.
But for those providers who contract with payers, mental health billing programs, particularly those with specific mental health revenue cycle management features, can support clinics’ administrative capabilities by reducing the amount of time spent working through convoluted processes. With the right EHR and billing software for therapists and other mental health professionals, clinics can configure billing templates to align with insurance companies’ exact requirements, making the information that must be submitted with a claim far more accurate.
6. Keeping Pace With Compliance Requirements
Achieving speedy reimbursement and efficient billing procedures also depends on mental health facilities’ ability to meet their state’s and insurance companies’ compliance expectations. Lack of proper licensing and credentialing, incomplete documentation of clinical services, poor billing transparency, and non-compliance with mandates can hinder payment processes, not to mention make clinics incur non-compliance fees from state and federal governing organizations.
The best EHRs and mental health billing programs come with built-in compliance trackers that automatically populate compliance deadlines. Practice staff, clinicians, and partner organizations know exactly who needs to do what by what time, helping prevent mistakes and oversights that lead to denials and other avoidable issues.
7. Understanding Complicated Telehealth Billing Needs
Offering telehealth services is a great way for mental health organizations to increase access to their services without needing to significantly expand their physical footprint. But with the added convenience of telehealth also comes further complications with additional billing codes, compliance issues, and insurance ramifications — all of which can slow down cash flow and add more costs to care delivery.
As client demand for telehealth continues to grow, it’s critical for facilities to adopt mental health billing programs that embed telehealth capabilities — and their associated revenue cycle management protocols — directly into the EHR. The EHR captures accurate time logs of telemedicine appointments and connects those with the appropriate billing workflows, helping clinics avoid costly errors and ensure proper payment for virtual services rendered.
Cx360 Platform: Your Comprehensive Mental Health Billing Solution
Strong mental health revenue cycle management, simple insurance verification, and accurate data collection and organization are just a few of the things a mental health practice needs to stay financially stable and reach growth goals. Core Solutions’ Cx360 platform comes with all these integrated features, plus many, many more.
With the Cx360 platform, you can:
- Manage billing processes from end to end
- Process HIPAA eligibility verification transactions
- Employ configurable billing templates
- Set fee schedules based on staff types
- Improve accounts receivable management
In addition to comprehensive billing capabilities, the platform also offers cutting-edge artificial intelligence tools, customizable dashboards, and secure care coordination. Together, these features enable mental health facilities to deliver the best care possible while achieving long-term financial success.
Reach out to learn more about the Cx360 platform’s all-in-one billing capabilities.
