Category: Insurance Billing

Get Quicker Access to Payments from UHC/OPTUM… Is this true?

Is this true from UHC?

To speed up payments to your practice, UnitedHealthcare is phasing out paper checks and moving to digital transactions, where not prohibited by law.

You’ll need to choose between two options for receiving payment from UnitedHealthcare – ACH/direct deposit or virtual card payments. Both of these are facilitated by Optum Pay on behalf of UnitedHealthcare.

If your practice/health care organization is already enrolled and receiving claim payments through ACH/direct deposit, there is no action you need to take.

The California Medical Association (CMA) has learned that UnitedHealthcare (UHC direct pay issue) is in the process of discontinuing physician payments via paper checks and will instead require both contracted and non-contracted physicians to receive payment via automated clearinghouse (ACH)/direct deposit or through virtual credit card payments.

The change, first communicated in UHC’s March 2020 Network Bulletin, was originally planned to be rolled out in phases beginning in mid-2020. Due to the COVID-19 pandemic, the rollout of the program was delayed.

UHC has since announced in its August 2020 Network Bulletin that the program will move forward with a phased rollout beginning with its commercial line of business starting in August 2020.  UHC Medicare Advantage and Community and State (Medicaid) Plans will follow with rollouts slated for fall 2020 and early 2021.  

UHC will be publicizing the change to both contracted and noncontracted physicians, who will be directed to sign up for ACH/direct deposit through Optum Pay or via the website. Physicians who do not elect to sign up for ACH/direct deposit will automatically be signed up to receive virtual credit card payments in place of paper checks. 

Physicians with questions or concerns, or that need to request a hardship exemption from this policy, should contact their UHC Provider Service Advocate or UHC at (877) 842-3210 for more information.

What is a virtual credit card?

With the virtual credit card (VCC) payment method, payors send credit card payment information and instructions to physicians, who process the payments using standard credit card technology.

This method is beneficial to payors, but costly for physicians. Health plans often receive cash-back incentives from credit card companies for VCC transactions. Meanwhile, VCC payments are subject to transaction and interchange fees, which are borne by the physician practice and can run as high as 5%per transaction for physician practices. Physicians can avoid these interchange fees by enrolling in ACH/direct deposit.

What to do on the UHC direct pay issue?

This all depends on the business set up and values of your institution. This can cause major problems for some programs and be slightly beneficial to others. Below is an exert from the specialty benefits form for UHC:

“I authorize UnitedHealthcare Specialty Benefits to direct the net amount of my benefit payment to be deposited directly by electronic funds transfer and credited to my account as indicated at the financial institution designated below. If any payments made are dated after the date of my death, I hereby authorize and direct the said financial institution on my behalf and on behalf of my executors or administrators to refund any such payments to UnitedHealthcare Specialty Benefits and to charge the same to my account.”

The form does not have all the disclaimers that could possibly affect your group/facility or your providers.

Claims Department
Direct Deposit Agreement
For Payment of Benefit to Financial Institution

Here is what UHC says the benefits are for ACH

Automated Clearing House (ACH) /direct deposit

  • We recommend ACH because it’s the quickest form of payment available and there are no fees for the service. 
  • Payments can be routed by both the tax ID number (TIN) and National Provider Identifier (NPI) number level.
  • Enrollment generally takes less than 10 minutes. You will need to provide your current bank account information.
  • Funds are deposited directly in to your bank account – there are no paper checks or remittance information to lose or misplace.

Here is what UHC says the benefits are for Virtual Card Payment (VCP)

  • If you don’t enroll in ACH, in most instances you’ll receive a virtual card payment from Optum Pay. VCPs are electronic payments that use credit card technology to process claim payments. There is no requirement to share bank account information.
  • A 16‐digit, single-use virtual card will be issuedopen_in_new for payment (single or multiple claims). You’ll receive a VCP in the mail; for quicker access, you can view the VCP statement in Document Library.
  • Each VCP is issued for the full amount of the claim payment. However, VCPs are subject to additional terms and conditions, including fees, between you and your card service processor.
  • You can enroll in ACH even after receiving a VCP. However, ACH will only apply to future payments and can’t be applied to previous payments.

We can help navigate if this is something that would benefit any behavioral health institution

Find out how insurance billing works for RTC, PHP, IOP substance abuse and mental health.

Insurance Billing 101

What is a clearinghouse?

A clearinghouse is connected to various insurance companies.  Our software sends claims to the clearinghouse where they are basically checked (scrubbed).  If the claim passes the scrub it is then forwarded to the insurance company or another clearinghouse if our clearinghouse is not connected to the insurance company.  (this has to do with security) The insurance company will do 1 of 2 options accept or reject.  If accepted the claim will process and return to the clearinghouse with an ERA which will come back to Practice Suite.  There are a few exceptions to ERA’s coming back the biggest one BCBS you will probably not see an ERA from them.

The clearinghouse we use with Practice Suite  is RelayHealth.  They have been bought by Emdeon and they are now known as Change Healthcare.  Relay uses a 4 digit CPID NOT a 5 digit payer ID. Even though they are Change they still use the existing Relay structure.

We also use Office Ally and Availity.

Availity is BCBS preferred clearinghouse.

What is a payer ID? CPID (Claim Payer IDentification)?

A payer ID is a routing number, or address. Tells the clearinghouse where to send the claim like a bank sends a check. Emdeon uses 5 digit Payer Id the most common. This is the # that most insurances will give as their payor id. RelayHealth made their own CPID for their system. This is a 4 digit number. 

So basically if you put in a 5 digit payer ID in the insurance set up instead of the 4 digit CPID the claim will not go anywhere.  It is like trying to cash a check from a bank at a credit union.  

Relay has two types of  CPID’s for Institutional claims (UB04) and different CPID’s for professional claims HCFA/CMS 1500.  Relay has a conversion search engine within their portal to translate payor id to CPID.

What is a UB04?

This is an institutional claim form. (used for facilities our most common claim right now)

The UB-04 form is a form that any institutional provider can use for the billing of medical and  mental health claims. The UB-04 uniform billing form is on white standard paper with red ink, which is used by institutional providers for claim billing.

What is a HCFA 1500 (hick fa)? CMS 1500?

This is a professional claim (used for providers, for Florida’s weirdness and UHC IOP and ROP claims).

What is the Healthcare Financing Administration (HCFA) form in Medical Billing

… The HCFA is paper form, also known as the CMS-1500 form, and the Professional Paper Claim Form, is used for reimbursement from various government insurance plans including Medicare, Medicaid and Tricare.

What is an ERA?

This is an Electronic Remittance Advice. Also known as a Remit or Remittance. It is the electronic form of the Explanation of Benefits (EOB) this tells us how the claim processed.

What is a Revenue Code?

 The revenue code tells an insurance company where the procedure was performed.

What is a HCPCS / CPT Code (Hick Picks)?

The Healthcare Common Procedure Coding System (HCPCS, often pronounced by its acronym as “hick picks”) is a set of health care procedure codes based on the American Medical Association’s Current Procedural Terminology (CPT).

What is the difference between HCPCS and CPT?

HCPCS has its own coding guidelines and works hand in hand with CPT. HCPCS includes three separate levels of codes: Level I codes consist of the AMA’s CPT codes and is numeric. Level II codes are the HCPCS alphanumeric code set and primarily include non-physician products, supplies, and procedures not included in CPT.

What is a Type of Bill?

This four-digit alphanumeric code provides three specific pieces of information after a leading zero. CMS ignores the leading zero. This three-digit alphanumeric code gives three specific pieces of information.

  • First Digit = Leading zero. Ignored by CMS
  • Second Digit = Type of facility
  • Third Digit = Type of care
  • Fourth Digit = Sequence of this bill in this episode of care. Referred to as a “frequency” code

What does ICD 10 CM stand for?

The International Classification of Diseases, Tenth Revision, Clinical Modification (ICD10CM) is a system used by physicians and other healthcare providers to classify and code all diagnoses, symptoms and procedures recorded in conjunction with hospital care in the United States.

What is a Revenue Code? Revenue codes tell insurance companies the type of services patients received, the types of supplies used and the department in which services were rendered. For example, a charge for an emergency room visit for urgent care would carry revenue code 0456.

What is ROI?

Release of information (ROI) in healthcare is critical to the quality of the continuity of care provided to the patient. It also plays an important role in billing, reporting, research, and other functions. Many laws and regulations govern how, when, what, and to whom protected health information is released.

How long is an authorization to release information good for?

an expiration date or an expiration event that relates to the individual or the purpose of the use or disclosure. HIPAA does not impose any specific time limit on authorizations. For example, an authorization could state that it is good for 30 days, 90 days or even for 2 years.

What is HIPAA?

HIPAA (Health Insurance Portability and Accountability Act of 1996) is United States legislation that provides data privacy and security provisions for safeguarding medical information.

What kind of personally identifiable health information is protected by HIPAA Privacy Rule?

The Privacy Rule protects all “individually identifiable health information” held or transmitted by a covered entity or its business associate, in any form or media, whether electronic, paper, or oral. The Privacy Rule calls this information “protected health information (PHI).”

What is considered personal health information?

Protected health information (PHI), also referred to as personal health information, generally refers to demographic information, medical histories, test and laboratory results, mental health conditions, insurance information, and other data that a healthcare professional collects to identify an individual and ..

What is the difference between PII and PHI?

HIPAA uses the term Protected Health Information (PHI) to refer to protected data, but the concept is very similar to the term Personally Identifiable Information (PII), which is used in other compliance regimes. … PHI includes anything used in a medical context that can identify patients, such as: Name.

What penalties can occur by violating HIPAA?

What is the penalty for a HIPAA violation? HIPAA violations are expensive. The penalties for noncompliance are based on the level of negligence and can range from $100 to $50,000 per violation (or per record), with a maximum penalty of $1.5 million per year for violations of an identical provision.

Can you go to jail for HIPAA violation?

Like the HIPAA civil penalties, there are different levels of severity for criminal violations. The minimum penalty is $50,000 and up to one year in jail. Violations committed under false pretenses require a penalty of $100,000 and up to five years in prison.

How can HIPAA violations be prevented?

7 Ways Employees Can Help Prevent HIPAA Violations

  1. Be educated and continually informed. …
  2. Maintain possession of mobile devices. …
  3. Enable encryptions and firewalls. …
  4. Double check that files are correctly stored. …
  5. Properly dispose of paper files. …
  6. Keep anything with patient information out of the public’s eye. …
  7. Use social media wisely.

Definition of demographics: Specific demographic factors which identify and distinguish.

We use several types of demographics:

  1. Facility 
  2. Clinical / Medical Director
  3. Patient
  4. Policy holder (can be same as patient)
  5. Insurance company

Comprehensive and accurate mental health coding is vital as behavioral and mental health claims are on the rise.

We frequently find ourselves progressively adapting to learn nuances with each insurer differently to avoid claim delays or denials. Making improvements accordingly helps make the overall patient experience a lot smoother for the facility’s care team, the engagement with the insurer, and of course the patient’s family.

Nowadays, entities like behavioral health facilities are far more prone to denials and payer audits more than any other medical coverage a patient may have. This puts mental health services at risk as the insurers concentrate on the coding accuracy and things like the duration of services rendered.

The insurance carriers are all about its utilization. They perform plenty of data mining, so all mental health providers regardless what profession they are like psychotherapist, licensed clinical social worker, physician, licensed mental health counselor, or non-physician practitioner, all require that documentation be accurate to avoid delay or denial of claims.

What are CPT codes?

For those who are reading this and not familiar with how claims are paid, they all start with a medical code that can be billable to the insurance carriers.

CPT (Current Procedural Terminology) codes are extremely important and are used for payment for services, especially when it is to be reimbursed by the insurance companies. The American Medical Association developed the CPT codes and assigned from surgical to diagnostic codes for medical providers to use for their patients.

What type of documentation do insurance carriers want to see from providers to avoid any scrutiny?

  • Patient’s diagnosis. This is critical as the insurance carriers use this information to determine if therapy is medically necessary and if the specific therapy type is warranted. For instance, insurers may question the validity of therapy sessions provided to a patient with a neurological or cognitive deficit or a chronic brain injury when a drug intervention may be more appropriate.
  • Therapy type. Physicians likely provide supportive therapy while other mental health providers may provide an array of options, for example, cognitive behavioral therapy, psychoanalysis, or insight-oriented therapy. This is important when initially verifying coverage and benefits, and specifying therapy type, facility, etc… to ensure it will be a billable service provided.
  • Therapy goals: What treatment plans are set in place for the patient, short and long term?
  • Progress reports: Is the therapy being provided benefiting the patient?
  • Duration of sessions: What is the therapy start and stop times, to the exact minute.

How to know what psychotherapy codes to use?

As of 2013, CPT codes distinguishes between physician and non-physician providers performing psychotherapy services. Physician and Non-physician providers doing psychotherapy services use CPT codes such as 90832, 90836, or 90837, but all are based on the duration of the session. Aside from coding these services accurately, they should always be accompanied with documentation supporting the time spent providing the psychotherapy service.

help with insurance billing for drug rehab

Coding tips when billing for mental health services.

  • Clearly document the time spent and benefits of the psychotherapy. The carriers want to see that a physician billing for psychotherapy is actually doing a therapeutic intervention. Spending extra time talking with the patient does not translate to a billable psychotherapy service. Generally, insurance carriers are worried about over-use of psychotherapy services, particularly if it appears the patient gets no benefit or shows no progress. If in some cases the patient is resistant to psychotherapy interventions or is not taking sessions to heart, it’s not going to benefit them.
  • Documentation justifies any sessions extending beyond 45 minutes. The carriers want to see and know why time extension was necessary. Without proper supporting documents, claims may receive lower reimbursement or even denial.
  • Use group therapy (CPT code 90853), when appropriate. Group therapy is great for patients because they can meet and talk with others with similar problems and usually looked at as very beneficial. Carriers may also consider patients who go through bereavement counseling during a public tragedy or for a court-ordered group setting counseling session for whatever reason valid to use this code.

Documents that are compliant and accurate coding helps providers in avoiding delays and denials. Staying up to date with best practices seems to be a never-ending task, however,  we are glad we could share some insight with you about the significance of correctly utilizing CPT codes when billing for mental health services.

Here’s what the Supreme Court’s ACA Ruling Means for Addiction Treatment Centers

information on insurance billing for mental health and addiction

On 17th June 2021, the Supreme Court ruled in favor of the Affordable Care Act (ACA), dismissing the challenge that the ACA is unconstitutional.

Since it was signed into law, the ACA, widely known as the health reform law or Obamacare, has allowed nearly 31 million Americans to access healthcare coverage.

Besides banning insurers from basing health coverage on people’s pre-existing conditions, the law prohibited insurance providers from imposing lifetime or annual caps on benefits while also placing limits on yearly out-of-pocket spending.

One of the greatly felt impacts brought about by Obamacare is the comprehensive healthcare plans, which allows people with mental health conditions and substance abuse disorders to access healthcare coverage just like other people.

Over the last four years, some changes have been made to the health care reform law, but the new administration is now reversing some of them.

To help you understand the impact that the Supreme Court ruling has on addiction treatment centers, I’ve covered everything from ACA’s impact on substance abuse to billing and reimbursement requirements for addiction treatment centers.

Supreme Court Ruling on ACA.

Knowing that their policies will cover the need for this higher level of care and future care is critical for all who need mental health services. Taking away any stigma with any mental health disease is important knowing that some if not all of the cost can be shared by the insurance policy they pay for monthly.

As well as knowing the fact the SCOTUS has upheld Obamacare time and time again shows how important the issue is and will be going into the future for more families and individuals who suffer from the mental health dilema day in and day out

Additionally, we shall see the potential impact this ruling has on the demand for treatment of behavioral health conditions and whether or not it will influence reimbursement rates for behavioral health.

This is the 3rd and 4th attempt to strike down the law which provides coverage for this dire need of insurance coverage for many of the millions of Americans who are stricken with mental health issues.

As time goes on the insurance industry will adapt and find a usual and customary reimbursement rate for providers and insurance policy holders alike but know that this mandated coverage has been deemed worthy and constitutional by the supreme court of law.

Earlier Changes Made to ACA

Since its implementation in March 2010, The Affordable Care Act had survived two earlier Supreme Court challenges. However, the law has also seen several changes during the last administration. Below is an overview of some of the biggest amendments made.

Elimination of the Individual Mandate

When ACA was passed into law, all US residents were required to have health insurance or pay a given penalty. This mandate was designed to have everyone, including the more healthy people to enter the health insurance market. Similarly, it helped keep the ACA premium policies low. A 2017 tax overhaul legislation reduced the penalty for not having a health plan to $0. In December 2018, following the tax overhaul, a Texas federal judge ruled that the $ 0 penalty, by law, is no longer a tax, but a command, hence declaring the whole ACA unconstitutional. The case then moved to Supreme Court, and a ruling was made in favor of the ACA on 17th June 2021.

Work Requirements Added to Medicaid

After the ACA Medicaid expansion was adopted, the federal government required states to have Medicaid beneficiaries prove that they either go to school or work. This change was highly politicized, and hundreds of thousands of Americans, including those with substance abuse disorders, were expected to lose their healthcare coverage.

The Ending of Cost-Sharing Reduction Subsidies to Insurance Providers

In 2017, the federal government stopped paying subsidies to insurers, which was seen as a critical element in motivating these companies to keep premiums down. This change disproportionately affected individuals and families who are not eligible for subsidies.

Expansion of Short-Term Plans

Under the initial ACA, short-term insurance that didn’t provide essential benefits was limited to not more than three months. However, in 2019, the federal government extended this duration to 364 days with the option to renew for three years. Since these health care plans are non-comprehensive, they do not fully protect individuals in severe health conditions.

Slashed Budgets for Sign-Ups

Initially, the ACA had navigator programs with allocated budgets to help drive the healthcare sign-up campaigns. In 2017, these budgets were slashed, and the net impact was slowed and depressed enrollment. In the following year, the uninsured rates for US residents rose to 8.5% or 27.5 million people (the highest since the ACA went into effect) not having any healthcare plan at any point in 2018. This translated to more people, including those with pre-existing conditions not accessing medical care.

The Impact That ACA Has on Substance Abuse Treatment

The Affordable Care Act made it possible for people with pre-existing conditions such as drug and alcohol addiction to be accepted by insurance providers. At the same time, the 2008 Mental Health Parity and Addiction Equity Act (MHPAEA) mandated all insurers to offer the same level of coverage for substance abuse and mental health treatment as for regular medical care.

Now that the Supreme Court has spared ACA, patients receiving alcohol and drug recovery treatments have been relieved of the stress of covering all the rehab costs. Moving forward, rehab patients will continue to benefit from the covered rehab expenses. That said, here are the four ways ACA will continue to keep inpatient and outpatient rehab treatment costs affordable.

  • Drug and Alcohol Addiction Treatment Remains a Priority: The ACA considers substance abuse disorders as one of the ten elements of essential health benefits. That means Medicaid and other forms of healthcare coverage sold via Health insurance Exchanges should cover services for substance abuse. 
  • Greater Access to Healthcare: More people will continue to sign up and access medical coverage through the expansion of Medicaid and other low-cost insurance plans. Similarly, states accepting federal aid allocated by the ACA will expand Medicaid coverage to individuals and families living below and slightly above the pre-determined federal poverty line.
  • Young Adults Will Remain on Parent’s Health Plan: Individuals up to the age of 26 will continue to receive coverage under their parent’s health insurance coverage. According to a SAMHSA survey, nearly 7% of young adults in the US between 18 and 25 have a substance disorder. By extrapolation, more young adults will continue to benefit from covered rehab expenses under the ACA.
  • Free Screenings and Referrals: If the ACA were ruled unconstitutional, patients with Medicare, Medicaid, or plans under the Health Insurance Marketplaces would have been charged for mental health and alcohol screenings. Now that the law is intact, these services come with no cost for insured individuals.

Billing and Reimbursement for Behavioral Health Service Providers

Now that you know everything about the Affordable Care Act, from the changes made to what to expect moving forward, let’s look at the other side of the ACA – i.e., what it takes for behavioral health service providers to be reimbursed by insurance companies.

Typically, there are four service categories that insurers may consider for reimbursements. These include:

Hospital-Based and Residential Inpatient Care

Hospital-based care and residential programs, widely known as RTC, are acute and sub-acute recovery centers offering nursing care, medical monitoring, and behavioral-health services 24/7. Services provided by these programs are reimbursed on a standardized per-diem basis. Here, the per-diem rate includes all services offered in the program from the accommodation, lab fee, therapies, services of licensed professionals and counselors, dietitians, psychiatric nurses, etc.

Partial Hospital Programs (PHP)

Here, services are offered in an ambulatory setting and require a minimum of 20 hours per week. Billing is done per diem basis, and reimbursement is made on the lesser charges, including services from social workers, addiction counselors, occupational therapists, addiction counselors, etc.

Intensive Outpatient Programs (IOP)

These programs provide patients with behavioral health services for 9 to 19 hours per week for adults and at least 6 hours for children and adolescents. Billing for IOP is cumbersome compared to hospital-based and inpatient programs; hence, it’s challenging to get reimbursement.

Services offered by IOP include family, group, and individual psychotherapy, medical monitoring, and psycho-education. To be eligible for reimbursement, IOP providers must:

  • Supervise the patient at all times.
  • Adhere and be consistent with the initial treatment plan
  • Address the diagnosis that required admission.
  • Provide enough IOP care to patients for about 12 to 16 weeks.
  • Be consistent with clinical best practices.

Other Key Takeaways

Due to the Supreme Court ruling, enrollment for healthcare plans will probably rise, and more people with substance abuse disorders will be seeking specialized treatments. It’s therefore fair to conclude that to a given extent, the demand for treatment services for behavioral health conditions will increase.

As far as reimbursement is concerned, the current rates are significantly lower than those for other medical and surgical treatments, and this has led to a lower network of behavioral health providers participating in healthcare plans. If this were to be resolved, health plans would need to raise reimbursement rates. But even then, it would be very costly to try and level up with what behavioral health providers charge patients who pay out-of-pocket. And while there are no official plans to raise reimbursements yet, efforts to boost these rates will be highly beneficial.

Last but not least, addiction treatment centers that accept Obamacare, Medicare, and Medicaid plans should prepare to help more patients access quality care. They should also keep up with the CMS billing requirements to ensure compliance and minimize delays of reimbursements which could otherwise hurt service delivery.

Most healthcare facilities treat eating disorders through comprehensive therapeutic programs with an emphasis on continuity of care. PHP and IOP billing for eating disorders can be complicated.

Day treatment programs commonly known as PHPs and IOPs are a popular option because they allow the patient to get sufficient mental and emotional support from a multidisciplinary team of professionals. IOP often involves several hours of treatment, including nutritional counseling, meal support, therapy, and medical supervision.

PHP and IOP Billing pro tips

PHP is another option and is used on patients who do not qualify for inpatient hospitalization but are stable enough to benefit from outpatient treatment. PHP for eating disorders includes weekly sessions with psychiatrists, individual therapy sessions, medical monitoring, nutritional support and planning, guidance on cognitive coping skills and group or family therapy. Insurance billing for eating disorders differs with the type of care.

Insurance Billing for Eating Disorders For PHP

Partial Hospital Programs (PHP) are provided to patients who do not need hospitalization and require the patient to have at least 20 hours of care per week. Some PHP services are provided in ambulatory settings.

PHP billing information

All PHP bills submitted by hospitals should be under one of the four Type of Bill (TOB). Outpatient hospitals, Critical Access Hospitals (CAH), and Community Mental Health Centers (CMHC) have respective codes.

Outpatient can be considered both PHP and IOP

131: admit through discharge

132: interim-first

133: interim-continuing

134: interim-last


851: admit through discharge

852: interim-first

853: interim-continuing

854: interim-last


761: admit through discharge

762: interim-first

763: interim-continuing

764: interim-last

The appropriate healthcare common procedure coding system (HCPCS) code for eating disorders is 90791 or 90792.

Sequential Billing

 Payers require providers to submit PHP claims for continuing treatment in sequence.

  • If the patient completes the treatment in one month, providers should submit bills through TOB codes 131, 851, or 761.
  • If the treatment takes more than one month, the provider should submit claims using TOB codes 132, 852 or 762.
  • If the treatment takes more than two months, the provider should use TOB codes 133, 853 or 763.
  • Providers should use the codes for continuing claims until the last month when they should use TOB 134, 854 or 764.

Tips on PHP and IOP BillingInsurance Billing for PHP and IOP Eating Disorders 

Intensive Outpatient Programs (IOP) is a form of care where adult patients are treated for 9 to 19 hours per week and a minimum of six hours for children. S9480/0905 are the per diem IOP codes for behavioral problems, including eating disorders. This billing code is only used for private payers because Medicare does not recognize it. Further, the following codes can be used if the payer insists:

H2019: therapeutic behavioral services, per 15 minutes

H2020: therapeutic behavioral services per diem

Most payers require pre-authorization for IOP services to qualify for reimbursement. Patients must undergo a minimum o 180 minutes of active therapy to reimburse the provider at the per diem rates. This is why it is very important for providers to have clinical documentation of the full 180-minute session when making IOP bills. Healthcare providers are required to obtain concurrent authorization if they wish to continue treating the patient.

Payers require providers to use the UB-04 claim form specifying the preferred Type of Bill (TOB) and Revenue Codes (RC). The applicable code for eating disorders in TOB 131, RC 0905 and HCPCS code S9480. For Medicaid patients, the provider has to indicate the level of care using a modifier.

Some payers allow independent practitioners to provide IOP services and submit bills using the H2035, which is reimbursed using hourly rates instead of facility rates.

Avoid Duplicate Billing

Healthcare providers should only bill for one type of IOP or PHP service per day even if two or more units or specialists are managing the patient. Submitting duplicate claims often results in denied or delayed reimbursements.

What You Need to Know for PHP Insurance Billing in 2021

A partial Hospitalization Program (day hospitalization) is a structured day program providing several hours of therapy and necessary skill-building groups daily. Participants in a daily PHP routine go back home each night. The program can last for a week or up to six months.

PHP treatment programs closely resemble a highly structured but short-term hospital inpatient program. It’s more intense than psychosocial rehabilitation or outpatient day treatment. We have prepared this article to provide general guidelines for insurance billing for PHP.

Behavioral Health Levels of Care

Behavioral health facilities provide four types of services needed by patients that insurance companies may reimburse. These include:

  1. Hospital-based inpatient programs where patients need medical monitoring, nursing care, or other behavioral health services requiring 24/7 treatment.
  2. Residential treatment programs (RTC) are a form of sub-acute facility-based monitoring that offers other behavioral health services.
  3. Partial hospital programs (PHP) provide services in an ambulatory setting and often require 20 hours per week.
  4. Intensive outpatient programs (IOP) where patients get behavioral health services for nine to 19 hours per week (adults) and at least six hours for children and adolescents.

Insurance Billing for PHP in a Nutshell

PHP services receive insurance reimbursement for an all-inclusive per diem payment, including services used in the program or the lesser charges. It includes all disciplines and services such as therapies, social workers, psychiatric nurses, dieticians, occupational therapists, and licensed addiction counsellors.

Psychologists, psychiatrists, psychiatrist physician assistants, and psychiatric nurse practitioners may bill separately on a CMS-1500 Claim Form if they provide services outside of a treatment program, for example, individual therapy, E&M services, or psychological testing. Additionally, appropriately licensed providers can bill separately for labs or psychiatric diagnostic evaluations.

Providers cannot bill Family or group counseling in addition to PHP.

Instructions for Insurance Billing for PHP

Facilities provide different substance use and psychiatric service levels with various licensure types. Each care level requires specific coding and billing information to determine appropriate reimbursement. Below is the insurance billing for PHP guide on the UB-04 Claim Form.

Psychiatric Services

Facility or Service Type

Bill Type

Revenue Code






Full day





Eating Disorder Program



Substance Use Services

Facility or Service Type

Bill Type

Revenue Code







Billing Limitations and Exclusions

When insurers consider reimbursement, payment determination is subject to the following:

  • Individual or group benefit
  • Provider Participation Agreement
  • Mandated or legislative-required criteria always supersede
  • Routine claim editing logic that includes but not limited to mutually exclusive or incidental logic and medical necessity

If the insurance provider participates based on member benefits, then coinsurance, co-payment and deductible apply.

Does Medicare Cover PHP?

Medicare could cover PHP programs if a Medicare-certified CMHC or a hospital outpatient department provides them. Medicare does not cover psychosocial programs that provide only socialization, vocational rehabilitation, or a structured environment. A program comprised primarily of social, recreational, or diversionary activity does not constitute a PHP.

Patients that meet benefit category requirements for PHP Medicare coverage comprise of two groups:

  • Those discharged from inpatient hospital treatment programs where PHP is in place of a continued inpatient treatment
  • Those who would be at risk of needing inpatient hospitalization in the absence of PHP

Over to You

Reimbursement policies for insurance billing for PHP are intended to establish general guidelines under the specific insurance providers’ plans. Therefore, providers retain the right to review and update reimbursement policy guidelines at their discretion.

We hope this short but informative article was helpful. If you have any queries about insurance billing for PHP and how to maximize your reimbursement, please contact us via email or our contact us website page.

A Closer Look at PHP Billing for Behavioral Health Service Providers

America’s mental health problem has been growing steadily over the past few years. As such, more people require mental health services. If your health facility offers partial hospitalization programs to patients under a psychiatrist’s direction, managing the billing process is among the things you should keep in mind.

It’s best to fully understand the PHP billing process since it will be easier for you to process claims. That said, here’s a closer look at PHP billing for behavioral health service providers and why understanding the billing process ensures timely and accurate reimbursement for the services you offer.

What is Partial Hospitalization for Mental Health or Substance Abuse?

Commonly known as PHP, this structured treatment program primarily targets behavioral health patients. It allows patients to continue residing at home while commuting to the treatment facility for up to seven days every week. It’s an alternative to inpatient behavioral health care and more intense than the treatment patients receive in a therapist’s or doctor’s office.

Medicare and most health insurance policies cover part or most costs related to partial hospitalization services. The covered PHP services include:

  • Individual behavioral training
  • Occupational therapy that’s part of the treatment program
  • Support groups
  • Patients’ training and testing

According to the Affordable Care Act, insurance policies operating out of states that accept federal financial assistance must cover patients’ PHP treatment. However, the companies are allowed to select the forms of treatment to cover.

PHP Billing Requirements

When dealing with PHP billing, it’s best to ensure that all the parties involved get what they want. As a mental health provider, you should get reimbursed on time, while patients ought to continue receiving the treatment they need and deserve.

On their part, insurance companies need to be on board by enabling treatment to continue. There are many modalities when it comes to PHP billing compared to hospital-based and inpatient programs. This makes things challenging when behavioral health service providers try to get reimbursed.

If your facility offers PHP services, it must be licensed both at the federal and state level to treat mental and behavioral health conditions. Besides, the facility should meet these CMS guidelines for it to qualify for reimbursement:

  • The attending mental health provider must supervise patients at all times
  • Patients’ initial treatment plans should be adhered to consistently
  • Your facility should adhere to best practices for behavioral health treatment
  • The expected treatment time should be stipulated

Revenue Codes for PHP Billing

Generally, PHP billing codes differ according to patients’ diagnoses and the purposes of the treatment being offered. For instance, mental health treatment and substance abuse treatment may get billed differently. Besides, you should keep in mind that when treating patients with a dual diagnosis for both mental health and substance abuse issues, you can only bill for one PHP session per day.

Here is a good quick cheat sheet:

#0913 H0035 Mental health partial hospitalization, treatment, less than 24 hours
#0913 S0201 Substance abuse Partial hospitalization services, less than 24 hours, per diem

It’s good practice to provide all the relevant information to the insurance company to ensure that your claims get processed on time. Besides, avoid submitting duplicate claims because the reimbursement will inevitably be denied or delayed.

how to bill for rtc substance abuse

Final Thoughts

If you’re a behavioral health service provider and offer PHP to patients, you should understand the PHP billing process. This will go a long way in maximizing your reimbursement for the behavioral health services you provide.

There is a large debate amongst industry professionals on the ability to allow for PHP billing to be done within a residential setting. There are many variables to this depending on how your program is set up and who the carrier is you are working with.

In and out of network issues come into play as well as some insurance companies have loosened guidelines for network vs. non network providers. Be sure to know the right questions to ask when navigating this complex issue. It is not a black and white situation.


Having an effective revenue cycle management in place for your center is essential in optimizing performance and margins. From the first contact with patients, such as verification of benefits and authorization preparation, to efficient service coding and billing, to finalizing and collecting on all claims. 

Throughout the whole process, there are key elements in ensuring success with revenue collections that we will cover in this article. Finding the right people to facilitate and function technology, getting real-time eligibility and service authorizations, using data to build a successful game plan for claims denials. 

Finding the right people to facilitate and function technology: Billers are in high demand now days and technology tools continually advance in ways of making jobs and tasks streamlined and accommodating for centers and their treatment teams, however, you still need people with the ability to use the tools available to them. They have to be able to use those tools effectively while understanding the billing and collection process behind them. Payers advise that we use their online tools to obtain the information we need, so it is very important to utilize those tools available to prevent delays or denials. A solid process and accountability of each person involved, maintenance training, and incentives are all factors in maximizing your revenue cycle management.

Getting real-time eligibility and service authorizations: More than 20% of denied claims are usually caused from an authorization issue. Prioritizing real-time verification of benefits and authorizations has to be the main ingredients to ensure success from beginning to end. Many payers allow the ability to get this information online also, making it even more convenient when you don’t have to call someone and wait on hold forever. Create structured processes, that is frequently updated, for prior authorizations for each payer including any benefit coverages or medically necessity requirements. 

Using data to build a successful game plan for claims denials: The only way to prevent claim denials is to use data from denied claims to improve the process. Understanding the how, why, and what caused claims to be denied, you can adjust accordingly to prevent it from happening again with future claims, resulting in an improved revenue cycle management process. There are cases where it may seem impossible to overturn a denied claim, but if you do your due diligence, respond in a fast and timely manner, there’s a good chance you may surprise yourself. Exhaust all options before archiving denied claims. 

These are just a few ways to possibly help increase your insurance reimbursements for your patients and decrease claim denials. This is so beneficial to everyone involved, from the insurance companies to the staff and treatment team at the center, and most importantly, the patient and their family. 

I would like the opportunity to hear what has worked for your center in the past or present? What obstacles do you frequently run into when dealing with your insurance claims? I look forward to discussing more ways to improve. 

Billing for IOP in a nutshell

Are you seeing changes in IOP billing for mental health in 2021? We certainly are. There are new requirements coming from UHC, BCBS, Cigna, Aetna and all the rest for all levels of care including RTC and PHP billing all the way through outpatient services.

When dealing with IOP billing specifically, there are generally a few more requirements and consistent attention needed to make sure everyone involved is happy. From the patient being able to continue their treatment, to the doctors treating the patient, and of course, making sure the insurance companies are on board with allowing the overall treatment to happen.

Behavioral health levels of care

Behavioral health facilities essentially provide four types of services that insurance companies may consider reimbursement when treating a patient.

  1. Hospital-based inpatient programs, that require medical monitoring, nursing care, and other behavioral health services treated 24/7.
  2. Residential treatment programs, also known as RTC, which is more of a sub-acute facility based monitoring, offering other behavioral health services.
  3. Partial hospital programs, better known as PHP, providing services in an ambulatory setting, and generally requires 20 hours per week.
  4. Intensive outpatient programs, known as IOP, where the patient is provided with behavioral health services for at least 9 to 19 hours a week for adults, and for children and adolescents at least six hours is generally acceptable.

There are so many different modalities and service types when billing for IOP, compared to inpatient and hospital-based programs, which in turn makes it more challenging when trying to get reimbursement.

Similar Article: The Secret To Getting Reimbursed Quicker- Claims Follow Up

Typical services covered in IOPs

If a facility is offering IOP services, they must be licensed at the state level and usually will treat substance abuse and most mental health disorders. Most facilities will set up a weekly schedule for IOP patients, consisting of meeting at least two hours per day, and from three to five days a week.

Typical services generally covered are:

  • Individual psychotherapy
  • Family psychotherapy
  • Group psychotherapy
  • Psycho-educational services
  • Medical monitoring

CMS guidelines required in order for the facility to be eligible for reimbursement for IOP services are:

HCPCS and revenue codes for IOPs

IOP billing codes may differ depending on what the patient’s diagnosis is, and what services are provided primarily either for substance abuse or for mental health issues. Also, another thing to remember when billing for IOP services, if the patient has a dual-diagnosis for both substance abuse and mental health, you can generally only bill for one IOP session per day, even if both were being addressed in therapy. It is always good to document that information for the insurance company, but beware to not submit duplicate claims, as they’ll inevitably get denied and or delay payment.

  • S9480/0905: The per diem outpatient IOP code for psychiatric issues which may include eating disorders, is S9480, and most times is always paired with revenue code 0905. This is generally used for private payers, as Medicare does not recognize these codes.
  • H0015/0906: The per diem outpatient IOP code for all chemical dependency is H0015, and is always paired with revenue code 0906.

Similar Article: 5 Insurance Billing Errors Drug Treatment Centers Can Avoid

Pre-authorization, clinical and IOP all go hand in hand

Just like with all inpatient level care services, most insurance companies require all IOP services obtain a pre-authorization before reimbursement is complete. Although IOP, technically provides only two to three hours per day, most payers require at least 180 minutes of active therapy per day in order to reimburse the per diem rates.

This is why I stated earlier, that clinical documentation is a key element in supporting the full 180 minutes per day, otherwise you’ll end up with a denied claim. A concurrent authorization is generally required to continue to treat the patient and sometimes referred to as short-term interventions, where all clinical and progress of the patient is considered and decided for continued authorization.

We hope this was a helpful and informative article about IOP in particular. If you have any questions about IOP billing and how to maximize your reimbursement for behavioral health services or any other billing concern, please feel free to contact us via email, or check out a ton of extra billing resources here.

Client Kelly Doe went to treatment. Medical necessity was met but it had to go to review to get approved. Claims magically got lost. After 4 follow up calls and 2 months later, claims finally paid. Although paying at an embarrassingly low rate, 2 of the 4 RTC claims paid correctly. The other 2? Mysteriously short on $.12. A measly dime and two pennies.  

So how can you ensure you’re staying on top of that $.12? Limiting your Denial Gap and being precise when addressing any correspondence from the insurance company. 

Creating and maintaining a solid process from the Date of Admission until Discharge is only half the battle when dealing with insurance claims. Depending on each individual insurance policy, most treatment programs do not align with the benefits allowed for behavioral health. When this happens, most programs will bill as an Out of Network provider, meaning more hoops and hurdles to get through, and of course ultimately affecting the allowed amounts paid to members.

Typically a facility will start billing at the RTC or PHP Levels of Care, then based on the Treatment Plans involved with the patient and Treatment Team, will step down to lower levels of care like IOP and Routine Outpatient Services. What most don’t realize is the hard work and attention to detail that goes into making each claim from RTC all the way down to ROP get processed smoothly, but it’s not so smooth sometimes. 

The time it takes for things to be updated and processed can take a huge toll of members if they have to come out of pocket to pay for treatment, so every cent is needed to help cover any losses financially members and their families go through. 

A scenario could be something like this. Receiving correspondence on pending claims requesting a correction on the billing or needing updated clinical, then once re-submitting with everything they requested, it finally gets paid, but at a lower allowed amount then you’re used to. Frustrating, right? It was the same level of care for the same amounts billed, but why do they not pay the same?

There are many factors why this could be. It can be a simple processing error, in which case needs to be sent back for review, or it can be a billing error and 1 or 2 days did not get billed, however, usually the difference in the paid amounts has to do with the members policy and how in and out of network providers are looked at. In our experience, we have approached it in a way of never giving up and being prompt on requested information needed to complete processing. 

We’ve also found out that having the therapists and nurses assistance when treatment is not deemed medically necessary, and utilizing detailed medical records that cater to the insurance company verbiage and jargon, can definitely help with improving daily rates for the higher levels of care like RTC and PHP.

Of course it is not worth the program to fight for that $.12 amount– however, if an insurance company is doing this to millions of members on millions of claims. We’re talking fractions of a penny, but over time, this adds up to be a lot. Just ask the guys from “Office Space”.