When it comes to billing solutions, mental health professionals have a few choices. You can:

  • Spend countless hours logging procedures, visits and receipts; sending out statements and generating reports; and coordinating with insurance companies and clients;
  • Hire a personal assistant to help you shoulder the work, who you have to train, manage and pay a salary;
  • Purchase software that requires a significant amount of initial set-up time and ongoing annual costs to maintain;
  • Or outsource your billing to a reliable, cost-effective resource that handles it all for you.

Working with a reliable mental health billing service can help you alleviate the stress often associated with the invoicing and collections process, and help you get paid fully and in a timely manner for the services you provide. Ultimately, it can free you up to spend more time helping clients and therefore increase your bottom line.

In selecting a billing company, it’s important that you choose one with knowledge and experience specific to psychology, counseling and related mental health services. Though you can then rely on such a company to oversee the majority of the billing process, you will still need a fundamental working knowledge of billing-related terminology to streamline your communication with the biller.

Beyond knowing the difference between in-network and out-of-network services, and co-pays vs. deductibles vs. allowed amounts, the following is a list of terms* with which you’ll want to be familiar.

Aging: A formal medical billing term that refers to insurance claims that haven’t been paid or balances owed by patients overdue by more than 30 days. Aging claims may become denied if they aren’t filed in time with a health insurance company.

Applied to Deductible (ATD): This term refers to the amount of money a patient owes a provider that goes to paying their yearly deductible. A patient’s deductible is determined by their insurance plan and can range in price.

Authorization: This term refers to when a patient’s health insurance plan requires them to get permission from their insurance providers before receiving certain healthcare services. A patient may be denied coverage if they see a provider for a service that needed authorization without first consulting the insurance company.

CMS 1500: The CMS 1500 is a paper medical claim form used for transmitting claims based on coverage by Medicare and Medicaid plans. Commercial insurance providers often require that providers use CMS 1500 forms to process their own paper claims.

Co-Insurance: The percentage of coverage that a patient is responsible for paying after an insurance company pays the portion agreed upon in a health plan. Co-insurance percentages vary depending on the health plan.

Contractual Adjustment: This refers to a binding agree between a provider, patient, and insurance company wherein the provider agrees to charges that it will write off on behalf of the patient. Contractual adjustments may occur when there is a discrepancy between what a provider charges for healthcare services and what an insurance company has decided to pay for that service.

Coordination of Benefits (COB): COB occurs when a patient is covered by more than one insurance plan. In this situation one insurance company will become the primary carrier and all other companies will be considered secondary and tertiary carriers that may cover costs left after the primary carrier has paid.

Current Procedural Technology (CPT) Code: CPT codes represent treatments and procedures performed by a physician in a 5-digit format. CPT codes are entered together with ICD-9 codes that explain a patient’s diagnosis. Medical billing specialists will enter CPT codes into claims so insurance companies understand the nature of healthcare a patient received with a provider.

Date of Service (DOS): The date when a provider performed healthcare services and procedures.

Day Sheet: A document that summarizes the services, treatments, payments, and charges that a patient received on a given day.

Demographics: The patient’s information required for filing a claim, such as age, sex, address, and family information. An insurance company may deny a claim if it contains inaccurate demographics.

Dx: The abbreviation for diagnosis codes, also known as ICD-9 codes.

Electronic Funds Transfer (EFT): A method of transferring money electronically from a patient’s bank account to a provider or an insurance carrier.

Explanation of Benefits (EOB): A document attached to a processed medical claim wherein the insurance company explains the services they will cover for a patient’s healthcare treatments. EOBs may also explain what is wrong with a claim if it’s denied.

Electronic Remittance Advice (ERA): The digital version of EOB, which specifies the details of payments made on a claim either by an insurance company or required by the patient.

Fee Schedule: A document that outlines the costs associated for each medical service designated by a CPT code.

Patient Responsibility: This refers to the amount a patient owes a provider after an insurance company pays for their portion of the medical expenses.

Private-Pay: Payment made by the patient for healthcare at the time they receive it at a provider’s facilities.

Remittance Advice (R/A): The R/A is also known as the EOB, which is the document attached to a processed claim that explains the information regarding coverage and payments on a claim.

Secondary Insurance Claim: The claim filed with the secondary insurance company after the primary insurance company pays for their portion of healthcare costs.

Write-Off: This term refers to the discrepancy between a provider’s fee for healthcare services and the amount that an insurance company is willing to pay for those services that a patient is not responsible for. The write-off amount may be categorized as “not covered” amounts for billing purposes.

While this list is by no means comprehensive, it is a great starting point to help you accurately and efficiently relay the information your mental health billing service needs to process your billing. If you have any questions about the terms listed, the application of such terms to your services, or other terminology not listed, contact us for help.

* Terminology definitions from Medical Billing and Coding Online, available here.