5 Things You Should Know About Insurance Billing
Billing insurance can be a great way to earn revenue in your private practice, but it can also be a frustrating and confusing process. I have been handling my own insurance billing in my practice since 2020. There have been many ups and downs as I navigate these different systems. I have learned a lot over the years and have enjoyed supporting countless therapists with billing insurance in their practices. Here are five common misunderstandings I have seen regarding insurance billing.
1 - What is a copay, coinsurance, and deductible?
Everyone's insurance benefits are different, and that can make it hard to know how much money you should collect from the client. Have the client call their insurance to see what their benefits are for outpatient mental health therapy. Your client will most likely have a copayment, coinsurance, or a deductible. That is what you will collect from the client. You can’t collect more than the contract rate from the client.
Copay: is a set amount that the client will owe each session.
Coinsurance: is a percentage of that insurance contracted rate that the client will owe each session.
Deductible: is when the client owes the entire contracted rate amount. The insurance reimburses nothing.
Example:
Contracted Rate: $100
$30 Copay: Client Pays you $30 & Insurance Pays you $70
20% Coinsurance: Client Pays you $20 & Insurance Pays you $80
Deductible: Client Pays you $100 & Insurance Pays you $0
2 - Contracted Rate vs Billed Amount
How much do I bill the insurance, and how am I supposed to know how much they will pay me? If you choose to contract with an insurance company, they should provide you with a contract that includes a fee schedule. This fee schedule should list all of the CPT codes for which they reimburse and the respective reimbursement amounts. These reimbursements represent the contracted amounts. They are set rates that the insurance company pays out, regardless of your higher billed amount. The billed amount is your fee. Just ensure that your billed amount is higher than the contracted rate, because if it is not, the insurance will only reimburse up to your billed amount.
Example 1:
Billed Amount: $150
Contracted Amount: $100
Reimburse: $100
Example 2:
Billed Amount: $80
Contracted Amount: $100
Reimburse: $80
3 - Can I write the difference off on my taxes?
The short answer is no. As you can see in Example 1 above, there is a difference of $50. We billed the insurance $150, but the contracted rate is only $100. We now have a $50 difference that we “write off.” This just means that we accept we aren’t getting our full rate, and it is written off in your Electronic Health Record (EHR) so that the system knows that $50 doesn’t need to be collected. This does not mean you can write off this $50 on your taxes. You can’t write off money you never collected. And you can not bill the client this write off amount.
4 - What is a CPT code?
CPT codes are a worldwide coding system for medical treatment. Each service is assigned a five-digit code that indicates the type of service provided to health insurance companies. Depending on the method or service, each unique code refers to a specific service. Check with your colleagues regarding the CPT codes they are using.
Here are the common CPT codes for therapists:
90791 – Initial Session/Initial Assessment
90837 – 53+ Minute Session
90834 – 38-52 Minute Session
90832 – 16-37 Minute Session (You can’t charge for sessions under 16 Minutes)
5 - How to keep track of claims I submitted?
If the Electronic Health Record (EHR) you use allows you to electronically submit claims, then it will most likely have an area for you to see and review what claims you have submitted and their status. I prefer to easily see everything in one space, so I created a Google Sheets spreadsheet to keep track of the claims I submitted. You can download a free copy of the spreadsheet here. There is a video attached to the spreadsheet on how to use it.
If you’re looking for more one-on-one support with billing, schedule a free consultation below.
I’m Kristi Cornforth, a licensed social worker supporting other clinicians to become their own billers and grow their businesses with practical tools and unwavering support to achieve the practice of their dreams.