Skip to main content

For behavioral health practices, transitioning to in-house billing for mental health services can be extremely beneficial. In-house billing can boost efficiency, reduce spending, improve revenue streams, and simplify compliance—even with ever-evolving regulations.

Many providers outsource their billing, especially if they believe they simply don’t have the bandwidth to manage it themselves. But practices that switch to in-house billing gain greater control over their own revenue cycle. Real-time visibility into billing performance metrics, revenue trends, and cash flow dynamics lets practices identify areas for improvement, address discrepancies promptly, and make better-informed financial decisions.

Making the transition may involve some initial hurdles, but in-house billing is a compelling option for many behavioral health practices. Declining reimbursement rates and increasing administrative burdens and fees from third-party payers are driving some practices to handle their own billing operations. Here are some things to consider before making the switch:

Assessing Readiness for In-House Billing

Because so many aspects of running a practice tie back to billing, it’s important for a practice to thoroughly consider the impacts and the preparation needed. The up-front financial considerations include adequate staffing, suitable technology, and the necessary training. Prioritizing good communication with patients is another important consideration that also impacts the staffing, technology, and training needed.

Robust mental health billing software, such as the features of a specialized electronic health record (EHR), is critical for any practice interested in bringing billing in-house. Rejected claims happen, but a software that simplifies claim creation, and that offers in-depth reporting features to back up the claims submitted, can reduce both claim denials the time spent on resubmitting or appealing denials. As you’re considering in-house billing vs. outsourcing, identify any areas for improvement.

Planning and Preparation

A smooth transition is only possible with a carefully thought-out plan.

  • First, conduct a detailed analysis of existing billing processes and workflows. What inefficiencies exist? What areas can be improved?
  • Next, identify key stakeholders and create a dedicated transition team. This team will need to work together to make sure everyone’s objectives are identified and addressed.
  • Then, identify a realistic timeline and a realistic budget. Rather than rush, plan far enough out that your team can minimize the disruptions to the practice’s daily operations and needs.

As you plan, consider factors such as the complexity of services offered, the size of your practice, the skill level of existing staff, and the suitability of your existing technology.


Mental Health Billing – What Every Therapist Needs to Know

Read More

Leverage Your EHR To Grow Your Thriving Practice

Learn More

Staff Training and Skill Development

Obviously, staff training is critical for the successful implementation of in-house billing. Training should focus not just on the nuances of mental health billing processes, but also on helping staff become advanced users of the practice’s EHR software. In-depth knowledge of the EHR will help your team not only ensure adequate recordkeeping, but also help them be able to answer patient questions as they arise.

Ongoing support and resources empower staff to develop their skills further, and help them stay comfortable with adapting to changing regulatory needs. Training is not a one-time event, but an ongoing process. Fostering a culture of continuous improvement equips practices to tackle challenges. All personnel who deal with billing should be trained to identify and troubleshoot issues independently. These issues could include:

Reading relevant case studies can help staff learn how to apply their knowledge to a wide range of real-world scenarios.

Training sessions should cover the steps involved in the billing cycle, from verifying patient insurance coverage to submitting claims to following up on denials. Training should also emphasize the importance of maintaining patient confidentiality and accurately documenting services provided.

Implementing In-House Billing Processes for Mental Health Services

After reviewing existing procedures, developing standardized workflows can improve how processes, billing systems, and practice management all work together. Rigorous testing can ensure the accuracy and efficiency of these interactions.

Streamlining processes can minimize errors and reduce billing cycles, optimizing revenue capture. Processes can also be refined over time. Staying agile is important for any practice in a field such as behavioral health, where changing regulations and market dynamics can have a big impact.

Billing for mental health services often involves nuanced diagnoses and treatments, requiring accurate coding and detailed documentation. Insurance reimbursement can be unpredictable, as frequent changes in coverage policies and reimbursement rates can lead to difficulties in verifying patient eligibility, obtaining authorizations, resolving claim denials, and more. Collaboration between clinical teams and billing staff can help address these challenges.


How to Successfully Negotiate with Payers for Increased Reimbursement Rates

Watch Webinar

Starting Your New Practice

Private Practice Business Plan Template

Learn the benefits of developing a private practice business plan and download a free template.

Monitoring and Optimization

Clear protocols and guidelines make teamwork easier for all staff members who have any responsibilities associated with billing. Monitoring and optimizing in-house billing operations involves identifying and tracking billing performance metrics and key performance indicators (KPIs). According to guidance from the Healthcare Financial Management Association (HFMA), these can include:

  • Average daily revenue
  • Days to final bill
  • Late charges as a percentage of total charges
  • Initial denial rate and denial recovery rate

Tracking and trending metrics over time allows your practice to identify areas for improvement and ways to implement process enhancements. With a well-trained staff, a practice will see accurate and timely claims processing, reduced billing errors, and even increased patient satisfaction. When billing is handled in-house, patients can get direct answers to questions about their insurance coverage, billing statements, payments options, and more.

Overcoming Challenges and Addressing Issues

Transitioning to in-house billing is not without its challenges. Staffing shortages or turnover can disrupt billing operations, especially at smaller practices. Disruptions can mean billing errors or delayed claims processing. Disruptions can also impact patients. For these reasons, recruiting and retaining skilled staff is a priority.

In addition, integrating billing functions with existing IT infrastructure can pose hurdles. Even if a practice chooses a tailored EHR, customizations and data migrations can take time. Personnel may need to learn to navigate new software platforms and overcome other technical obstacles.

The intricacies of billing for mental health services involve staying on top of evolving regulatory requirements and changing payer policies. Coding errors, documentation deficiencies, or improper claims submissions can lead to everything from claim denials to audits or legal liabilities. Maintaining compliance and following industry best practices help mitigate risk and uphold the integrity of billing operations.


Outsourcing something as foundational as billing leaves many important variables out of a practice’s hands. Bringing billing processes in-house gives behavioral health practices greater control and oversight of their revenue cycle. Practices can then minimize billing errors and claim denials, as well as accelerate reimbursement cycles. Transitioning to in-house billing for mental health services is a strategic decision that requires skilled planning, training, and management, but it can position practices for long-term success.

While there may be initial investments needed in staffing, training, and technology, in-house billing can lead to substantial cost savings. By navigating common challenges successfully, practices can complete the transition to in-house billing, optimize financial performance, and ultimately have the resources to deliver even better care to patients.