Behavioral health exists in a strange middle ground. Payers often treat mental health and substance use services differently than medical services, even though federal parity laws — specifically the Mental Health Parity and Addiction Equity Act (MHPAEA) — require that coverage for mental health and substance use disorders be no more restrictive than coverage for medical/surgical conditions when those benefits are offered.medicaid+1
In practice, that can mean closer scrutiny of behavioral health claims, more frequent requests for documentation, and aggressive utilization management, especially at higher levels of care like IOP and PHP. If you're running an IOP or PHP, it's reasonable to expect prior authorizations, concurrent reviews, and appeals to be a regular part of your operations — not rare exceptions.cms+2
The Core CPT Codes You Need to Know
CPT and HCPCS codes are the language of insurance reimbursement. For behavioral health providers, especially those running IOP and PHP programs, a handful of codes do most of the heavy lifting.cms+1
Individual Therapy Codes
90837 — 60-minute individual psychotherapy session. CMS defines 90837 as psychotherapy of 53 minutes or more with the patient, and it is one of the most commonly used outpatient psychotherapy codes. Actual reimbursement varies by payer and geography, so think of typical dollar amounts as ranges rather than guarantees.cgsmedicare+1
90834 — 45-minute individual psychotherapy session (38–52 minutes with the patient). Useful when sessions run shorter, but don't default to this just to move faster — if clinical need truly warrants a longer session, your documentation should support using 90837.cms+1
90832 — 30-minute psychotherapy session (16–37 minutes). Often used for shorter, focused encounters; it is less commonly used as the primary code for ongoing, full-length therapy in many outpatient practices.cgsmedicare+1
Group Therapy Codes
90853 — Group psychotherapy (other than family). This is the primary code for many IOP group sessions and is billed per patient, per session, which is what makes group-based programs financially viable. One 90-minute group with 10 patients typically generates 10 units of 90853, assuming documentation and time requirements are met for each patient.[cms]
H0015 — HCPCS code for alcohol and/or drug services, intensive outpatient services. Many commercial insurers and Medicaid programs use H0015 for substance use disorder–specific IOP services, with payment often structured per diem or per hour according to the payer’s policy.[macpac]
PHP and IOP-Specific Codes
S9480 — Intensive outpatient psychiatric services, per diem. Not all payers accept this code; some require H0015 or a combination of individual CPT codes instead, which is why checking each payer’s coverage and coding policy before admission is essential.[macpac]
H2014 — Skills training and development, per 15 minutes. Frequently used in Medicaid programs for certain rehabilitative or skills-focused services, depending on the state’s covered benefits and definitions.[macpac]
One of the most expensive billing mistakes IOP/PHP programs make is using a single code structure across all payers. UnitedHealthcare, Aetna, Cigna, and Medicaid plans often have different preferred code sets, coverage policies, and reimbursement methodologies. Your billing team needs payer-specific fee schedules and coverage rules, not a one-size-fits-all approach.[macpac]
Documentation: The Foundation of Every Clean Claim
You can use the right code and still get denied if your documentation doesn't support medical necessity. Payers aren't just checking that you did the service — they're checking that the service was clinically justified, consistent with the level of care, and delivered as billed.[cms]
For IOP/PHP levels of care, medical necessity criteria from payers and accrediting bodies typically require documentation that a patient has:[macpac]
A diagnosable mental health or substance use disorder driving clinically significant functional impairment.
A treatment plan with measurable goals, timeframes, and specific interventions.
Progress notes demonstrating active participation and clinical response (or lack of response that supports continued care).
A discharge or step-down plan with clear criteria.
Every group note should be individualized. Generic language like “patient participated in group” is a common red flag in audits and may not support the level of care or intensity billed. Document what each patient said, contributed, struggled with, or gained — even if it’s just 2–3 sentences — so that a reviewer can see why the service was medically necessary for that person.[cms]
Credentialing and Contracting: You Can't Bill Without This
Credentialing is the process of getting approved to bill a specific insurance company under your NPI, and it is required before you can be recognized as an in-network provider. It is tedious and slow — many payers describe timelines of roughly 90–180 days from application to being fully credentialed, especially for new providers and facilities.[macpac]
For a new IOP or PHP program, it usually makes sense to prioritize credentialing with the commercial payers that dominate your local market — often a Blue Cross Blue Shield plan, UnitedHealthcare, Cigna, and Aetna — and then address Medicaid and other plans based on your target population. Medicaid credentialing timelines and requirements vary considerably by state, with some relying on managed care organizations that each have their own processes.[macpac]
One often-overlooked issue: credentialing is tied to individual clinicians and, in many cases, the facility, not just the program name. If your program employs licensed therapists who aren't credentialed with a payer, those services generally cannot be billed to that payer under their own NPIs, and any “incident-to” or supervised billing approaches must follow payer-specific and state-specific rules. When in doubt, it’s wise to confirm expectations with the payer and, for complex arrangements, with legal counsel.[macpac]
Common Billing Errors That Trigger Audits
Insurance audits are a real risk, particularly for programs billing higher levels of care and higher-dollar services. CMS has reported improper payment rates for outpatient psychiatric care and related behavioral health services tied to documentation and coding errors, which underscores how closely these claims are watched.[aapc]
Some of the errors that commonly flag programs for review include:
Upcoding — Billing for a higher level of service than what was documented, such as billing PHP or 90837 when the record supports a lower intensity or shorter session. In Medicare and Medicaid, knowingly upcoding can be considered fraud and expose providers to overpayment demands, penalties, and other enforcement actions.aapc+1
Unbundling — Billing separately for services that should be billed together under a single comprehensive code, contrary to payer rules or CPT/HCPCS guidance. For example, billing multiple separate services when a payer’s policy clearly defines a per diem code that includes those components can trigger denials and recoupments.[cms]
Lack of prior authorization documentation — Many commercial payers require prior authorization for IOP/PHP and other intensive services; failure to obtain or document authorization is a frequent basis for denial. Keeping authorization numbers and approval periods clearly tied to each date of service is essential.[macpac]
Missing or late progress notes — Payers, including Medicare, expect that records accurately reflect the services billed and are completed close in time to the encounter. Notes written long after the fact are a common audit red flag and can undermine the credibility of the claim, sometimes leading to repayment demands even if the service was provided.aapc+1
Maximizing Reimbursement Without Cutting Corners
The goal isn't to game the system — it's to capture every dollar you legitimately earned. Most programs leave money on the table in a few predictable ways.
Verify benefits before admission, not after. A short benefits verification step before a patient starts can prevent large blocks of denied claims by surfacing issues like limited behavioral health benefits, high deductibles, or out-of-network restrictions upfront. Knowing the deductible, out-of-pocket maximum, behavioral health benefit structure, and prior auth requirements before day one makes it much easier to set expectations and avoid surprises.[macpac]
Appeal denied claims systematically. Across healthcare, improper payment and denial patterns have been documented in behavioral health and psychiatric services, but many denials are reversible when providers submit clear clinical documentation and follow payer appeal processes. Instead of writing off denials, build a routine for reviewing denial codes, gathering supporting records, and submitting timely, focused appeals.[aapc]
Track your denial reasons. If you're consistently getting denials for “not medically necessary” from one payer, that's usually a documentation or level-of-care issue. If you're getting denials for “procedure not covered” or “noncovered service,” that's more often a contracting or benefit design problem. Categorizing denials by reason gives you a roadmap for whether to fix clinical documentation, front-end authorization processes, coding, or payer negotiations.[aapc]
FAQ: Behavioral Health Billing and Coding
What CPT codes are used for IOP billing?
The most common codes for IOP billing are 90853 (group psychotherapy), 90837 (individual psychotherapy for 53+ minutes), and H0015 for intensive outpatient substance use services, though exact codes depend on the diagnosis, service mix, and payer policy. Some payers may require alternative HCPCS codes or per diem structures for IOP, so always check each plan’s coverage rules.cms+1
How do I get credentialed with insurance companies for a new behavioral health practice?
Most clinicians start by completing a thorough provider profile (often through CAQH or a similar centralized system) and then submitting credentialing applications to each payer they want to join. Because many plans take 90–180 days to complete credentialing, it’s smart to begin well before your program opens.[macpac]
What is the reimbursement rate for PHP and IOP programs?
Reimbursement rates for PHP and IOP vary widely by payer, state, and contract, and there is no single “standard” amount. Many programs see PHP reimbursed at a higher per diem than IOP, but the exact dollar figures depend on negotiated rates with each payer.[macpac]
What's the difference between billing for PHP vs. IOP?
PHP (Partial Hospitalization Program) typically involves a higher intensity of services — often 20 or more hours of structured clinical care per week — and is billed at specialized per diem rates defined by Medicare and commercial payers. IOP generally requires at least 9 hours per week, with many programs operating between 9–20 hours, and uses a mix of per diem codes, hour-based HCPCS codes, and psychotherapy CPT codes depending on payer policy.[macpac]
Can unlicensed clinicians bill insurance?
In many states and under many payer contracts, unlicensed or pre-licensed clinicians cannot independently bill commercial insurance and must work under the supervision of a licensed clinician whose credentials are used for billing. Because rules vary by state, payer, and product line (commercial, Medicare, Medicaid), it’s important to confirm requirements directly with each payer and, when needed, with legal counsel.[macpac]
How long does it take to get paid after submitting a behavioral health claim?
Clean electronic claims to commercial payers commonly process within about 14–30 days, while Medicaid and some other public programs may take longer depending on the state and managed care structure. Denials, missing documentation, and appeals can easily stretch that timeline past 60–90 days, which is why strong front-end billing and documentation processes are so important.aapc+1
ForwardCare is a behavioral health MSO (Management Services Organization) that partners with clinicians, sober living operators, healthcare entrepreneurs, and investors to launch and scale behavioral health treatment centers. We handle the business side — licensing support, insurance credentialing, billing, compliance, and operational infrastructure — so our partners can focus on growth and clinical quality.
If you’re serious about opening or expanding a behavioral health treatment center but don’t want to navigate the business side alone, ForwardCare may be worth a conversation.