12 Enduring Myths in Mental Health Billing 

Why is it so difficult to find correct, CURRENT information about billing and insurance topics? I hear this all the time, I Found the Answer Online! It’s Not True?  This can be a loaded question. 

Online information can be years out of date, of questionable reliability, and may not be generalizable to your problem, payer, specialty, or location. In addition, it can be sooooooooooo boring…!  

After reading whatever you can find, will you be any clearer on what you need to do when you have a problem?

I’m guessing – probably not!

In this blog, I will help you with these challenges, and if you still need help, come talk to me.

Today I want to share some of the beliefs that seem to persist in mental health billing and private practice business management – despite having been repeatedly debunked.  Saying I Found the Answer Online! It’s Not True? – just isn’t gonna cut the mustard.   You must get the real and true FACTS. 

In plain language, I will explain why these are myths and what the facts truly are.  I’ll also provide suggestions to keep your practice out of trouble. 


The 12 Myths

Myth #1
The client changed insurance, so I have to / can code the first session on the new insurance as 90791.

No. There is no relation between a CPT code and the client obtaining a new insurance policy.  A CPT code describes what you do during a visit. In the case of 90791, it is a diagnostic interview (gathering history, understanding client goals for treatment, mental status, etc.) as opposed to a therapy session.


Clinically speaking:  Why would you conduct another diagnostic interview just because the client changed plans? You will only code 90791 if that’s what you did – regardless of the insurance payer on the day of the visit.  Billing ALWAYS follows your clinical documentation. No exceptions, ever. 

Myth #2
Always give your client a “non-harmful” diagnosis such as Adjustment Disorder, no matter what.  Or, in the form of a question to me: “What’s the best diagnosis to give a client?”

The “best” diagnosis is the one your client has! What do they qualify for in your clinical opinion? Back it up in your documentation with reference to published criteria. 

That “non-harmful diagnosis” advice is a throwback to the days when there was more stigma around mental health disorders and treatment, and fewer legal protections. While there is still a stigma, I would argue that as a clinician, you are putting yourself in potential jeopardy if you try to “game” the system. And possibly even unknowingly harming your client.

If your client has a severe diagnosis, but you list Adjustment Disorder, you could be jeopardizing your client’s ability to get needed treatment covered by her insurance.  If your treatment gets selected for clinical review, what do you say?

Clinical reviewer: So, why is Sally still in therapy after 3 years? Adjustment disorders are short-term.

Therapist: Well…she has severe trauma/depression/borderline personality disorder…

Clinical reviewer: Ok, so why are none of those diagnosis codes reported on claims?

Therapist:  Um….


That therapist doesn’t appear to have much credibility now.  There’s a risk of malpractice or license complaints.

Not to mention a SLEW of record audits and possible clawbacks, since he’s now signaled to the insurance payer that he doesn’t diagnose according to published criteria.

Do you want to go through that hassle and all the stress that accompanies it?



Myth #3
I hired a clinician to work in my group practice. Since credentialing takes so long, I can bill for their sessions as if I were supervising them / incident-to.

Payers don’t allow it. 

Read the definition of incident-to. It’s something else entirely. 

I don’t care if a colleague did it. Maybe she got away with it…does that mean YOU will? Are you willing to risk your professional good name and possibly your license to practice?

Billing for another licensed clinician as if you were the treating provider, is fraudulent. 

If that clinician is independently licensed, there’s no justification for “supervision.” (If the clinician is pre-licensed….be careful. Most private payers don’t pay for clinicians under supervision.)

Regardless of how frustrating, slow, and inefficient the credentialing process is…and it is…this isn’t a solution that is worth the risk.  

Instead, try getting a single-case agreement. Or possibly the client has out-of-network benefits and is able to afford to use them. 

TIP: It is EXTREMELY IMPORTANT – to make sure you plan ahead!

Credentialing and contracting can take anywhere from 30-180 days (or even longer; it depends on the payer). If you are going to make a change to your practice, do yourself a favor and plan in advance. 

This is true whether you are hiring another clinician, or whether you are leaving a group to become independent, or moving to another city. Do not expect that this will be a short process. This means you will have to stockpile financial reserves in order to get through a period when fewer claims are able to be paid.

Myth #4
The client can use whichever of their insurance policies they choose or that pays the best.

Nope. It’s never up to your client, even though it does seem like it should be their choice. After all, unless they have Medicaid, the client IS paying for these benefits. 

Truth: the insurance industry has set up a zillion coordination of benefits rules that determine which policies become primary, and which become secondary. It’s extremely complicated! 

Trying to take responsibility for your client’s Coordination of Benefits practically guarantees denials and/or clawbacks. Don’t do for your clients what your clients need to do for themselves. 

In the Store, a FREE download describes the most well-known Coordination of Benefits rules, so that you can help your client stay informed. 

Myth #5
Use DSM for the diagnosis code on claims.

The DSM, for the most part, crosswalks to the ICD-10.  This stands for International Classification of Diseases, version 10. It’s updated every year, on October 1st

DSM may be the more valid or useful CLINICAL resource for mental health, but for BILLING, HIPAA mandates the use of ICD-10 codes. If you use an invalid code, your claim will reject. It will be returned to you, unprocessed.

When you choose a DSM diagnosis, be sure to use the GRAY codes that begin with a letter (usually F, for mental health). Those codes in gray are the ICD10 codes.

If you need to cross-check whether a diagnosis is acceptable for billing, go here

Myth #6
If a claim applies to the deductible, I can resubmit it later & it will be paid. 

Fact: This is what you will get:








There are numerous strategies to manage deductibles. 

Myth #7
Let’s all get together & boycott the insurance companies – no one signs up unless they pay $x per visit. That will force them to pay decently.

Seems only fair. Employees can unionize, right?

This is the one thing that I seriously don’t understand…and think is wrong.  But I’m not a lawyer – everything I have read written by lawyers says that independent clinicians launching a boycott is currently against the law.

Aside from efforts by professional associations to level the playing field with respect to the insurance companies, there’s not much that can be done other than trying to get your own rates improved. The store has a guide to help you with that process.

Myth #8
Any amount not paid by clients is tax-deductible.

Sorry…I can’t speak to this one. Well, not definitively, anyway. But from a conversation with my own accountant this year, I’m thinking this qualifies as an urban legend. 

According to my accountant, if you haven’t collected any money, then it’s not income… which means you can NOT deduct something from your taxable income when you didn’t earn the income.

That makes sense … when you put it in plain English like that. But on this one, please…talk to a qualified accountant. The IRS doesn’t have a forgiving reputation




Myth #9
If I only file claims on paper – I’m not subject to HIPAA.

Partially true. But when you think about it, it’s a paper shield. Pun intended!

According to HIPAA, it is true that healthcare providers are ONLY subject to the Privacy provisions, and not the Security provisions, *IF* the provider does not engage in ANY electronic transactions involving Protected Health Information.

Here’s where the myth comes in: 

HIPAA wasn’t talking about just CLAIMS. They meant ANY electronic transmission…of any kind. 

If you EVER send a  fax or send/receive an email (encrypted or otherwise), then you’ve engaged in an electronic transmission involving PHI, and..

Now you’re a “covered entity” just like everyone else!



Myth #10
I can see a client pro-bono – but I’ll file claims too, just in case the insurance pays.

If a client is truly needy, there are ethical options for treatment, pro-bono certainly being one of them. 

An insurance payer has no jurisdiction to pass judgment on you if you choose to treat a client “pro-bono.” Even if you’re contracted with that payer. 

But, “Pro-bono” means that no money changes hands, ever

Adding insurance into the equation causes potential legal problems. 

If you are trying to help your client meet their deductible but are not actually collecting any money, that’s the issue. On the claim, you’re saying the client owes, but then later quietly forgiving it all.

It’s considered a potential violation of either the False Claims Act or the Anti-Kickback Statute (or both). In other words – it’s illegal.  

If you’d like references, contact me and I’ll be happy to send you a few. 


Does anyone look good        in an orange jumpsuit?

Best practice: pro-bono, and even sliding scales,
should not be used if you are also
filing insurance claims
for the same client.
Keep them separate.





Myth #11
I can collect money from a Medicaid client if they agree to pay. 

In a small minority of states, yes, you can, IF you follow the state’s rules

Usually, that means the client signs an agreement to pay after a thorough informed consent process where you have outlined other options (and documented doing so!)

But I can’t stress enough that it’s not ok in most states!  

Even in the states that allow collecting from Medicaid clients, it’s only under specific circumstances. For example, if the service you are providing isn’t covered by the state’s Medicaid program.

Do your homework before presuming collecting from a Medicaid client is ok. Yes, I get it: documents written in Medicaid jargon aren’t easy to interpret. 

Be very careful if you proceed with this one: there’s a reason people have Medicaid, right?


Myth #12
Insurance can’t audit my records if I’m out of network.

Any claim that is submitted to insurance can be audited. Network status is irrelevant.

If they pay for treatment, they have the right to review records for “medical necessity” – either before or after paying the claim. 

Read box 12 of the 1500 claim form. Claim forms submitted by clients with a superbill attached have the same exact lingo on them. 

“I authorize the release of any medical or other information necessary to process this claim.”


If the payer wants to scrutinize records, then they can. Even self-pay is not 100% protection against audits. You can choose not to contract with insurance payers, but you’re not allowed to forbid clients from attempting to get reimbursement from THEIR health insurance. 

This means if the client tries to be reimbursed, and the payer wants to see your records…hand them over!  Being out of network isn’t a justification. The only reason you have to withhold the records is if the client withdraws their consent to the release of the information – in writing. 

Do you have any other suspicions that something you’ve always believed might turn out not to be true?
Now that you know…. “I Found the Answer Online! It’s Not True?” just wont fly!

Let me know and I’ll address it in a future blog post. 

Until next time, if you need help, your Billing Buddy is always here.  Just ask.