Billing challenges for psychiatrists and how to solve them

Psychiatric billing looks simple from a distance. A patient is seen, a code goes out, a payment comes back. In practice, few specialties carry this much friction between the visit and the paycheck. Psychiatrists record time to the minute, justify medication management alongside psychotherapy in the same note, chase prior authorizations for drugs a patient needs that week, and work under telehealth rules that Congress has rewritten several times since 2020. The billing challenges for psychiatrists affect revenue, audit risk, and how fast patients get treated.

Psychiatry also carries almost no procedural revenue. A surgeon bills procedures that pay well regardless of note length. A psychiatrist’s income depends almost entirely on cognitive and time-based codes, so a small coding error repeats across the whole schedule. This guide breaks down the specific problems that drive denials, with the facts behind each one, and the practical steps that reduce them.

Why psychiatric billing is harder than most specialties

For years, psychiatrists billed with a narrow set of codes that described a session by type. That changed in 2013, when the American Medical Association rewrote the psychiatry section of Current Procedural Terminology (CPT). The revision deleted several long-standing psychiatry codes and moved the specialty toward the evaluation and management (E/M) framework used across the rest of medicine, paired with separate psychotherapy add-on codes.

That structure asks for more from the note. A psychiatrist who manages medication and provides therapy in one visit has to document two distinct services, each with its own time and its own clinical detail. Miss a piece, and the claim gets downcoded or denied.

Psychotherapy codes are also timed, which is unusual. The session length decides the code:

Session length	Standalone psychotherapy	Add-on billed with E/M
16 to 37 minutes	90832	90833
38 to 52 minutes	90834	90836
53 minutes or more	90837	90838

The diagnostic evaluation splits by whether medical services are part of it: 90791 without medical services, 90792 with. A billing team that does not know these thresholds will lose money on a large share of claims.

The most common billing challenges for psychiatrists

Time-based coding with thin documentation

Because the psychotherapy code depends on time, the total minutes (or the start and stop time) has to appear in the note. Auditors look for it first. When it is missing, a 60-minute session billed as 90837 can be cut to a lower code or rejected outright. 90837 draws extra attention from payers because it pays more than 90834 and is billed often, and some insurers have flagged heavy 90837 use for review. The protection is a note that records the time and the clinical reason the longer session was needed.

Pairing E/M with a psychotherapy add-on

Combining medication management with therapy is routine in psychiatry, and CPT allows both to be billed together: an E/M code plus a psychotherapy add-on (90833, 90836, or 90838). The catch is that the two services must be documented separately, and the minutes counted toward psychotherapy cannot also count toward the E/M code. This overlap is one of the most common reasons psychiatric claims fail an audit. The note has to draw a clear line between the medical work and the therapy.

Prior authorization delays

Prior authorization is one of the heaviest administrative loads in psychiatry, because many psychiatric medications and higher levels of care need advance approval, and step-therapy rules often force a patient to fail a cheaper drug first. The American Medical Association’s 2024 prior authorization survey, which polled 1,000 practicing physicians in December 2024, found that practices complete an average of 39 prior authorization requests per physician each week and spend about 13 hours processing them. In the AMA survey released in May 2026, 32% of physicians said requests are often or always denied, and 26% reported that prior authorization had led to a serious adverse event for a patient in their care. In psychiatry, a delayed approval can leave a patient without a medication that keeps them stable.

Telehealth rules that keep changing

Telepsychiatry grew quickly after 2020, and the billing rules have moved repeatedly since. Some flexibilities are now permanent for behavioral health. Medicare permanently allows patients to receive mental health services by telehealth in their homes with no geographic restriction, and audio-only mental health visits are a permanent part of Medicare policy when a patient cannot or will not use video.

Other pieces stay temporary and keep getting extended. Under the Consolidated Appropriations Act of 2026, Congress extended the broader set of Medicare telehealth flexibilities through December 31, 2027, and delayed the in-person visit requirement for most mental health telehealth until January 1, 2028. The Drug Enforcement Administration and the Department of Health and Human Services extended telehealth prescribing of controlled substances through December 31, 2026. Because these dates keep moving, any billing workflow built on last year’s assumption will eventually send claims under rules that no longer apply.

Low reimbursement and out-of-network pressure

Psychiatric services pay less than comparable medical services, which pushes more psychiatrists to leave insurance networks. A study by RTI International, published in 2026 and commissioned by the Mental Health Treatment and Research Institute, found that patients were 8.9 times more likely to see a psychiatrist out of network than to see a medical or surgical provider out of network. In-network office visit reimbursement was on average 22% higher for medical and surgical clinicians than for behavioral clinicians, and physician assistants were paid roughly 19% more than psychiatrists for office visits.

The gap is not new. An earlier report by Milliman, published in November 2019, found that 17.2% of behavioral health office visits in 2017 went to an out-of-network provider, compared with 3.2% for primary care. For a billing team, this shows up as more out-of-network claims, more patient balances to collect, and more appeals to write. Patients who go out of network also pay more from their own pockets, which raises the risk that the practice never collects the balance.

Parity gaps and shifting enforcement

The Mental Health Parity and Addiction Equity Act (MHPAEA), enacted in 2008, requires health plans to cover mental health and substance use treatment no more restrictively than medical and surgical care. Enforcement has been uneven. On September 9, 2024, the Departments of Labor, Health and Human Services, and the Treasury issued a final rule that would have added data-collection and comparison requirements to strengthen parity. On May 15, 2025, those same departments announced they would not enforce the 2024 rule, after the ERISA Industry Committee sued to challenge it in January 2025. The 2013 rule and the underlying statute still apply. Parity remains the law, but the newer requirements that would have pressured plans to pay behavioral providers fairly are paused.

Underused integrated care codes

Psychiatrists who consult with primary care teams often leave money on the table. Medicare pays for the Collaborative Care Model through codes 99492, 99493, and 99494, and for general behavioral health integration through 99484. These codes reimburse a psychiatrist’s consultative work when care is delivered together with a primary care physician and a care manager. Many practices never bill them, either because the workflow is unfamiliar or because the time-tracking feels like a burden. Setting up the tracking once opens a billable service that would otherwise go unpaid.

Incident-to and supervision errors

Practices that use nurse practitioners, physician assistants, or residents have to apply Medicare’s “incident to” and supervision rules correctly. Billing a mid-level provider’s service under a psychiatrist’s number without meeting the supervision conditions is a frequent compliance mistake, and it can become a repayment demand when a payer audits the chart.

How psychiatrists can solve these billing challenges

Most of these problems respond to process rather than new software. The steps below address the largest sources of lost revenue.

• Record time on every timed service. Write the total minutes, or the start and stop time, for psychotherapy, and note why a longer session was clinically necessary. This protects 90837 and the add-on codes during review.
• Separate the E/M and psychotherapy portions. When a visit includes both medication management and therapy, document them as two distinct services with distinct time, so the add-on code holds up.
• Verify benefits and authorization before the visit. Confirm coverage, check whether the specific medication or service needs prior authorization, and track expiration dates so treatment does not lapse.
• Give prior authorization to dedicated staff. The AMA found that 40% of practices already assign staff to work only on authorizations. A single point person cuts delays and denials.
• Keep a living telehealth reference. Maintain a short internal list of which telehealth rules are permanent and which have expiration dates, and update it whenever Congress or CMS acts.
• Bill the integrated care codes. If psychiatrists consult with primary care, set up the tracking for 99492, 99493, 99494, and 99484 so that work is paid.
• Audit your own claims monthly. Review a sample of paid and denied claims to catch patterns, such as repeated 90837 downcoding, before a payer’s audit finds them.
• Sort denials by reason and appeal. Group denials into categories (missing time, authorization, eligibility, coding), fix the largest source first, and appeal denials that the documentation supports.

For students moving into medical billing and coding, psychiatry is one of the harder specialties to learn, precisely because it combines timed codes, E/M rules, add-on logic, and payer and government policy that changes from year to year. Learning to read a psychiatric note for billable time, and to tell when E/M and psychotherapy are properly separated, is a skill that leads to steady work.

The billing challenges for psychiatrists come down to three things: documentation discipline, current knowledge of payer and government rules, and consistent follow-up on denials and authorizations. Practices that record time accurately, separate their services cleanly, check coverage before the visit, and appeal wrong denials collect more of what they earn. The rules around telehealth and parity will keep shifting, so the practices that track those changes and adjust their workflow are the ones that keep denials down.