Insurance Billing for Therapists: Complete 2024 Guide
How to navigate insurance billing, credentialing, and claims processing as a therapist
Published: October 31, 2025
Accepting insurance can significantly increase your practice's client flow and revenue stability. However, insurance billing and credentialing can be complex and overwhelming for many therapists. This comprehensive guide breaks down everything you need to know about insurance billing for therapy practices, from getting credentialed with insurance panels to filing claims and getting paid.
Whether you're starting a new practice or transitioning from self-pay to accepting insurance, this guide provides step-by-step instructions and best practices to navigate insurance billing successfully.
Should You Accept Insurance?
✅ Pros of Accepting Insurance
- Increased client flow and caseload stability
- Access to more diverse client populations
- Predictable, consistent income from insurance panels
- Reduced financial burden on clients
- Ability to help more people access mental health care
- Professional credibility and marketability
❌ Cons of Accepting Insurance
- Reduced reimbursement rates compared to self-pay
- Complex credentialing and documentation requirements
- Time-intensive claims processing and follow-up
- Potential delayed payments (30-90 days)
- Pre-authorization and utilization review requirements
- Less autonomy in treatment decisions
Many successful practices use a hybrid model: accept insurance for steady client flow while maintaining some self-pay slots for higher revenue. Consider your financial goals, values, and target client population when deciding whether to accept insurance.
The Insurance Credentialing Process
Getting credentialed with insurance panels is the first step to accepting insurance clients. The process typically takes 30-120 days and requires the following:
📋 Credentialing Requirements
- Licensure: Current, active license in good standing
- Malpractice Insurance: Minimum $1M/$3M coverage
- NPI Number: National Provider Identifier from CMS
- Tax ID: Federal EIN or SSN for sole proprietors
- CAQH Profile: Universal Credentialing DataSource profile
- Professional References: Typically 3-5 professional references
- Work History: Complete employment and education history
- Location Information: Office address, phone, fax
- Banking Information: For electronic funds transfer (EFT)
Start by applying to major insurance panels in your area: Blue Cross Blue Shield, UnitedHealth, Aetna, Cigna, and Humana are typically the largest. Consider regional Medicaid and Medicare Advantage plans as well.
Understanding Insurance Billing Codes
Therapy services are billed using Current Procedural Terminology (CPT) codes. Understanding these codes is essential for accurate billing.
| CPT Code | Service | Duration |
|---|---|---|
| 90837 | Psychotherapy, 60 minutes | 50-60 minutes |
| 90834 | Psychotherapy, 45 minutes | 38-52 minutes |
| 90847 | Family psychotherapy | Varies |
| 90846 | Couples psychotherapy | Varies |
| 90833 | Psychotherapy + E/M service | Varies |
Important: Use the correct CPT code that matches your actual session length. Inaccurate coding can lead to claim denials or even fraud allegations.
The Insurance Billing Process
Step-by-Step Billing Workflow
- Verify Coverage: Check client's insurance eligibility and benefits before first session
- Obtain Authorization: Some insurance plans require pre-authorization for mental health services
- Provide Session: Conduct therapy session and complete documentation
- File Claim: Submit claims electronically within payer-specific deadlines (typically 90 days)
- Track Claims: Monitor claim status and follow up on pending or denied claims
- Post Payment: Record insurance payments and adjustments
- Bill Client: Collect copayments, deductibles, or coinsurance from clients
- Follow Up: Resolve denials, submit appeals when necessary
Insurance billing requires attention to detail and persistence. Many claims are initially denied but approved upon resubmission. Consider using electronic claims software to streamline the process.
Common Insurance Claim Denials and How to Avoid Them
❌ Missing or Incorrect Information
Claims with missing or incorrect client information, dates, or CPT codes are automatically denied. Double-check all claim data before submission.
❌ Services Not Covered
Verify client benefits before each service. Some insurance plans don't cover certain types of therapy or have session limits.
❌ Lack of Medical Necessity
Insurance requires documentation showing that therapy is medically necessary. Ensure your documentation clearly outlines the client's mental health condition and treatment plan.
❌ Timely Filing
File claims within the payer's timely filing window (typically 90-180 days). Late-filed claims are usually denied automatically.
❌ Duplicate Billing
Avoid billing the same service multiple times. Double-check that each service is only billed once.
How PracFlow Simplifies Insurance Billing
Manual insurance billing is time-consuming and error-prone. PracFlow automates the process and reduces billing errors.
Insurance Billing Features in PracFlow
- Electronic Claims Submission: Submit claims electronically to all major payers
- Insurance Verification: Automatically verify client benefits before sessions
- Claim Tracking: Track claim status in real-time
- Automatic Follow-Up: Automated reminders for pending or denied claims
- Patient Statements: Generate and send patient statements for copays and deductibles
- ERA Processing: Automatic posting of electronic remittance advices
- Denial Management: Easy identification and resolution of denied claims
- Reporting: Detailed reports on collections, outstanding claims, and payer mix
By automating insurance billing with PracFlow, you can focus on providing therapy while ensuring claims are submitted correctly and on time. This reduces administrative burden and improves cash flow.
Tips for Successful Insurance Billing
💡 Best Practices
1. Verify Benefits Before Every Session: Insurance benefits can change. Always verify client eligibility before providing services.
2. Submit Claims Promptly: File claims within 24-48 hours of service. This improves cash flow and reduces the risk of timely filing denials.
3. Monitor Outstanding Claims: Check on claims that haven't been paid within 30 days. Follow up with payers regularly.
4. Document Thoroughly: Strong documentation supports claims and helps avoid medical necessity denials.
5. Consider a Billing Service: For high-volume practices, consider hiring a professional billing service to handle claims.
Streamline Your Insurance Billing
PracFlow automates insurance billing so you can spend less time on paperwork and more time with clients. Start accepting insurance clients today.