You’ve studied the latest coding requirements. You’ve documented every diagnosis and service with care. You’ve executed what you believe are all the behavioral health coding and revenue cycle management (RCM) best practices. And yet, a small error still causes a payer rejection, delaying reimbursement and straining your bottom line.
Situations like these are far too common in the behavioral health care space, where payers and regulators heavily scrutinize coding and its supporting documentation. Even the slightest inaccuracy or omission can lead to claim denials or non-compliance fees, which aren’t just an organizational headache, but a strain on a facility’s overall revenue.
Enter coding audits. When conducted regularly and strategically, they can help prevent costly setbacks and future-proof behavioral healthcare organizations.
In behavioral health, regulations and requirements come from all angles:
Federal laws, like the rules dictated by the Centers for Medicare and Medicaid Services (CMS), detail coding requirements that all behavioral health organizations must follow to remain compliant and receive appropriate insurance reimbursement for services rendered.
State regulations for behavioral health licensure, medical coding, and Medicaid policies vary, leading to significant challenges for cross-state organizations.
Commercial payers require unique billing procedures, coding practices, and documentation.
On top of these regulatory and insurance bodies, providers must also juggle different medical coding standards, including the ICD-10 medical codes, Current Procedural Terminology (CPT) codes, and the Healthcare Common Procedure Coding System (HCPCS) codes.
Meeting these coding and billing requirements — which change often — can be a time-consuming and error-prone process for many behavioral health organizations. Additionally, insufficient documentation of clinical rationale can weaken medical necessity support, exposing providers to risk of recoupment or compliance review.
Coding audits, in which teams analyze a sample of billing and insurance claim submissions, can help organizations prevent costly payment delays and denials. In these processes, teams review documentation patterns, coding-to-service alignment, and billing procedures to identify mistakes or bottlenecks that may be costing the organization money.
The American Medical Association recommends conducting coding audits at least annually, as doing so can help organizations:
Spot and address long-term coding patterns that might be negatively impacting their revenue
Defend against recoupments (clawbacks) and payer denials
Uncover under-documented services due to misaligned behavioral health coding
Strengthen their overall revenue cycle management
Coding audits can result in improved coding and billing practices, optimized documentation, and more accurate, compliant, and faster payment processes.
When it comes to effective medical coding and auditing processes, it pays to have a plan. It can take time to conduct an annual or quarterly audit, so follow these steps to proactively prepare for and get the most out of your behavioral health coding review.
Behavioral health care involves complex rules around the types and length of services providers deliver. Before you start your coding audit, ensure your RCM team understands these common red flags that often lead to payment delays and denials:
Upcoding, in which providers code for a more severe diagnosis or treatment than their client’s case required.
Incorrect or vague diagnosis codes —such as coding generalized anxiety disorder (GAD) as F41.9 (unspecified anxiety disorder) — may lead to denials when the clinical record clearly supports F41.1 (GAD).
Missing or incomplete documentation, which creates significant challenges for completing accurate behavioral health coding.
Mixing outpatient and inpatient codes unnecessarily.
Unspecified or inaccurate service type, like billing individual services for group-therapy service delivery.
Inaccurate service times, as specific time intervals require distinct CPT codes (for example, codes 90832 or 90833 for sessions 16–37 minutes in length).
Last year’s coding audit might have gone off without a hitch, but in the year since, it’s likely that there have been changes to behavioral health coding and billing requirements. As such, your team should monitor CPT and ICD-10 updates regularly to ensure your medical coding and audit processes align with the most up-to-date standards. For example, psychotherapy codes (90832, 90834, 90837) require precise time documentation, and telehealth waivers may shift year to year. Missing these updates creates audit vulnerabilities.
Using an electronic health record (EHR) designed for behavioral health can help automate this process by providing integrated coding and compliance checklists, as well as task-based notifications for clinical and RCM team members. These features can empower teams to stay on top of coding updates and accountable to meeting requirements and deadlines.
Don’t wait until payment delays and claim denials add up to solve persistent issues. Instead, schedule annual or quarterly preventive audits to enable your team to catch and address errors before regulators and payers do.
Scheduling regular behavioral health coding audits allows your team to spot high-level patterns, such as consistent misuse of particular codes, before they further strain your organization’s revenue.
Documentation is especially critical in behavioral health, as many diagnoses and treatment plans are based on qualitative assessments. Coding standards follow suit, requiring providers to often submit detailed and comprehensive documentation including:
Service start and stop times
Client information, such as their name, address, and phone number
Type of service provided
Problem statements and diagnoses
Support for medical necessity
Progress toward treatment goals
During your behavioral health coding audit, identify persistent documentation errors that could be hindering your RCM. Then, put systems in place — such as the use of templates and checklists in your EHR — to prevent those errors from recurring.
Similarly, it’s crucial to assess insurance claim denials to pinpoint consistent coding errors that might be leading to rejections. Look for misaligned codes, errors meeting payer-specific requirements, and incorrect client information. Tracking denial patterns not only supports financial sustainability but also highlights areas where provider documentation training may be needed.
Additionally, rely on an advanced EHR for automated eligibility requirements, as those capabilities can streamline verification and ensure insurance coverage prior to billing.
Preventing costly payment delays and denials is an all-hands-on-deck effort. Training — and regularly retraining — your clinical and RCM teams on proper documentation practices, billing compliance, and coding rules and updates can ensure everyone works together to advance your organization’s RCM capabilities.
A crucial step in this process? Equipping teams with the communication, collaboration, and accountability features of a top-tier EHR like Core Solutions’ Cx360 Enterprise platform.
With artificial intelligence (AI)-backed support tools, powerful embedded RCM solutions, and bespoke compliance and coding checklists, Cx360 helps behavioral health organizations sustain their financial performance for the long term.
Don’t let small errors create big setbacks. Discover how Core Solutions’ Cx360 platform strengthens coding audits, protects your RCM, and supports a healthier bottom line.