Managed care plans report these common situations that lead to claim denials (notice how many of them could be avoided by asking the right questions at the start of treatment):

1. Diagnosis issues. One of the biggest issues tripping up therapists is using an out-of-date diagnosis code. To be sure your diagnosis code is correct, visit www.icd10data.com, enter the code (or name of the diagnosis) you plan to use in the search bar, and look for a green diamond next to the diagnosis when the results come up. A red diamond means it is not an active diagnosis, and you’ll need to click on the name of the diagnosis to see if it has been given new code numbers. Remember also that most health plans require more than a Z-code from the DSM-5.
2. Wrong claims address. Always call the plan in advance to check the claims address. Never trust the address on the health plan card, or even the one given by the automated phone service at the health plan, as they are often not the address for mental health claims.
3. The claim was incomplete or illegible. Review claims carefully to be sure you filled out all necessary boxes, and if you submit a handwritten paper claim, work on your clear block printing!
4. Wrong or missing CPT code, POS code, or modifier. You may have used a CPT code for a type of service other than the ones that were authorized, used a code they do not cover, or used an out-of-date code. Or you may have used the wrong Place-of-Service (POS) code. The most common POS codes are 11 for office, 10 for telehealth where the client is at home, and 02 for telehealth where the client is at a location other than home (for a complete list of POS codes, click here). Most health plans also require a modifier for telehealth sessions: Usually 95 (or sometimes GT) for video sessions and 93 for phone sessions, if covered, but check with the health plan.
5. The claim was late. Some plans require in-network claims to be submitted within 60 or 90 days. If your claim is denied for this reason, the plan may not allow you to bill the client. There are many reasons why you could win an appeal even if you submitted late, so don’t give up hope – see my article on this topic here.
6. Incorrect claim form. Most plans require CMS-1500 forms, but some plans (including some EAPs) require their own claim forms.
7. The claim is being held, or “pended,” awaiting more information. Frequently, a claim is pended awaiting information from your client about “Coordination of Benefits (COB).” The insurer wants to find out if the client is covered by another plan. The fastest way to deal with this is usually to have your client call the insurance plan. They may just be able to verbally verify that there is no other coverage or may need to complete a COB form from the insurance plan to attest to this. Another reason a claim may be pended is that the health plan may have requested session notes before paying the claim, which they haven’t received. If you are out-of-network provider, they may also ask for a W-9 from you before paying.
8. The client was not eligible at the time of the session. New employees sometimes have a period of time before their coverage “kicks in.” Or a client’s coverage may have ended, which often happens when they leave a job or switch insurance plans. Or the client may not have paid his/her premium.
9. The claim wasn’t paid because the client has a deductible. Many clients will have a plan with a deductible, which is the amount that the client may have to pay before the insurance plan begins reimbursing.
10. You didn’t call the plan at the start of treatment to check coverage. The single most important thing you can do to prevent claim denials and income loss is to check the client’s coverage before staring treatment. You may find out about deductibles, lack of coverage, needed authorization, that the health plan won’t cover the type of treatment you are providing, or that they have “carved out” their mental health coverage for this client to another health plan. To get my list of 13 questions you should ask when calling the health plan, purchase my book “Navigating the Insurance Maze: The Therapist’s Complete Guide to Working With Insurance – And Whether You Should” (click here).