Insurance Billing for Therapists: How It Works and How We Help

For solo therapists, counselors, psychologists and group practice owners who take insurance

Taking insurance can fill a caseload, but it also adds a second job: getting paid. Each session has to be verified, coded, submitted, tracked, posted and, when something goes wrong, followed up. This page explains how insurance billing for therapy works from start to finish, where it usually breaks down, and how MedBill Solutions can take it off your plate.

How therapy insurance billing works, step by step

1. Credentialing and payer enrollment

Before you can bill a plan as an in-network provider, each clinician must be credentialed and contracted with that payer, and linked to the correct group tax ID and NPI. Claims for a clinician whose enrollment isn't complete may be denied or processed out of network.

2. Eligibility and benefits verification

Before the first session, confirm that the client's coverage is active and that outpatient behavioral health is covered. Check the copay, coinsurance, deductible, any visit limits and whether prior authorization is required. Some plans carve out behavioral health to a separate administrator, so the claim goes to a different payer than the one named on the card.

3. Documentation and coding

Psychotherapy is billed mainly with CPT codes such as:

• 90791: psychiatric diagnostic evaluation (intake)
• 90832, 90834, 90837: individual psychotherapy, chosen by time spent with the client
• 90846, 90847: family psychotherapy without or with the client present
• 90853: group psychotherapy
• 90839, 90840: psychotherapy for crisis

Each claim also needs a supported ICD-10-CM diagnosis code, the right place of service and, for telehealth, the modifier the payer requires. Your notes need to support the code billed, including session start and end times for time-based codes.

4. Claim submission

Claims go to the payer, usually through a clearinghouse, on the CMS-1500 format (electronic 837P). Clearinghouse rejections, such as a wrong member ID or a missing NPI, mean the claim never reached the payer, so they need to be fixed quickly.

5. Payment posting and reconciliation

When the payer processes the claim, the electronic remittance (ERA/835) shows what was paid, what was adjusted and what is the client's responsibility. Posting it accurately is the only way to know what is really outstanding.

6. Denial and payer follow-up

Denied, underpaid and unanswered claims need someone to investigate, correct, resubmit or appeal within the payer's deadlines. This is the step most practices fall behind on. See our guide to behavioral health denial management.

7. Patient balances and reporting

After insurance pays, any copay, coinsurance or deductible balance is billed to the client. A monthly report should show what was billed, paid, denied and still outstanding, by payer.

Where therapy billing usually goes wrong

• Coverage changes nobody caught. Clients switch plans at open enrollment or when they change jobs.
• Authorizations that ran out. Visits beyond the approved number or date range are denied.
• New clinicians billing before enrollment is complete.
• Time-based code mismatches. The code billed doesn't match the documented session time.
• Telehealth rules that vary by payer. Place of service and modifier requirements differ between plans.
• No one owning follow-up. Claims with no response sit in A/R until they pass the timely filing limit.

Doing it yourself vs outsourcing

Many solo clinicians start out billing themselves, and that can work while the caseload is small. It gets harder as you add clinicians and payers, or when the person doing billing is also running the front desk. Signs it may be time to get help:

• A/R older than 60 or 90 days keeps growing
• You don't know your denial rate or which payer is slowest
• Billing work happens in the evenings or at weekends
• Claims are being written off because nobody had time to appeal

Our guide on whether a small group practice should outsource billing covers the trade-offs in more detail.

How MedBill Solutions helps

MedBill Solutions LLC provides insurance billing for therapy and behavioral health practices across the United States. We work inside your existing EHR or billing system, such as SimplePractice, TherapyNotes, Tebra or another platform, with access you grant.

• Claims submission and tracking, including clearinghouse rejections
• Denial and payer follow-up, with corrections, resubmissions and appeals
• Payment posting from ERAs and EOBs
• Plain-English monthly reporting
• Old unpaid claims clean-up: we'll work your old unpaid claims and you only pay 3% of what we recover

Pricing starts at 3% of what we collect for you. We sign a Business Associate Agreement (BAA) before we see any patient information, and we reply within one business day.