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A Guide to Understanding Insurance Reimbursement Rates for Mental Health

Insurance reimbursement refers to the payment that a mental health provider receives for delivering services to a client or patient. Reimbursement rates, and getting to the point where the payment is actually in hand, is a complicated necessity to the field overall. For providers who accept insurance, understanding insurance reimbursement rates is vital to billing effectively and optimizing income.


A large component of billing to insurance companies for reimbursement is joining their provider panel. This is referred to as the credentialing process and involves a mental health clinician applying to join a payer panel. On an insurance panel, providers are included on a list of approved providers that the client is eligible to receive services from. While not every payer requires that a provider is on their panel to partially cover the cost of services, coverage is often better for clients who seek services from one that is.

The best option for mental health professionals wishing to get the most out of each reimbursement is to join the provider panels of the most popular insurance companies in their geographical area.

Mental Health Benefits and the ACA

Under the Affordable Care Act (ACA), clients enrolled in Medicaid or Medicare have access to a number of mental health services. The insurance reimbursement rates under these mental health plans are very specific and require providers to follow strict guidelines.


Medicaid is a government program that offers individuals in low-income brackets access to affordable health coverage. All Medicaid programs are required to cover specific mental and behavioral health services.

When it comes to Medicaid insurance reimbursement rates for mental health, there are a few influencing factors that decide exactly how much a provider is going to get paid. Rates are set according to the level of experience of each provider or different “practitioner levels.” The higher level a mental health provider is at, the higher their reimbursement. Reimbursements are also varied at the state level.


While Medicaid is a state-delivered insurance program, Medicare is a federal program administered by CMS. Individuals over the age of 65 or who are disabled can qualify for this coverage. Medicare covers a wide range of mental and behavioral health services.

Medicare reimbursements are typically lower than that of private payers and are set by a regularly updated fee schedule decided by CMS.

Private Payers and Reimbursement Rates

Outside of government programs exist private insurance companies. These are the insurance providers that clients typically get from their employer or individual participation when they do not qualify for government programs.  There are currently over 900 private health insurance companies in the United States with some of the biggest names being Anthem, Humana, United Healthcare, and more. For each payer, there are different reimbursement rates for mental health, fee schedules, and requirement that providers must adhere to in order to get the maximum amount.

How Mental Health Providers Get Paid by Insurance Companies

If a provider is credentialed and on a specific payer’s provider panel, then the way to get paid is to file a claim for services. Once services are rendered to the client, for example, a single session of psychotherapy that lasted 1 hour, then the provider documents the details of that visit. For each service, there is a corresponding billing code referred to as a CPT code. Providers file a claim either by mail or electronically with the corresponding documentation and CPT code and submit it to the payer for reimbursement. Ideally, providers would document and code accurately the first time, submit the claim, and be reimbursed by the payer in a timely fashion. This is not always the case.

For a number of reasons like errors in client information, lack of coverage, or errors in the billing process, providers can encounter denials and rejection for their claims, delaying or preventing reimbursement at all. For this reason, providers need to take every step and precaution to optimize their reimbursement rates for mental health.

How to Optimize Reimbursements

Increase Clean Claims

Clean claims are claims that are submitted accurately and approved by the payer after the first submission. Providers can increase clean claims through the use of automated billing software that identifies errors and increases accuracy.

Follow Up Effectively

If a claim is rejected for some reason, then providers need a quality follow-up procedure in place that adheres to each payer’s billing cycle. Effective follow-up can make sure you still get paid the maximum amount for your hard work. Providers can improve their follow-up procedures through software or managed billing services that help them track payer schedules.

Track Billing Cycles

Adhering to the billing schedule of each payer is essential to optimizing reimbursements.

Document Effectively

Accurate and effective documentation is equally critical to receiving the maximum insurance reimbursement for mental health. Quality documenting tools can ensure that all of the information is accurate and complete before a claim is filed.

Providers who hope to optimize and increase their insurance reimbursement rates for mental health need a firm understanding of the process as well as quality tools that help them along the way.

To learn more about an EHR that can help you streamline and organize your practice management, click here.

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