Billing and coding

How to bill insurance for therapy

Headway strives to simplify billing insurance so you can focus on providing care. Read our comprehensive guide to mental health billing.

Helpful as it can be to mental health, not everyone can afford to pay for therapy sessions out of pocket. If you accept health insurance, you’ll likely have the opportunity to help more people, and to build a thriving business in the process.

Still, navigating the world of health insurance can be hard, especially if you’re not used to it. Every insurance provider is different and every client has different coverage, which can quickly make things feel complicated.

The good news: You’ll probably end up following the same few steps when you bill insurance for therapy sessions. And fully understanding and optimizing the process can help ensure you get paid.

Read on to learn everything you need to know about how to bill insurance for therapy.

The pros and cons of accepting insurance

Accepting insurance as a therapist comes with pros and cons, which you should weigh before deciding. Some of the potential benefits of accepting insurance include:

Attracting more clients to your practice
Making therapy more affordable for clients
Building relationships with community partners for referrals
Potentially earning a more stable income

On the other hand, potential drawbacks of accepting insurance include:

Spending time getting credentialed
Following insurance compliance rules in documentation
Dealing with different processes and rates for each insurance panel
Facing potential audits or compliance issues

Step 1: Get credentialed.

Before you can begin accepting, you’ll need to get credentialed with individual insurance companies. Essentially, that means applying to be a provider within an insurance company, submitting your qualifications, license, credentials, and other required documentation. If approved, you’ll sign a contract with the insurance company that allows you to bill them.

The credentialing process can be long and involved. “It takes several hours of work per insurance company to get credentialed, because it’s a really detailed and intimate process,” says Abby Gagerman, a therapist in Chicago and founder of AEG Wellness.

The good news? Headway makes it faster and easier for providers to get credentialed with insurance panels, so you can begin accepting insurance and taking on clients quickly.

Preparing for credentialing

Preparing for credentialing is an important step in ensuring a smooth process. First determine which insurance companies you want to work with. Potential considerations may include:

Contracted rates: The amount you’ll be paid for sessions as an in-network provider
Geographic demand: How common it is for people in your area to use a particular insurance company
Reputation: Considering what you’ve heard about the company, such as how easy it is to work with them

Credentialing with insurance companies

Next, you’ll need to gather certain information, such as your NPI number (your licensing). You’ll also want to register with CAQH, the Council for Affordable Quality Healthcare. Insurance plans use information providers submitted to CAQH to ensure they have the education, training, and experience to provide quality care to clients.

Pro tip: Aim to start the credentialing process as early as possible, because insurance companies can take several months to review and approve your application. Keeping your information organized with a checklist can help streamline the process by reducing waiting time and increasing your chances of getting credentialed without unnecessary back-and-forth.

Step 2: Implement practice management.

Having a practice management tool in place is vital for billing insurance. Consider investing in an electronic health record (EHR) software that not only stores important client data but allows you to file and manage insurance claims.

Along with making credentialing simple for providers, Headway offers practice management tools and EHR features so you can easily bill payers, collect payments, and track insurance claims, ensuring compliance with payer policies in the process.

Step 3: Verify and authorize client coverage.

Once you begin accepting insurance, you’ll need to do some background work to understand your clients’ coverage. Insurance verification essentially confirms a client’s status and specific benefits with an insurance company. Verifying the client’s insurance is important because it can help prevent claim denials, identify patient costs, and ensure compliance with payer policies.

To verify coverage, you’ll need to collect information from your client, including their insurance card, ID, and date of birth. You can submit this information online or directly call the payer, both of which can be time-consuming. Headway takes care of insurance verification for its providers, saving them valuable time (and potential stress).

Step 4: Bill insurance for therapy by filing a claim.

As a provider who accepts insurance, you’ll need to file individual claims for each client session. To submit a claim to an insurance provider, you must include documentation that outlines a diagnosis and the services rendered based on that diagnosis. However, it's more than just submitting basic session notes. Documentation needs to be precise — insurance payers will only reimburse for work you support through your documentation.

The American Medical Association (AMA) provides CPT guidelines on how to structure your documentation and what to include. Additionally, each payer has its own set of specific rules for compliant documentation. A key element to remember is the “golden thread” — ensuring that each session reflects the current diagnosis and treatment plan.

To ensure prompt reimbursement (and no clawbacks!), use the CPT code that best represents the session. The 10 most common CPT code are:

90837: 60 minute psychotherapy
90834: 45 minute psychotherapy
90832: 30 minute psychotherapy
90791: Psychiatric diagnostic evaluation
90792: Psychiatric diagnostic evaluation (with medical services)
99203–99205 and 99213–99215: E/M codes
90833, 90836, and 90838: Individual psychotherapy add-on codes (for use with E/M codes)
90846: Family psychotherapy (without patient present)
90847: Family psychotherapy (with patient present)
90785: Interactive complexity
90839 and 90840: Psychotherapy for crisis

To make this process easier, Headway offers templates designed to meet the documentation requirements of multiple payers, increasing the likelihood of successful claims and smoother audits overall.

Step 5: Track the claim’s status.

Once you submit claims, it can take some time to get paid by insurance panels, who will need to verify your claims. (The exact time varies depending on insurance panels.) To manage your budget, it’s important to have a process in place for tracking claims.

Most insurance companies offer online portals where you can check the status of claims, including whether they’ve been approved, denied, or are still under review. The right practice management tool can help you keep tabs on claims in process.

Step 6: Get paid.

You have a few options when it comes to getting paid by insurance companies. You can choose to receive paper checks if you prefer, or you can receive payments via EFT (electronic funds transfer), which is usually faster.

Each insurance company is different in terms of how often and when they pay you. Some might pay you weekly, while others may deposit payments once a month. You may get paid for each session individually or in a lump sum for multiple sessions. Either way, it’s important to be aware of each insurance company’s process so you can plan your budget accordingly.

Having predictable paychecks doesn’t have to feel like a luxury, even if you accept insurance. If you partner with Headway to handle your billing, you’ll get paid twice monthly on a regular schedule.

Can a non-licensed therapist bill insurance?

Only licensed providers can practice psychotherapy, and only credentialed providers can get paid by insurance companies. But that doesn’t mean only the licensed, credentialed provider can actually manage the billing. In fact, many therapists choose to hire administrative staff or sign up for services like Headway to make billing easier and save time to focus on actually providing therapy.

Expedite the billing process with Headway.

Accepting insurance as a therapy provider can benefit your practice in many ways, from helping you build your client base to making therapy more affordable for people you work with. That said: Working with insurance providers isn’t always a simple or quick process. At times, it might even be stressful.

At Headway, we handle the headaches so you can stay focused on what matters most to you as a therapist. You can get credentialed with insurance panels, submit claims for sessions, track your payments, and get paid with ease — so you can focus all your time and energy on supporting your clients on their journeys.

Talk to a practice consultant