I recently got the following question in the comments section of one of my posts. I am very glad to answer the question, but I think the answer is long enough that a full post will be better than just replying to the comment. Here’s the question:
“Could you answer two basic questions: Is medical billing different to mental health practice billing (besides CPT coding, of course)? For instance, when I go to the doctor, I pay the co-insurance, the insurance pays its part and then I get a bill at home to cover the still unpaid portion of the bill. Is this also a practice for mental health professionals? My understanding is that mental health professionals cannot send a bill later to cover the difference between their fee and the insurance rate. And does billing within mental health professionals vary (psychologists, social workers, etc.)? Your blog is the first one I've ever followed. Thank you”
First, thank you for the question. It is a very good one.
To answer your question: There are some quirks to mental health billing. As you noted, there are distinct CPT codes used in mental health. A mental health practice does not usually use regular evaluation and management codes like other healthcare providers. Also, as a general rule, mental health is a separate type of policy attached to your health insurance policy. Accordingly, mental health coverage will vary in several ways:
a. There is often a different mailing address to which doctors mail paper claims
b. There is often a different payer ID to which electronic claims are sent
c. The coverage is often different from those associated with your medical policy
The last item is most significant because it can confuse patients who expect the coverage
to be the same. Regardless of how your regular medical insurance policy works, many mental health policies require a co-insurance (as you noted). A co-insurance is a percentage of the insurance’s allowed amount for which the patient is responsible. With that foundation laid, let me answer your questions specifically.
You stated above that a mental health practice will collect co-insurance and then send a bill for a remaining balance. There are two possibilities here.
First, you must understand that it can be a challenge to collect payments from some patients after they leave the office. Even if you are a good, paying patient – so many people are not good paying customers that practices will often collect as much as they can up front to avoid problems later on. Collecting up front is more challenging when a patient has a co-insurance because the patient responsibility amount is a percentage of the allowed amount which differs by insurance, policy type, provider type, and CPT code.
With that, many mental health practices will estimate the patient responsibility. That way, they can collect a reasonable amount up front. When the insurance EOB comes to the practice it specifies the exact amounts. With that information, the practice will send the patient a bill or a refund for the difference between what the patient was responsible for paying (according to the insurance EOB) versus what the patient actually paid in the office. As long as the practice is only receiving payment up to the insurance’s allowed amount and either applying payments to other dates of service where legitimate balances exist or refunding the patient – this practice is completely legitimate.
The other possibility is that the mental health provider is doing something called balance billing. Balance billing refers to billing a patient for the difference between the provider’s charge amount and the amount that the insurance allows (e.g. the allowed amount). The practice of billing the patient for an amount greater than the insurance’s allowed amount is illegal and a breach of the provider’s contract with the insurance contract.
If you are not sure whether you are being balance billed or whether this payment method is a legitimate estimate payment, you should look at the EOB from the insurance. Find the column on the EOB that indicates the patient responsibility. Then add up the payments you made for that same date of service, if you paid more than the insurance indicated as your responsibility, call the doctor’s office to ask why. One caution, however, if you did over pay, don’t assume something illegal is going on. It could also be a situation where the doctor’s office applied an overpayment to a different service date rather than billing you again. My advice - ask for clarification – don’t accuse.
Now for the second question: Does mental health billing vary by type of provider? Sometimes, yes. Psychiatrists are physicians and therefore get paid by the insurance at a higher rate than, for example, a Licensed Clinical Social Worker (LCSW). Both are totally competent professionals but an LCSW must have a supervising physician associated either on the claim or in the insurance’s records. An LCSW and psychiatrist will often also be allowed different amounts of payment – even for relatively the same service.
Lastly, your insurance policy may be a reason for discrepancy in payment amounts for different provider types. A patient’s policy may have a higher or lower patient responsibility associated with provider types. This is often to encourage patients to see a particular type of provider and save the insurance money. This is similar to how prescriptions work. You may be familiar with the fact that brand name drugs have a higher co-insurance/co-pay than generic drugs….It’s the same premise where the doctor is considered the brand name (expensive one) and the LCSW is generic (less expensive). So the insurance may require less patient out of pocket expense for seeing an LCSW, for example.
I hope I have clearly and thoroughly answered your question. Feel free to ask any follow up questions if needed and again, thank you for the question!