Telehealth has completely transformed mental health care. Your clients can now attend therapy sessions from their living rooms, cars, or wherever they feel comfortable. It's convenient, accessible, and honestly? It's not going anywhere.
But here's the thing: while delivering care via telehealth has become second nature for most mental health practices, billing for it correctly is still tripping people up. And those billing mistakes? They're costing practices thousands of dollars in denied claims, delayed reimbursements, and even triggering audits.
The good news is that most telehealth billing errors are completely avoidable once you know what to look for. Let's break down the seven most common mistakes we see mental health practices making: and more importantly, how to fix them.
Mistake #1: Using the Wrong Place of Service (POS) Code
This one is a classic, and it's costing practices real money.
When your client is sitting at home for their telehealth session, you need to use POS 10 (Telehealth Provided in Patient's Home). Sounds simple enough, right? But many practices are still defaulting to POS 02 (Telehealth Provided Other than in Patient's Home) or worse: using in-office codes out of habit.
Why does this matter? Using the wrong POS code can trigger facility-rate reimbursement instead of the higher non-facility rate. We're talking about $35 to $60 less per visit. Multiply that across dozens of weekly sessions, and you're leaving serious money on the table.
The Fix: Update your billing workflows to prompt for the patient's location at the start of each telehealth encounter. Make POS 10 your default for home-based sessions and train your team to verify before submitting claims.
Mistake #2: Modifier Mishaps (or Forgetting Them Entirely)
Modifiers are tiny but mighty. They tell payers exactly how a service was delivered, and getting them wrong: or leaving them off: is one of the fastest ways to get a claim denied.
For telehealth, Modifier 95 indicates a synchronous (real-time) audio-video encounter. If you're doing audio-only sessions (which some payers now allow for mental health), you'll typically use specific audio-only CPT codes instead of slapping a modifier on a video code.
Here's where it gets tricky: modifier requirements vary by payer. Medicare, Medicaid, and commercial insurers don't always play by the same rules. What works for one might get rejected by another.
The Fix: Create a quick-reference modifier guide for your most common payers. Review it quarterly because: surprise: payer policies love to change without much fanfare. When in doubt, check the payer's provider portal before submitting.
Mistake #3: Incomplete or Missing Documentation
Let's be real: documentation isn't the fun part of running a mental health practice. But it's absolutely essential for telehealth billing, and cutting corners here is asking for trouble.
The majority of mental health claim denials come down to missing or incomplete documentation. Payers want to see:
- A signed treatment plan
- Detailed progress notes for each session
- Clear documentation of medical necessity
- Patient consent for telehealth services
That last one catches a lot of practices off guard. You need to document that the patient consented to receive care via telehealth: ideally at the start of each encounter.
The Fix: Build documentation checkpoints into your EHR workflow. Before closing out a session note, make sure you've captured consent, session length, interventions used, and progress toward treatment goals. It takes an extra minute but saves hours of appeals later.
Mistake #4: Upcoding (Billing at the Highest Level Every Time)
We get it: you want to be fairly compensated for your work. But consistently billing every telehealth session at the highest CPT code level is a red flag that will eventually catch up with you.
Payers use algorithms to spot unusual patterns, and a provider who bills 90837 (60-minute psychotherapy) for 95% of their sessions is going to draw attention. If your documentation doesn't support that level of service, you're looking at claim denials, recoupments, or even fraud investigations.
The Fix: Match your billing codes to the actual time and complexity of each session. A 45-minute session is a 45-minute session: bill it as such. Conduct regular internal audits to make sure your coding patterns align with your documented clinical activities.
Mistake #5: Ignoring Audio-Only Documentation Requirements
Audio-only telehealth sessions became more widely accepted during the pandemic, and many payers have kept these policies in place for mental health services. But there's a catch: you can't just bill an audio-only session the same way you bill a video session.
If you're conducting audio-only encounters, you typically need to document that:
- Audio-video technology was available
- The patient either lacked the technical capability for video OR declined to use it
Skip this documentation, and you're setting yourself up for denials.
The Fix: Add a simple checkbox or templated statement to your session notes for audio-only encounters. Something like: "Patient was offered video telehealth but declined/was unable to connect via video due to [reason]. Session conducted via audio only."
Mistake #6: Credentialing Gaps for Telehealth
Here's a scenario we see way too often: A therapist starts seeing clients via telehealth, bills the insurance company, and then discovers their claims are being denied because they're not credentialed for telehealth services with that payer.
Some payers require separate telehealth credentialing or specific attestations. Others need you to update your practice location information to include telehealth as a service modality. And if you're seeing clients across state lines? That opens up a whole other can of worms with state licensing and payer enrollment.
The Fix: Before launching telehealth services (or if you've been winging it), contact each payer to confirm your telehealth credentialing status. Document everything, and set calendar reminders for re-credentialing deadlines. This is one of those tedious tasks that pays off big time.
Mistake #7: Not Tracking Telehealth Utilization Patterns
Payers and auditors look at the big picture. If your practice shows unusual patterns: like billing telehealth for an exceptionally high number of patients compared to in-person visits, or consistently documenting sessions that run much longer than average: it can trigger a closer look.
This doesn't mean you're doing anything wrong. Maybe your practice genuinely specializes in intensive telehealth-based treatment. But if you can't demonstrate medical necessity and proper documentation to back up those patterns, you're vulnerable.
The Fix: Run monthly reports on your telehealth utilization. Look at average session lengths, frequency of visits per patient, and the ratio of telehealth to in-person services. If anything looks unusual, make sure your documentation tells the full clinical story.
The Bottom Line: Get Your Telehealth Billing Right
Telehealth isn't going away, and neither are the billing complexities that come with it. The practices that thrive are the ones that invest in getting their billing processes right: accurate documentation, correct coding, and staying on top of ever-changing payer requirements.
If this all feels overwhelming, you're not alone. Telehealth billing is genuinely complicated, and most mental health providers didn't get into this field to become billing experts.
That's where ALS Billing comes in. Our USA-based team specializes in medical billing for mental health practices, and we know telehealth inside and out. From claim submission to denial management, we handle the billing headaches so you can focus on what you do best: helping your clients.
Ready to stop leaving money on the table? Get in touch with us and let's talk about how we can help your practice get paid faster and more accurately.
Contact Us
Phone: (513) 493-1235
Website: www.alsbilling.com