Beyond the Basics: 8 Questions Every Behavioral Health Organization Should Ask Payers

You understand the value of authenticating your patients’ insurance information and verifying that their coverage is still active. You also appreciate the importance of confirming that their insurance policy includes behavioral health services.

There’s no question that this is vital information to collect. But if your communication with your payers stops here, you may be exposing your behavioral health organization to a host of potential problems when the time comes to submit insurance claims for services rendered.

To avoid these difficulties, Jeanna Boyer, a business development executive with SimiTree Behavioral Health, has identified eight additional questions that behavioral health providers should be asking their payers before patients begin to receive treatment.

1. How does the payer define behavioral health?

Just because a patient has insurance — and just because that insurer says they cover behavioral health — doesn’t mean your organization’s services fall under the scope of their policy. It is extremely important to clarify how, exactly, the payer defines “behavioral health.”

“Even with the parity laws that have been passed, smaller organizations may not offer coverage for both mental health and substance abuse,” Boyer noted.

Failing to determine which types of services are (and are not) covered could leave your organization with a denied claim and your patient with a surprise debt.

2. Is the client’s insurance policy limited to a maximum number of days per level of care?

Some payers limit the number of treatment days that they will pay for. These limits are typically applied to each level of care. For example, an insurance policy may cap residential days at 30, with another 30 days allowable for treatment at the partial hospitalization (PHP) or intensive outpatient (IOP) levels.

These caps may also be applicable to certain types of treatment, such as one limit for mental health services and another limit for substance abuse treatment.

If you exceed any of these caps or limits, even for valid medical reasons, the payer has clear grounds for denying your claim.

3. Does the patient’s insurance policy include medical necessity guidelines or provisions?

You know that you will need to submit documentation when you file your claim. But in some cases, even before your patient begins to receive care, you may have to provide proof that they need the behavioral health treatment that you plan to provide.

A payer’s medical necessity guidelines can extend to level-of-care decisions. For example, the insurance company may agree with you that a prospective patient needs mental health or addiction treatment, but they may not agree that residential care is called for. In such a case, the payer may only agree to fund behavioral health treatment at the PHP or IOP level.


4. Does the payer require prior authorization before changing the level of care?

If a patient is approved for residential care, this doesn’t mean that the payer will automatically also fund step-down outpatient services. Conversely, if a patient struggles in a PHP or IOP, their insurance company may want to review your documentation before they agree to a step up to residential treatment.

“You always want to obtain authorization whenever a patient changes levels,” Boyer said. “You may have to submit additional information before the payer will authorize the change.”

5. Does the payer require referrals for specific behavioral health programs?

Some payers will not authorize patients to receive care in some behavioral health programs or at certain levels of care unless they have been referred by a third-party professional, such as a primary care physician, a psychiatrist, or a psychologist.

“When referrals are required, the professional may have to call the insurance company to register the referral,” Boyer said. “Referrals may be for a specific facility or for a type of programming.”

The insurance company will give the professional a referral number that your organization can include when you submit your claim.

6. Does the insurance policy have a maximum dollar amount?

Total days in treatment for a mental health or addiction concern isn’t the only maximum that you need to be aware of. Many policies also include an annual limit on the amount of money that is available to fund a patient’s behavioral health treatment. Knowing this number ahead of time can prevent your organization from billing for services that the insurance company will not pay for.

7. Does your facility need to have a certain accreditation?

Some insurance providers will only fund mental health or addiction treatment at facilities that possess certain certifications or accreditations. In most cases, this means that your facility must have been accredited through the Commission on Accreditation of Rehabilitation Facilities (CARF) or the Joint Commission on Accreditation of Healthcare Organizations (JCAHCO).

8. Does the payer have a behavioral health carve-out?

Behavioral healthcare has long been viewed as a niche specialty within the medical insurance industry. As a result of this status, many insurance companies have traditionally created what are referred to as carve-outs for these services.

A carve-out means that the company has contracted with another payer to handle behavioral healthcare claims.

Patients are often not aware of carve-outs, and such arrangements may not be obvious during a cursory review of their coverage. If your organization isn’t aware that a patient’s insurance policy includes a behavioral health carve-out, you may initially submit your claim to the wrong company, which can delay or otherwise complicate the payment process.

How Can SimiTree Behavioral Health Help?

Asking the right insurance-related questions is just one facet of effectively managing your behavioral health organization’s revenue cycle. SimiTree Behavioral Health offers customized guidance to help your organization maximize the quality of your payer relationships and ensure that you will be paid for the services you provide.

Contact us today to discover how we can help your behavioral health organization reduce claim denials, capture more revenue, and, ultimately, help more people find lasting recovery!