Mastering Carve-outs and Visit Limits in Behavioral Health Billing

Carve-outs occur when a payer excludes a specific service or provider from a patient's coverage plan, requiring the practice to bill a different payer or seek reimbursement through other means. For example, a patient may have a primary insurance plan that covers medical services, but their behavioral health services are carved out to a separate plan. In this scenario, the practice must bill the correct payer for the behavioral health services or face a denial. The relevant denial code may be CO-50, indicating the service is not covered or not medically necessary.

To avoid this, practices should verify patient eligibility and coverage before admitting them to a program and ensure they are billing the correct payer for each service. They must also comply with the terms of the carve-out agreement, which may involve obtaining prior authorization for certain services or meeting specific documentation requirements. Failure to comply can result in a denial, requiring the practice to appeal the decision. For instance, if a practice fails to obtain prior authorization for a patient's intensive outpatient program (IOP), the payer may deny the claim, citing the relevant denial code.

Visit limits are another common cause of denials in behavioral health billing and can be challenging to navigate. The most common visit limit denial codes are CO-45, indicating a contractual adjustment, and CO-197, indicating that the prior authorization is absent or invalid. For example, if a patient has exceeded their visit limit for a particular service, the payer may deny the claim, citing CO-45.

To avoid this, practices should track patient visits accurately and obtain prior authorization for any services that require it. The CPT code for IOP services, H0015, may be relevant in this scenario, as payers often have specific requirements for billing these services. Practices must also comply with the terms of the visit limit agreement, which may involve meeting specific documentation requirements or providing additional information to support the claim. Failure to comply can result in a denial, requiring the practice to appeal the decision.

Preventing carve-out and visit limit denials requires verification, tracking, and compliance. Practices should verify patient eligibility and coverage before admitting them to a program and ensure they are billing the correct payer for each service. They should track patient visits accurately and obtain prior authorization for any services that require it. By complying with the terms of the carve-out and visit limit agreements, practices can reduce the risk of denials and ensure accurate reimbursement for their services.

For example, a practice may use a billing software to track patient visits and verify eligibility or hire a dedicated billing staff to ensure compliance with payer requirements. Staying up-to-date with the latest payer requirements and regulations is also crucial. This may involve attending training sessions or webinars, or subscribing to industry newsletters and publications. By staying informed, practices can reduce the risk of denials and provide the best possible care for their patients.