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The Role of Insurance Company Prior Authorization in the Billing Process for Mental Health Practices

Mental Health Provider filling out Prior Authorization Form

What is Prior Authorization?

Insurance company prior authorization is an important step in the billing process for mental health practices. This process involves obtaining approval from the patient's insurance provider before providing certain treatments or procedures. The purpose of prior authorization is to ensure that the treatment being provided is medically necessary and that the insurance company will cover the costs.

Prior authorization is required for many mental health services, including but not limited to:

  • Outpatient therapy

  • Inpatient treatment

  • Medication management

  • Psychological testing

  • Certain types of equipment and supplies

How do you get Prior Authorization?

The process of obtaining prior authorization can be time-consuming and can delay treatment for the patient. It is important for mental health practices to have a clear understanding of the requirements for each insurance company, including the information and documentation that is needed to obtain approval. You can refer to your contracts, reference online provider portals, or reach out to the insurance company directly to gain clarity on the processes of obtaining prior authorization.

In order to streamline the prior authorization process, many mental health practices use electronic medical records (EMRs) and practice management software that are designed to facilitate communication between the practice and the insurance company. These tools can help to ensure that all of the necessary information is submitted in a timely manner, and can also help to track the status of the authorization request.

It's also important to note that insurance companies may require an update or re-approval over a certain time period, even after the approval is given, so it's important for the practice to keep track of the approval date and when re-approval is needed to avoid delay in treatment or payment.

Prior Authorization and Billing

Mental health practices need to understand the role of insurance company prior authorization in the billing process, as it can greatly impact the practice's revenue and the ability to provide timely and effective care to patients. If you are experiencing billing issues due to prior authorizations, Practice Solutions can help! Our billers can support you in understanding prior authorizations, pointing you in the right direction for prior authorization help, and can work on claim appeals and follow up where applicable. Contact us for a free consultation!

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