5 Tips for Optimizing the Revenue Cycle for Mental Health Practices

As a mental health professional, you've dedicated your career to helping people improve their well-being and overcome challenges. However, running the business side of a mental health practice can be just as critical to your success. One of the most crucial aspects of this is managing your revenue cycle effectively. This is not just about financial health, but also about ensuring a steady stream of revenue that allows you to continue providing high-quality care to your patients.

The revenue cycle encompasses all the processes involved in receiving payment for the services you provide - from scheduling appointments to billing insurance and collecting patient balances. Optimizing this cycle is key to ensuring your practice has a steady stream of revenue coming in.

Ready to boost your mental health practice's revenue cycle? Here are 5 power-packed tips to help you streamline and strengthen it:

1. Verify Insurance Eligibility and Benefits. Before seeing a new patient, verify their insurance coverage and understand their plan details, including any required pre-authorizations, copays, deductibles, and any treatment limitations. This upfront work helps you collect the right amount from the patient at the time of service and avoid claim denials down the line. Insurance verifications are especially important for therapists and counselors who often see patients weekly. If you see a patient four times and then find out the claims are processing to their deductible, your patient now has a huge bill. Insurance verifications help you avoid surprises and let your clients know what their cost share will be upfront so you get paid and don't end up trying to collect large balances.
2. Use Auto Pay features to collect client payments. If you rely on your memory to collect copayments, coinsurance, deductibles, and self-pay payments, you're likely going to forget to charge someone for their session. Using the Auto Pay feature in your EHR to automatically charge clients on the same day as their session ensures you're collecting payments timely and your clients will appreciate knowing when they'll be charged. Stay on top of billing and collections by developing efficient billing practices, including sending patient invoices promptly and following up on outstanding balances. Consider outsourcing your billing to a specialized mental health billing service (like Behavioral Practice Partners).
3. Develop and Communicate Strong Practice Policies. Developing and communicating strong practice policies is the key to developing professional relationships with your clients. Your practice policies set expectations around patient conduct, how much notice is required for canceling appointments, and what it will cost them for not showing up to appointments. In addition to having patients sign practice and privacy policies during registration, you should verbally discuss your policies in your first session to ensure understanding. Having your practice policies signed in writing and discussing them verbally reduces the number of late cancels and no-shows and sets your client relationship up for success.  It's also a best practice not to see clients without them completing their patient registration. It's essential for private practices to ensure they have all the information they need to successfully bill clients and their insurance for revenue cycle optimization.
4. Leverage Telehealth and Other Technology. The COVID-19 pandemic accelerated the adoption of telehealth for mental health services. Virtual care platforms like SimplePractice can streamline scheduling, documentation, and billing processes. Some insurances cover telehealth visits at 100% which is a great benefit to patients. SimplePractice also provides a patient portal, which can improve the revenue cycle by offering easy ways for patients to communicate and pay their bill.
5. Monitor Key Metrics. Track important revenue cycle metrics such as days in accounts receivable, claim denial rates, and patient collections. Regularly reviewing these KPIs can help you identify problem areas and opportunities for improvement.

By focusing on these five revenue cycle best practices, you can help ensure your mental health practice operates as efficiently and profitably as possible. This, in turn, allows you to focus on providing high-quality care to your patients.