The link between revenue cycle management and mental health patients’ well-being

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With one in five adults reporting anxiety and depression, the United States is experiencing a mental health crisis. While awareness of and demand for mental health services are growing, barriers to care persist — including the financial strain of receiving care, insurance complexities, and physicians and other clinicians’ administrative challenges. Discussions sometimes focus on provider shortages and coverage gaps, but one critical factor affecting patients’ well-being is often overlooked: revenue cycle management.

When billing processes are inefficient, patients and physicians both suffer. Unexpected costs, denied claims and administrative burdens create frustration that can discourage patients from seeking care. Meanwhile, physicians spend valuable time and resources navigating payment issues when that time would be better utilized focusing on delivering patient care. Addressing common revenue cycle challenges can improve financial stability for mental health practices and create a better experience for patients and physicians.

Behavioral health’s integration with primary care

Karly Rowe, MBA
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Collaboration with mental health specialists allows primary care providers to ensure patients receive appropriate care and connect with psychologists, psychiatrists or therapists based on individual needs and preferences.

Primary care providers might follow the Collaborative Care Management (CoCM) model, a nationally recognized evidence-based model of care that specializes in the management of specific behavioral health populations in the primary care setting. This integrated care model enables behavioral health clinicians to work closely with primary care providers to treat a variety of mild to moderate behavioral health conditions.

Billed monthly as a medical benefit under their primary care provider, Current Procedural Terminology codes for Collaborative Care include initial psychiatric collaborative care management, a patient’s visits with their mental health provider and time spent coordinating care. Payments for CoCM go entirely to the primary care physician, so it’s critical for them to effectively coordinate with mental health providers to ensure that everyone is reimbursed accordingly.

As coordination between primary care and mental health providers increases, it’s essential that billing and reimbursement processes run smoothly. Doing so supports financial stability for both teams and helps prevent unnecessary burdens on patients. Primary care physicians should also understand the billing challenges mental health providers face — not only because these issues may impact their own revenue cycle but because awareness can strengthen collaboration, enhance care delivery and improve patient access to needed services.

Five billing challenges impacting mental health practices

Here are five common challenges faced throughout the revenue cycle process that lead to delays and denials:

1. Eligibility errors and insurance confusion

A frequent cause of denied claims is inaccurate eligibility information. Unlike general medical coverage, mental health benefits are often carved out to a separate payer. A patient may present an insurance card from one health plan only to find out later that their behavioral health coverage is managed elsewhere.

For patients, this can lead to unexpected bills at a time when financial stress may already be a concern. For physicians and other clinicians, submitting claims to the wrong payer results in payment delays and extra administrative work. Automated, real-time eligibility verification ensures claims are submitted correctly the first time, reducing disruptions to care.

2. Inaccurate patient information and claim rejections

More than three-quarters of health care professionals say that claims denials are a challenge within their organization. One of the top reasons for claims denials is that the patient’s name, address or insurance information does not match what’s on file with the payer. Even small discrepancies, such as a misspelled name or incorrect insurance ID, can result in rejections. Those seeking mental health care may also have multiple insurance cards, increasing the likelihood of errors.

For patients, denied claims can translate into unexpected out-of-pocket costs or delayed treatment. For physicians and other clinicians, fixing these issues means resubmitting claims and waiting longer for reimbursement. Batch eligibility checks and automated claims edits help practices validate patient details before submission, minimizing rejections.

3. Repetitive errors lead to administrative overload

When billing staff follow the same workflows, undetected frequent errors can lead to systemic claims denials across multiple patients. For example, a misunderstanding of payer billing rules could result in coding mistakes that impact dozens of claims.

This creates uncertainty for patients on how much their care will actually cost and whether they can afford ongoing treatment. Meanwhile, physicians and other clinicians are left to face a constant backlog, delayed payments and additional costs. Implementing automated claim checks and tracking error patterns can help prevent repeated mistakes, reducing both administrative burden and patient frustration.

4. Ever-changing payer rules and coverage policies

Mental health reimbursement policies change frequently — sometimes weekly or even daily. Medicaid and Medicare guidelines, private payer policies and telehealth coverage rules are constantly evolving, making it potentially difficult to navigate payer requirements.

For small practices with limited billing resources, staying compliant can be overwhelming. When claims are submitted with outdated codes, reimbursement is delayed and patients may face unexpected coverage denials. Using updated coding databases and payer compliance tools ensures claims meet current requirements, reducing the risk of denials.

5. The cost of reworking denied claims

Every denied claim costs a practice between $25 and $45 to resubmit. These costs add up and can strain practice finances, ultimately limiting resources for patient care.

Denied claims also contribute to longer wait times for appointments and reduced physician availability. In the U.S., there are an estimated 340 patients per mental health provider, with more than half of the population living in an area with a shortage of mental health professionals. When administrative teams spend time fixing claims, fewer resources are available to support patient needs.

Denied claims can also leave patients confused, frustrated and anxious about their bills, only adding to existing financial concerns, which are a major barrier to mental health care, as one in four adults with frequent mental distress report avoiding medical care due to cost.

Improving first-pass claim acceptance rates allows mental health physicians and other clinicians to focus on delivering care rather than chasing payments and alleviates unnecessary anxiety and stress for the patients.

A stronger billing process supports patient well-being

For mental health physicians, an efficient revenue cycle enables both financial stability and a positive patient experience. When claims are submitted correctly the first time, patients face fewer billing surprises and physicians spend less time on administrative tasks.

Better processes and the right technology make a world of difference for health care providers.

By implementing automation and best practices in claims management, both primary care and mental health practices can minimize denials, improve reimbursement efficiency and ensure a more transparent billing process. Overcoming these revenue cycle challenges improves more than just financial outcomes — it helps ensure that people receive uninterrupted, high-quality mental health care.

Karly Rowe, MBA, is president of the provider business unit at Inovalon, where she oversees a diversified portfolio of revenue cycle management, care quality management and workforce management solutions. Leveraging a diverse background across credit, retail and health care, she is responsible for leveraging Inovalon’s data to deliver innovative solutions to the provider market.