The reality of insurance billing platforms: Why control matters for the future of your practice
There is a point in the growth of a therapy practice when billing becomes its own department.
Usually, this happens before anyone names it that way. A solo clinician may be able to handle claims between sessions, check payments once or twice a week, and follow up on the occasional claim denial. Then another clinician joins the practice. Then another. A few clients change insurance. One payer starts denying claims for reasons no one can quite explain. Someone’s credentialing gets delayed. Suddenly the owner is spending Friday afternoon calling insurance companies instead of running the practice.
Once practice owners have escalated through that cycle, people often start researching billing services for mental health practices and wondering whether the work should stay inside the practice or be handed off to an outside billing company or administrative support.
Although there isn’t one right answer regarding outsourced vs. in-house mental health billing, the better choice often depends on how large the practice is, how complicated its insurance mix has become, and how much time is currently disappearing into billing work that takes us away from doing what we want to do: see clients and become better clinicians.
Why does mental health billing get complicated?
At first, billing looks fairly simple. A therapist sees a client, completes the note, creates a claim, submits it, and eventually gets paid.
Once a practice grows, the process gets more layered. Before a client is seen, best practice is to verify their insurance information, monitor rejected claims, post payments, check unpaid balances, respond to denials, follow up on aging claims, correct demographic or coding errors, and reconcile what the insurer says happened with what the practice actually received.
This process is referred to as behavioral health revenue cycle management, and this is something that a practice owner often needs help with. The term sounds more corporate than the day-to-day reality, which is usually someone trying to figure out why three perfectly normal claims have been sitting unpaid for 74 days.
Good billing also requires a working knowledge of medical billing and coding. Most mental health practices use a relatively small number of Current Procedural Terminology (CPT) codes, but familiarity can make people a little too comfortable. Codes still need to match the service that was provided, and payer requirements can vary around modifiers, telehealth, place of service, authorization, medical necessity, and timely filing (set by each payer, from as short as 90 days to a full year, and 12 months for Medicare).
Take psychotherapy CPT code 90837, for example. Most therapists know 90837 as the psychotherapy CPT code used for 60-minute psychotherapy sessions. Medicare guidance places the service at 53 minutes or more of psychotherapy time.
SimplePractice’s support documentation lists claims filed outside a payer’s timely filing window, inactive coverage, and missing or invalid provider details among the common reasons claims get denied. Luckily, SimplePractice also automates many of these error detections to help practice owners and admin identify them in a timely manner.
A billing system has to catch these problems consistently. In a busy practice, small mistakes have a way of multiplying.
Are in-house mental health billing services worth it?
Is it better to handle billing services for mental health in-house or outsourced? There are real advantages to having insurance billing handled by someone inside the practice.
An in-house biller gets to know the clinicians (and their billing idiosyncrasies), the payer mix, the contracts, the recurring problems, and the specific quirks of the practice. Over time, that familiarity becomes incredibly useful for mental health billing services. Unlike outsourced mental health billing, in-house billers may know that one insurance company regularly delays claims for a particular provider, that another frequently requests additional information, or that a certain plan has a habit of processing telehealth claims differently.
There is also something valuable about proximity when comparing outsourced vs. in-house mental health billing. A clinician can ask a quick question. A practice owner can pull someone into a conversation. Mental health billing service problems can be discussed alongside scheduling, credentialing, and client issues without crossing organizational lines, and this ultimately helps practices grow.
As the role grows, so do the responsibilities around it. Unlike outsourced mental health billers, an in-house biller needs to be hired, trained, supervised, paid, and covered when they are sick or on vacation. If one person becomes the keeper of nearly all billing knowledge for mental health billing services, the practice can become surprisingly dependent on them.
This is a common risk in small businesses. One person understands exactly how the system works, everyone else assumes it’s working, and then that person leaves. The claims keep coming in whether or not anyone is there to work on them.
For a larger group practice, building an internal billing function can make a lot of sense. The key is having enough volume to justify the position and enough structure around the role that the entire revenue cycle does not live in one employee’s head.
How do you outsource billing?
When comparing outsourced vs. in-house mental health billing, outsourcing appeals to practice owners for an obvious reason: someone else takes over a large amount of specialized administrative work.
A good outside billing company may handle claim submission, payment posting, denial follow-up, aging claims, insurance calls, and reporting. Some also offer credentialing or eligibility verification, although those services are often priced separately as “add-ons”.
For a growing practice, this can remove a substantial amount of pressure from the owner. Outside billing services for mental health also tend to have built-in coverage across multiple staff members, so the work continues when one person is unavailable.
Quality varies quite a bit when it comes to outsourced medical billing and coding.
Some mental health billing services are highly proactive and know behavioral health well. Others seem focused mainly on getting claims out the door. That difference becomes obvious when claims start aging, or denials pile up.
When evaluating an outside billing service, I suggest asking “what happens after a claim fails?” and make your decision based on how they respond.
Other important questions to ask if you’re considering outsourcing billing: Who follows up on denials? How often are aging reports reviewed? Who handles appeals? Are patient balances included? Who deals with payer phone calls? What reporting will the practice receive each month? How easy is it to reach a real person when something starts looking strange?
Those answers tell you much more about the quality of the service than a polished website does.
Because an outside billing company handles protected health information on your behalf, it’s a HIPAA business associate, and you’ll need a signed business associate agreement (BAA) before sharing any client information.
How much does outsourced billing cost?
The mental health billing service cost percentage varies, although percentage-of-collections models are common. Medical billing companies often charge a percentage of collected revenue, and rates vary widely depending on volume, complexity, specialty, and the level of service provided, so ask for a written quote that spells out what’s included.
That mental health billing service cost percentage matters, but it needs context.
Imagine a practice collecting $100,000 per month. A 5% billing fee works out to $5,000. That can feel significant when written as a single expense line.
Now look at what the practice is receiving in return. A lower-cost service may only submit claims and post payments. A more comprehensive mental health billing service may also chase aging claims, work denials, appeal underpayments, follow up with payers, manage patient balances, and give the owner clear reporting on what is still outstanding.
The same issue comes up when billing is kept inside the practice. Owners often underestimate the cost of the hours they personally spend fixing billing problems. Eight hours a week on claims, insurance calls, and payment issues adds up quickly, especially when those hours could have gone toward seeing clients, supervising clinicians, recruiting, marketing, or simply leaving the office at a reasonable time. The time cost is worth calculating.
How does outsourced vs. in-house mental health billing compare?
When I think about outsourced vs. in-house mental health billing, I would start with the actual workload instead of the label.
How many clinicians are in the practice? How many claims are being submitted every month? How many different payers are involved? How often are claims denied? How much money is sitting unpaid past 30, 60, or 90 days? Who currently follows up on those claims?
A small group with a manageable insurance caseload and a strong internal administrator may be perfectly comfortable keeping billing in-house (fewer outside parties handling client information is a real plus).
A larger group may benefit from outsourcing billing services for mental health because the volume has become too great for the owner or office manager to oversee casually.
Some practices settle into a hybrid model. They keep certain financial and client-facing tasks in-house while outsourcing claims, denials, and insurance follow-up. That can work well too, especially when the practice wants to retain control over client communication while handing off the more technical payer work and insurance headaches.
The useful question is whether the current billing structure gives the owner a clear picture of where the money is.
How do you track unpaid claims?
Submitting a claim is only one moment in its life, and the most challenging part of billing is usually when something goes wrong. Whether billing stays in-house or goes to an outside company, I’d set up a weekly routine:
Review an aging report. Sort what insurers owe you by payer and by how long it has been unpaid, and start with anything past 30, 60, or 90 days.
Check for unbilled sessions. An appointment that never became a claim can’t be paid, and the filing clock keeps running.
Work denials right away. Note the payer’s deadline for corrections and appeals as soon as a denial arrives.
Match payments to what the insurer reported. Confirm that what the insurer says it paid is what the practice actually received.
In SimplePractice, the Outstanding claims report is an aging report of money owed by insurance companies, sorted by payer, and group practices can filter it by clinician. The Unpaid insurance appointments report lists appointments still waiting on payment, and the Claims filed snapshot on the Analytics dashboard shows claim statuses for any date range you choose.
With Insurance Navigator, an optional upgrade, Claim Assistant also suggests fixes for common rejections and denials.
As practice owners, we naturally pay attention to revenue, but I think accounts receivable deserves just as much attention.
A good billing professional, in-house or outsourced, is often worth paying for because in my experience they can recover enough revenue to cover their own cost. For my practice, it made sense to bring in billing help once I was seeing 100 clients per week.
Choosing billing services for mental health that fit your practice
I think this stress test is useful (because of course, we need more stress!): if the person handling billing disappeared tomorrow, would someone else know which claims were outstanding, which denials needed action, and what money had yet to be collected? It’s important that every practice owner knows where their business stands, even if they are outsourcing their billing support.
I also work with associates and enjoy teaching them the ins and outs of billing to prepare them for having their own practice one day. This also has an added benefit of making my practice more durable and ensuring processes run more smoothly.
If billing has been a reason you have avoided opening your own practice, take the plunge! There are supports out there, some automated with SimplePractice, and some available outside of your practice—and in my opinion, none of it is as scary as some people make it out to be.
Sources
Centers for Medicare & Medicaid Services. (n.d.). Billing and coding: Psychiatric diagnostic evaluation and psychotherapy services.
Centers for Medicare & Medicaid Services. (n.d.). Filing a claim.
Centers for Medicare & Medicaid Services. (2024). Marriage and family therapists and mental health counselors.
U.S. Department of Health and Human Services. (n.d.). Business associates.
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