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How Does Insurance Billing for Mental Health Services Work?

As a consumer, it is important to have an understanding of how the services you are receiving are being paid for. In the United States, insurance companies, Medicaid, and Medicare programs strive to assist those in need of mental health services to gain access to these services where they would typically be unavailable due to high costs.

In order to achieve increased access and coverage of services, insurance companies and similar programs establish contracts with service providers to create coverage networks. As a result, providers are considered either "in network" or "out of network". From here, insurance companies and similar programs establish set costs they are willing to cover for individuals seeing providers that are in network. Examples of these shared costs include copays, deductibles, and out-of-pocket maximums. For a detailed breakdown of these cost share programs and definition you can read our article on figuring out what costs your insurance will cover.

With this structure in place, providers are in need of submitting claims to your insurance company in order to receive payment for services that are being provided to you. When a provider submits a claim to an insurance provider they are having to provide:

  1. Date of service

  2. Place of service

  3. How much was paid (co-pay, etc.)

  4. How much the total charge was

  5. Who provided the service

Claims are then processed by the insurer by checking if the provider was in or out of network, whether any deductibles or copays apply, whether your insurance coverage was active, or if a prior authorization was needed before the service was provided. Insurers will also identify if the claim falls within any limits your plan may have for coverage such as how long a therapy session is, how many sessions per day or week, or a maximum number of treatments for your coverage year. After evaluating the insurance claim, the insurance company will either pay the claim, deny the claim, reject the claim, or identify it as being under a deductible.