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For therapists, counselors, psychologists, and behavioral health practices, accepting insurance can make mental health services accessible to more patients—but getting paid by insurance involves much more than simply conducting a therapy session and sending an invoice.
To receive reimbursement consistently, a therapist generally needs the appropriate professional license, payer enrollment or credentialing where required, accurate insurance verification, correct coding, sufficient clinical documentation, clean claim submission, and effective follow-up on unpaid or denied claims.
The process can be summarized as:
Credentialing → Eligibility Verification → Patient Visit → Documentation → Coding → Claim Submission → Payer Adjudication → Insurance Payment → Patient Responsibility → A/R Follow-Up
Understanding each step can help behavioral health practices reduce preventable denials and build a healthier revenue cycle.
When an insured patient receives covered therapy from an eligible provider, the therapist or behavioral health practice submits a claim to the patient’s insurance company.
The payer reviews the claim based on the patient’s benefits and its own coverage, network, authorization, coding, and medical-necessity requirements.
The payer may then:
The therapist’s payment can therefore come from both the insurance company and the patient, depending on the patient’s benefit structure.
HealthCare.gov explains that patients may be responsible for deductibles, copayments, and coinsurance under their health plans.
Before insurance credentialing begins, therapists generally need to satisfy the professional licensing requirements for the state where they practice and any applicable requirements for the services they provide.
The exact license depends on the profession and state and may include credentials such as:
Licensure alone, however, does not automatically make a therapist in-network with an insurance company.
That typically leads to the next step: payer credentialing and enrollment.
If a therapist wants to participate in an insurance network, the payer generally needs to verify the provider’s qualifications and complete its credentialing, enrollment, and/or contracting process.
Depending on the payer, this may involve:
NPI → CAQH → Credentialing Application → Verification → Contracting → Network Effective Date
The payer may review information such as:
A therapist should not assume that submitting an application means they are already in-network. The effective participation date should be confirmed before claims are submitted as in-network services.
Insurance should ideally be verified before the patient’s appointment.
The billing team should determine whether the patient’s policy is active and whether behavioral or mental health services are covered.
Important items to check can include:
Marketplace plans include mental health and substance use disorder services among essential health benefits, and federal parity protections generally prevent certain financial and treatment limitations for mental health/substance-use benefits from being more restrictive than comparable medical/surgical limitations.
Coverage details still vary by plan, so benefits should be verified for the individual patient.
After eligibility and benefits are verified, the therapist provides the medically appropriate service.
Documentation is critical because insurance reimbursement depends not only on what was billed but also on whether the medical record supports the billed service.
A therapy note may need to document, as applicable:
For time-based psychotherapy services, accurate time documentation is particularly important. Medicare guidance, for example, expects the medical record to support the time associated with psychotherapy codes.
The therapy service must be translated into the appropriate billing codes.
Common psychotherapy-related CPT codes include:
| CPT Code | General Description |
|---|---|
| 90791 | Psychiatric diagnostic evaluation |
| 90832 | Psychotherapy, approximately 30 minutes |
| 90834 | Psychotherapy, approximately 45 minutes |
| 90837 | Psychotherapy, approximately 60 minutes |
| 90839 | Psychotherapy for crisis, first 60 minutes |
| 90840 | Additional crisis psychotherapy time |
| 90846 | Family psychotherapy without patient present |
| 90847 | Family psychotherapy with patient present |
| 90853 | Group psychotherapy |
CMS recognizes 90832, 90834, and 90837 among the psychotherapy codes and provides specific time-related billing guidance for Medicare.
The claim will also generally include an appropriate ICD-10-CM diagnosis code supported by the patient’s documentation.
Correct coding matters because mismatches among the diagnosis, service, time, provider type, authorization, and documentation can contribute to denials.
Once the session is documented and coded, the claim is prepared and submitted electronically, usually through the practice management system, EHR, clearinghouse, or billing company.
A professional behavioral health claim commonly contains information such as:
The clearinghouse may first check the claim for basic formatting or data errors before forwarding it to the payer.
This creates an important distinction:
Claim rejection: The claim often fails before full payer adjudication because of a data, eligibility, formatting, provider, or other front-end issue.
Claim denial: The payer received and adjudicated the claim but did not approve payment as billed.
Both require timely follow-up.
Once the payer receives an acceptable claim, it determines how much it will allow and who is responsible for paying it.
Suppose, purely as an illustration:
Therapist’s billed charge: $180
Insurance contracted allowed amount: $120
Patient copay: $30
Insurance responsibility: $90
The practice generally cannot collect the difference between its full billed charge and the contracted allowed amount from an in-network patient when the contract requires that difference to be written off.
Actual reimbursement depends on the payer contract, benefit plan, provider type, service, geographic area, and other factors.
After adjudication, the payer typically provides payment information through an:
ERA — Electronic Remittance Advice
or
EOB — Explanation of Benefits
The remittance explains how the payer processed the claim.
It may show:
The payment is then posted to the patient’s account.
Many practices use EFT (Electronic Funds Transfer) so insurance payments are deposited directly into the practice’s bank account.
Insurance reimbursement does not necessarily mean the therapist receives the entire allowed amount from the insurance company.
The patient may still owe:
Copay + Coinsurance + Deductible = Patient Responsibility
For example, when a patient has not satisfied a deductible, a covered therapy claim may be processed toward that deductible, leaving the patient responsible for more of the allowed amount.
A strong front-office workflow helps patients understand expected costs before treatment whenever possible.
Submitting the claim is only part of the revenue cycle.
Practices should monitor unpaid claims and aging A/R.
Common behavioral health claim problems can involve:
The billing team should determine the reason, correct the issue when appropriate, submit corrected claims or appeals when supported, and continue payer follow-up.
Without systematic A/R follow-up, valid revenue can remain outstanding unnecessarily.
Teletherapy has become an important part of behavioral healthcare.
The general reimbursement process remains similar:
Verify telehealth coverage → Provide eligible service → Document session → Apply correct coding/POS/modifier requirements → Submit claim → Follow payer response
However, telehealth billing requirements can vary among Medicare, Medicaid programs, commercial insurers, employer plans, and individual payer contracts.
Practices should verify current payer-specific requirements instead of assuming that an in-person service and a telehealth service are billed identically.
Yes—for provider types that meet Medicare’s eligibility and enrollment requirements.
A major change took effect on January 1, 2024, when eligible Marriage and Family Therapists (MFTs) and Mental Health Counselors (MHCs) became able to enroll in Medicare and bill independently for covered services used in diagnosing and treating mental illnesses. CMS states that Medicare Part B pays MFTs and MHCs for these services at 75% of the amount paid to a clinical psychologist under the Medicare Physician Fee Schedule.
CMS also recognizes other behavioral health practitioners under applicable Medicare rules, including clinical psychologists and clinical social workers.
Enrollment requirements should be confirmed before treating Medicare beneficiaries with the expectation of reimbursement.
Therapists can operate under different insurance models.
An in-network therapist has a participation agreement with the payer.
The therapist generally:
Accepts contracted rates → Submits claims → Receives payer payment → Collects applicable patient responsibility
The advantage can be access to a larger population of insured patients, but the practice must comply with the payer contract and reimbursement structure.
A therapist who is not contracted with a patient’s insurance may collect payment from the patient and, where permitted, provide documentation such as a superbill that the patient can submit for potential out-of-network reimbursement.
Whether the patient receives reimbursement depends on their plan’s out-of-network benefits and applicable rules.
Out-of-network care may not count toward the same cost protections as in-network services; HealthCare.gov notes, for example, that out-of-network spending generally does not count toward Marketplace plans’ in-network out-of-pocket limit.
Credentialing directly affects reimbursement.
A therapist may be fully licensed and qualified to provide care but still be unable to receive in-network reimbursement from a particular payer until the required credentialing, enrollment, contracting, or network activation is completed.
Before seeing patients as an in-network provider, verify:
Application Approved → Contract Completed → Effective Date Confirmed → Provider Loaded in Payer System → Billing Information Verified
Do not assume that CAQH completion alone means the therapist is credentialed with every insurance company.
Behavioral health practices should pay particular attention to:
1. Eligibility problems
Coverage was inactive or incorrect.
2. Credentialing problems
The therapist was not enrolled or effective for the date of service.
3. Authorization problems
The plan required authorization that was not obtained.
4. Coding errors
The CPT, diagnosis, modifier, or place of service was incorrect.
5. Documentation deficiencies
The medical record did not adequately support the billed service.
6. Timely filing
The claim was submitted after the payer’s deadline.
7. Duplicate claims
The payer believes the same service has already been submitted.
8. Coordination of benefits
The wrong insurer was billed as primary.
The best strategy is not simply to work denials faster—it is to identify recurring causes and prevent them upstream.
For a well-managed behavioral health practice, the process should look like this:
Provider Credentialing
↓
Patient Scheduling
↓
Eligibility & Benefits Verification
↓
Authorization, if Required
↓
Therapy Session
↓
Clinical Documentation
↓
CPT + ICD-10 Coding
↓
Clean Claim Submission
↓
Payer Adjudication
↓
ERA/EOB
↓
Payment Posting
↓
Patient Responsibility
↓
Denial & A/R Follow-Up
Every stage affects how quickly and accurately the therapist gets paid
Therapists should be able to focus on their patients—not spend hours chasing insurance companies.
Nexa Digital Pro provides comprehensive medical billing, behavioral health RCM, and provider credentialing support for therapists, counselors, psychologists, psychiatrists, and behavioral health practices across the United States.
Our services include:
Whether you’re opening a new therapy practice, adding a therapist, joining insurance networks, or struggling with aging A/R and denied claims, an organized billing and credentialing process can make a significant difference.
📞 210-940-9848
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The therapist generally becomes eligible with the payer, verifies the patient’s benefits, provides and documents a covered service, submits a properly coded claim, and receives payment based on the payer’s allowed amount and the patient’s benefits.
Payment time varies by payer, claim type, state requirements, contract, and whether the claim is submitted correctly. Clean electronic claims generally move faster than claims requiring corrections, records, or appeals.
Common psychotherapy codes include 90791, 90832, 90834, 90837, 90846, 90847, and 90853, depending on the service provided and applicable payer requirements. CMS specifically recognizes psychotherapy codes including 90832, 90834, and 90837.
Eligible provider types can. Since January 1, 2024, qualifying MFTs and MHCs can enroll in Medicare and independently bill Medicare for covered mental health services.
Not necessarily. Deductibles, copayments, coinsurance, network status, allowed amounts, and other benefit provisions determine how costs are divided between the insurer and patient.
If a therapist wants to participate as an in-network provider, they generally need to satisfy that payer’s applicable credentialing, enrollment, and contracting requirements. Participation with one payer does not automatically establish participation with another.
Author: Michael Clarke
