The mental health program is set up in numerous complicated reimbursement structures. One treatment visit can include insurance eligibility, behavioral health coverage, prior authorization, provider credentialing, clinical documentation, procedure coding, claim submission, posting of payments and claim denial follow-up. If any of these steps are missed, the practice could suffer from delayed payments, avoidable denials, incorrect patient balances or even full loss of revenue.
RCM audit assesses the effectiveness of the management of these interrelated activities. It doesn't just focus on patient claims; it takes a look at the entire revenue cycle, from signing up patients to finalizing accounts.
Professional mental health practice audit services can uncover financial issues, problems with compliance, issues with payers and inefficient administrative processes in behavioral health organizations. A comprehensive audit offers leadership with evidence based findings and recommendations for improving revenue performance.
An RCM audit for mental health practices is not a mere administrative process for practices that have an increasing rate of denials, aging accounts receivable, inconsistent collections or rapid growth. It is a crucial financial and operational management tool.
What is an RCM audit for a Mental Health Practice?
RCM Audit is a detailed process of reviewing processes in the revenue capture, billing, collection, and reconciliation.
The audit tracks the financial lifecycle of a patient visit, from the scheduling of the visit through to payment of the insurance and patient balance.
A thorough review could consider:
Patient registration
Insurance eligibility verification
Checks for behavioral health benefits
Prior authorization management
The process of enrolling and credentialing providers.How providers are enrolled and credentialed.
Charge capture
Coding accuracy
Claim submission
Rejection correction
Payment posting
Denial management
Accounts receivable follow-up
Patient statements
Contractual adjustments
Credit balances
Financial reporting
The intent is to find out if the practice has a dependable system to move those clinical services into correct, timely reimbursements.
Why Mental Health Revenue Cycles Require Specialized Auditing
There are some rules in behavioral health billing that might not be identical to the rules of other specialties.
Each of the following types of services—such as psychotherapy, psychiatric evaluations, medication management, psychological testing, crisis services, family therapy, group therapy, and telehealth may have different requirements for documentation and billing.
Reimbursement will be based on:
The professional license number of the provider.
Network participation
Session duration
Medical necessity
Diagnosis
Authorization status
Treatment-plan requirements
Place of service
Telehealth rules
Payer-specific coding policies
One organization could also include psychiatrists, psychologists, counselors, social workers, psychiatric nurse practitioners, and other clinicians, as they might be all working in mental health practices. Enrollment and reimbursement requirements can vary by type of provider.
An effective RCM audit of a mental health practice is not just general revenue cycle performance, but also behavioral health-specific rules.
RCM Audits are used to uncover hidden revenue leakage.
Revenue leakage doesn't always manifest in the form of a denial. There can be several places in the billing process where practices can lose income without being aware of it.
Common sources include:
Events not billed
Charges that have been filed after deadlines have expired.
Incorrect contractual adjustments
Unworked rejected claims
Claims submitted from inactive providers
Missing authorization units
Payer underpayments
Uncollected patient balances
Incomplete denial appeals
Errors in payments to the correct account.
A practice might look like it is in good financial condition, but have significant revenue that is not billed or collected.
Professional mental health practice audit services compare clinical activity, billing records, payer responses and payment data to identify revenue lost, slowed or deducted inappropriately.
Identifying Issues in Patient Registration
The revenue cycle starts prior to the delivery of treatment. When users register with the wrong information, it could impact any step after registration, including billing.
An audit could examine if staff are recording:
Names and birth dates of patients
Insurance identification numbers
Subscriber information
Coordination-of-benefits details
Contact information
Guarantor information
Referral requirements
Consent and financial policy acknowledgements
A minor misspelling of the name on the claim could result in a claim rejection, a delay in eligibility determination or a payment credited to the wrong responsible party.
An RCM audit can help identify if the practice follows a consistent intake process and if registration errors are being resolved prior to the creation of a claim.
Assessing eligibility and verifying benefits
Mental health benefits may be provided in a manner different to that of general medical benefits. Active health insurance coverage does not equal the same requirements for the behavioral health network, deductible, authorization, or visit limits.
In evaluating the practice, auditors check if it verifies:
Active coverage
Behavioral health benefits
Provider network status
Copayments and coinsurance
Deductible amounts
Visit limitations
Referral requirements
Prior authorization
Telehealth coverage
Secondary insurance
There are often unnecessary denials and unplanned patient balances as a result of weak verification procedures. An audit ensures that benefit information is accurate, documented and communicated prior to the provision of services.
Reviewing Authorization Management
Prior authorization is a significant financial exposure issue for a lot of behavioral health organizations.
A payer can authorize a particular service, quantity of units, date of service, provider, or treatment location. Claims may be denied if the authorization is expired, approved units have been used up, or the service billed is not included in the authorization.
An audit examines the practice's record-keeping and monitoring systems by looking at:
Authorization numbers
Approved procedure codes
Effective dates
Expiration dates
Authorized units
Remaining visits
Provider limitations
Extension requests
The auditor can also determine if scheduling, clinical and billing teams are getting timely updates on authorizations.
Conducting Provider Credentialing and Enrollment
The claim could still be rejected if the provider is not enrolled or affiliated with the billing organization.
An RCM audit can be performed to verify:
Individual credentialing status
Group affiliations
Approved service locations
Effective dates
Taxonomy information
Relationships between people regarding billing and rendering.
Enrollment in Medicare or Medicaid.
Recredentialing deadlines
This review should be of special interest when practices expand by bringing on new clinicians, opening additional clinics, changing ownership, or entering new payer networks.
Denials about credentials sometimes do not end until the underlying payer record is fixed. Without addressing the enrollment problem, a claim that is submitted again does not provide a permanent solution.
Documentation and Coding Accuracy Assessment
Behavioral Health RCM Audit is a common part of an overall RCM audit.
The auditor reviews the selected claims and corresponding clinical documentation to see if the billed service is documented.
The review can include:
Procedure code selection
Diagnosis coding
Session duration
Provider signatures
Treatment plans
Medical necessity
Modifiers
Units of service
Add-on codes
Telehealth indicators
Place-of-service codes
Same-day services
In this way, this process can detect both overbilling and underbilling.
There's a trade-off between the potential coverage risk of unsupported billing and the potential revenue risk of undercoding or charges that are missed. The goal isn't to get the most money for the claims, it's to make sure the claims actually represent documentation of care.
Measuring Claim Submission Performance
Claim submission should be timely, accurate and measurable.
An audit assesses the length of time from the date of service to the date the documentation was completed, the date the charges were entered, and the date the claim was submitted. Long lead times can cause AR growth and risk of late filing.
Auditors may analyze:
Claim submission turnaround
First-pass acceptance rates
Clearinghouse rejections
Missing charges
Claim-edit effectiveness
Duplicate submissions
Filing deadline compliance
If you have a high rejection rate, it means there are issues with patient data, payer identification, provider enrollment, coding, or claim configuration.
Fixing the root cause is better than the repeated fixing of the same type of rejection.
Examining Denial Management
Denial management is a key component of an RCM audit in mental health practices.
The audit will identify if denied claims are classified, assigned, corrected, appealed and monitored to final resolution.
There are several common behavioral health denial reasons, such as:
Inactive coverage
Missing authorization
Provider not enrolled
Service not covered
Incorrect coding
Duplicate claims
Timely filing
Documentation requests
Coordination of benefits
Medical necessity
Invalid provider information
Denial trends are analyzed by payer, clinician, procedure code, location and cause.
A practice that processes denials on a claim-by-claim basis may be repeating the same errors. A thorough audit will be able to uncover systemic trends and the suggestions for preventative controls.
Analyzing Accounts Receivable Aging
Accounts Receivable Reports indicate the length of time claims and patient balances have been outstanding.
An audit reviews balances in aging categories such as:
0–30 days
31–60 days
61–90 days
91–120 days
More than 120 days
The older the balances, the more challenging they will be. Aging reports are not enough, though, to explain why payment is delayed.
Auditors review past claims to determine if claims are awaiting payment, if claims don't have the necessary documentation, if claims are denied with no appeal, if claims are filed improperly, or if the claims are no longer collectible due to late filing.
Professional mental health practice audit services distinguish between actionable balances and incorrect, duplicated or uncollectible balances.
Detecting Underpayments and Incorrect Adjustments
Receiving payment does not necessarily mean a claim was processed correctly.
Payers can use a wrong fee schedule, improperly lower reimbursement, set a wrong patient responsibility or take an adjustment that is not in accordance with the contract.
An RCM audit is a comparison of expected reimbursement and actual payment, and can uncover:
Underpaid claims
Incorrect contractual write-offs
Unexplained reductions
Improper bundling
Incorrect copayments
Missing payments
Recoupments
Posting errors
If this review isn't completed, you could receive underpayments as the billing system would close the claim and the process would seem paid.
Making patient balance management better
Patient payments are a growing component of practice revenues. The amounts for deductibles, copayments, coinsurance, and other services not covered are to be calculated and communicated correctly.
The audit can be conducted on the following:
Financial policy documentation
Point-of-service collections
Patient statement accuracy
Payment-plan procedures
Online payment options
Balance follow-up
Bad-debt adjustments
Credit balances and refunds
Effective financial communication and a respectful patient experience must be balanced in mental health practices. Rumors and mixed-up methods may lead to dissatisfaction and higher administrative calls.
Improving compliance and internal controls
RCM audits also assess if there are controls in place that minimise error, misuse and compliance risk in the practice.
Auditors may review:
Staff will be provided with access to billing systems.
Separation of duties
Payment adjustment authority
Refund procedures
Audit logs
Documentation policies
Record retention
Staff training
Vendor oversight
Reporting accountability
Good controls are used to safeguard financial information and to ensure that important decisions regarding financial transactions are recorded and examined.
Converting audit results to corrective measures
The worth of an audit is in the implementation of the outcomes.
In a professional report, the findings should be prioritized based on financial impact, compliance risk, frequency, and operational urgency.
Examples of corrective actions are:
Updating eligibility procedures
Creating authorization alerts
Improving provider documentation
Adjusting payers' enrollee records
Revising claim edits
Establishing denial categories
Training staff
Reviewing payer contracts
Reassigning follow-up responsibilities
Monitoring performance indicators
Each action should have an owner, a deadline and a measurable outcome.
A follow up review can measure if the denials, payment speed up and overall revenue cycle performance improved through the corrective plan.
Key Metrics to Monitor After an RCM Audit
Relevant performance indicators should be monitored after making recommendations to practice.
Important metrics include:
Days in accounts receivable
First-pass claim acceptance
Clean claim rate
Denial rate
Net collection rate
Charge-entry turnaround
Payment-posting turnaround
Claims that are more than 90 days old.
Authorization-related denials
Enrollment-related denials
The rate at which patient balances are collected.
Underpayment recovery
It's important to consider metrics in the context of a broader narrative and not just as individual numbers. Trends are used to show whether the corrective actions are creating positive trends.
Frequently Asked Questions
1. What is included in mental health practice audit services?
Mental health practice audit services come with a range of features.There are several features that come with mental health practice audit services.
2. How is a billing audit for behavioral health different from an RCM audit?
The services can encompass patient registration, eligibility, authorizations, credentialing, patient documentation, coding, claims, payments, denials, accounts receivable, patient balances, contracts, and internal controls.
3. What is the difference between a behavioral health billing audit and an RCM audit?
A typical billing audit concern will be on documentation, coding, and claim accuracy. An RCM audit will review all financial processes, from registration to eligibility, claim submission and posting, denials and collections.
4. How frequently should a mental health practice do an RCM audit?
Audit frequency will vary with practice size, claim volume, payer mix, growth, and past audit results. Review may be a good option when there are significant changes in staffing, technology, payers or operations.
5. Can an RCM audit help reduce claim denials?
Yes. An audit can uncover common causes of denials and workflow flaws which are causing them. These denials can then be avoided in subsequent claims through corrective actions.
6. Does an RCM audit review the underpayments from the payers?
This thorough audit will examine the differences between the actual and allowed reimbursements and will highlight any misappropriations, fee schedule issues and underpayments.
Conclusion
Claim submission is not enough for the mental health practice to keep a healthy revenue cycle. The accurate registration, verification of benefits, tracking of authorizations, provider enrollment, documentation, coding, payment reconciliation, denial management and patient collections all affect financial performance.
An RCM audit for mental health practices analyzes the interdependence of these functions and pinpoints areas of breakdown that are impacting reimbursement.
Professional mental health practice audit services provide leadership with a clearer understanding of revenue leakage, compliance exposures, aging claims, under payments and operational inefficiencies. A focused billing audit of behavioral health also verifies that clinical documentation and claims are representative of the care delivered.
Audits can be turned into measurable remediation measures, which can help practices to lower denials, enhance cash flow, enhance accountability, and create a more sustainable financial operation.
RCM audits can be helpful not just in a practice crisis. They play a key role in responsible financial management and future growth of behavioral health practices.
