How to Interpret Data from a Mental Health Eligibility Verification

One of the most annoying aspects of mental health practice is frequently dealing with insurance. Even if you believe you have filed all the required documentation and information, claims denials are still possible. You might even be reluctant to accept new patients as a mental health professional because of possible insurance problems and rejected claims.

Fortunately, with some preparation and knowledge of how to read and interpret mental health eligibility verification data, many of the most frequent reasons for mental health claims denials can be avoided.

The Most Common Causes Of Denied Mental Health Claims

There are a few typical explanations why an insurance provider would reject a mental health claim. To prevent future claim denials, it’s a good idea to comprehend some of those explanations. Despite the fact that insurance companies justifications can seem hazy, the following are a few of the most frequent ones:

1. Problems with diagnosis

Simply put, erroneous or incomplete diagnosis codes can cause insurance issues for clinicians and other mental health practitioners. This is particularly true when using any ICD-9 diagnosis. Although a diagnosis may occasionally only include three or four numbers, most insurance claims require five digits. Verify the accuracy of each of your diagnosis codes against the official database.

2. Prior authorization issues

Prior authorisation, often known as “pre-authorization,” describes any situation in which an insurance provider’s office must notify the insurance company before it will agree to pay some or all of the cost of a service and/or a prescribed drug. Prior authorisation is no longer used as frequently as it once was.

However, certain insurance policies still demand prior authorizations, and failing to obtain one may cause a claim to be delayed or rejected. Prior approvals are most frequently used for medicines but they can also be used for treatment services. The physician usually needs to submit a substantial quantity of paperwork to the insurance company to complete a prior authorization.

3. Incorrect use of codes

If you employ CPT codes, insurance approval may be hampered by these codes. You might unintentionally use an invalid or outdated CPT code, a code that was not permitted, or a code that the client’s insurance policy does not cover. Remember that “Place of Service” (POS) codes, which are not necessarily logical, also fall under this category. For instance, the code for office is “11,” not “O” or “OFF.” Making a mistake with one or more of these coding problems could lead to the eventual denial of claims for mental health services.

4. Exceed client’s yearly session limit

The amount of sessions a customer can receive yearly may be restricted by some insurance policies. This is frequently particularly accurate for insurance policies that demand prior authorisation. It’s crucial to remember that an insurance plan’s definition of “year” isn’t always the same as the calendar year.

5. The client lacks consistent primary care

Before covering the expenses of mental health treatments or medications, some insurance companies will demand that clients have frequent, documented care from their primary care physician. This often applies to circumstances where the mental health professional is not a medical professional.

6. Other paperwork issues

Other typical documentation problems can also result in the rejection of claims for mental health services. These problems can include submitting the claim after the deadline, utilizing the wrong claim form, filling it out in a legible or incomplete manner, and sending claims to the incorrect address.

How To Prevent Denied Mental Health Claims

As a provider, you can prevent care interruptions for your clients due to insurance or financial issues by avoiding denied mental health claims. To make sure that you, the provider, get timely and complete payments, avoiding these denials is essential. 

Thankfully, a lot of the typical reasons why mental health claims are denied can be prevented. You can take a few actions to reduce the likelihood of refused claims as much as feasible.

1. Confirming correct diagnosis codes

Be meticulous with the accuracy of diagnosis codes, CPT codes, POS codes, and any other applicable codes before submitting any documentation to the insurance companies. This kind of attention to detail will probably end up saving you time and frustration in the long run and preventing a claim denial.

2. Maintaining accurate, comprehensive health records

It’s vital to get and then keep a thorough health record for each new client you take on. All session notes, insurance cards, identity documents, and notes from any prior mental health therapy are included.

A list of present and past prescription drugs, payment options, and general health information, among other things. To reply to prior authorization requests and other insurance requirements, you might need any or all of the evidence listed above.

3. Verifying a client’s eligibility and benefits before their first appointment

Verifying mental health insurance is one of the first steps you should do before working with a new client. Before starting care, providers owe their patients the duty of determining their coverage and benefits. You guarantee that your medical care is covered by doing this. Or, if it is not covered, you will refrain from starting therapy with a patient you can’t keep.


Interpreting data from a patient insurance verification is crucial for mental health professionals to navigate the complexities of insurance coverage and provide appropriate care to patients.

By carefully reviewing insurance coverage details, mental health service coverage, network status, financial obligations, prior authorization requirements, and billing guidelines, mental health professionals can ensure accurate billing, maximize insurance reimbursement, and deliver quality care while minimizing financial burdens for patients.

A thorough understanding of the data obtained from the eligibility verification process enables mental health professionals to effectively plan and provide the necessary mental health services to those in need.