The Coding Complexities of Mental Health

The key is to focus on capturing everything relevant to a patient’s condition.

As we observe Mental Health Awareness Month this May, what better time to discuss some common trends and challenges associated with mental health and behavioral health coding?

The key to behavioral health coding is to focus on capturing everything relevant to a patient’s condition – whether an underlying medical condition, a substance abuse disorder on top of a psych diagnosis or dual diagnosis, or history codes indicating issues such as trauma and stress.

Those history codes are key, and some may be hesitant to capture so many Z codes, but it helps tell the story of the patient’s overall mental and physical health – and I have seen them be helpful in arguing some denials as well. Doing so really makes you feel like you are a patient advocate contributing to the patient’s ability to achieve access and receive adequate care, and ensuring that your facility gets properly reimbursed so it can continue to provide that care. So you have to navigate the applicable rules to make sure nothing is left on the table.

Everyone knows that mental health disorders are not often seen as a visible sign on the surface, as you might encounter with other medical conditions, so behavioral healthcare is very verbose, heavy on the conversation between a psychiatrist, psychologist, or therapist and the patient (and often times, their families, too). This is crucial to identifying an accurate diagnosis. But with this dialogue-heavy specialty, we also need very good documentation to support each level of care, and proper reimbursement.

Telehealth, or “telepsych,” has been really beneficial during COVID, and it helps address the crucial accessibility factor in behavioral healthcare. As coders, we need to make sure to provide feedback to those documenting for specificity in diagnoses; sometimes they want to throw around a bunch of nonspecific or “possible” diagnoses, so we want to provide good documentation guidance by using the coding guidelines for education to help them document more clearly.

Switching gears to inpatient psych coding, I often hear of coders struggling to bridge the gap between general acute-care coding with MS-DRGs and the inpatient psych facility payment system. And it’s not just coders who need to educate themselves on these rules; the billing team needs to fully understand how to capture the Inpatient Psychiatric Facility Prospective Payment System (IPF PPS) adjustment factors on the bill. On the CMS.gov website, you can download the current list of adjustment comorbidities and keep it handy – and of course, download the latest version annually, once the final rule is published. I want you to take special notice of some of the common comorbidities on the list, such as eating disorders, chronic conditions such as COPD, substance abuse or dependence disorders, and poisonings due to suicide attempts. A key example of something commonly missed is nicotine dependence with withdrawal: this has a significant adjustment factor of up to 1.03 times the normal expected reimbursement rate. So missing the documentation supporting the withdrawal or failing to code this properly will definitely result in less reimbursement. So again, work closely with your physicians to make sure they take those diagnoses to the highest specificity to avoid leaving hundreds of dollars of reimbursement on the table. If you don’t have a clinical documentation integrity (CDI) program for psych, it’s a good idea to at least take some of the concepts and put a process in place for education and queries at a minimum. And also, that education has to be provided to the billing team, so they can check the appropriate boxes on the bill. Someone should audit that regularly to make sure what you expected to get reimbursed is actually received.

Hopefully this small bit of information is helpful in continuing to ensure our communities can adequately care for and be reimbursed for behavioral health and substance abuse patients. This care specialty should be just as accessible to patients as other specialties, without the stigma, and we should continue advocating for this patient population – this Mental Health Awareness Month and always.

Facebook
Twitter
LinkedIn

Related Stories

You Down with CfC?

You Down with CfC?

Anyone who has worked within the scope of hospital case/utilization management for any period of time has heard of the Centers for Medicare & Medicaid

Read More

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

Mastering Principal Diagnosis: Coding Precision, Medical Necessity, and Quality Impact

Mastering Principal Diagnosis: Coding Precision, Medical Necessity, and Quality Impact

Accurately determining the principal diagnosis is critical for compliant billing, appropriate reimbursement, and valid quality reporting — yet it remains one of the most subjective and error-prone areas in inpatient coding. In this expert-led session, Cheryl Ericson, RN, MS, CCDS, CDIP, demystifies the complexities of principal diagnosis assignment, bridging the gap between coding rules and clinical reality. Learn how to strengthen your organization’s coding accuracy, reduce denials, and ensure your documentation supports true medical necessity.

December 3, 2025

Proactive Denial Management: Data-Driven Strategies to Prevent Revenue Loss

Denials continue to delay reimbursement, increase administrative burden, and threaten financial stability across healthcare organizations. This essential webcast tackles the root causes—rising payer scrutiny, fragmented workflows, inconsistent documentation, and underused analytics—and offers proven, data-driven strategies to prevent and overturn denials. Attendees will gain practical tools to strengthen documentation and coding accuracy, engage clinicians effectively, and leverage predictive analytics and AI to identify risks before they impact revenue. Through real-world case examples and actionable guidance, this session empowers coding, CDI, and revenue cycle professionals to shift from reactive appeals to proactive denial prevention and revenue protection.

November 25, 2025
Sepsis: Bridging the Clinical Documentation and Coding Gap to Reduce Denials

Sepsis: Bridging the Clinical Documentation and Coding Gap to Reduce Denials

Sepsis remains one of the most frequently denied and contested diagnoses, creating costly revenue loss and compliance risks. In this webcast, Angela Comfort, DBA, MBA, RHIA, CDIP, CCS, CCS-P, provides practical, real-world strategies to align documentation with coding guidelines, reconcile Sepsis-2 and Sepsis-3 definitions, and apply compliant queries. You’ll learn how to identify and address documentation gaps, strengthen provider engagement, and defend diagnoses against payer scrutiny—equipping you to protect reimbursement, improve SOI/ROM capture, and reduce audit vulnerability in this high-risk area.

September 24, 2025

Trending News

Featured Webcasts

Surviving Federal Audits for Inpatient Rehab Facility Services

Surviving Federal Audits for Inpatient Rehab Facility Services

Federal auditors are zeroing in on Inpatient Rehabilitation Facility (IRF) and hospital rehab unit services, with OIG and CERT audits leading to millions in penalties—often due to documentation and administrative errors, not quality of care. Join compliance expert Michael Calahan, PA, MBA, to learn the five clinical “pillars” of IRF-PPS admissions, key documentation requirements, and real-life case lessons to help protect your revenue.

November 13, 2025
E/M Services Under Intensive Federal Scrutiny: Navigating Split/Shared, Incident-to & Critical Care Compliance in 2025-2026

E/M Services Under Intensive Federal Scrutiny: Navigating Split/Shared, Incident-to & Critical Care Compliance in 2025-2026

During this essential RACmonitor webcast Michael Calahan, PA, MBA Certified Compliance Officer, will clarify the rules, dispel common misconceptions, and equip you with practical strategies to code, document, and bill high-risk split/shared, incident-to & critical care E/M services with confidence. Don’t let audit risks or revenue losses catch your organization off guard — learn exactly what federal auditors are looking for and how to ensure your documentation and reporting stand up to scrutiny.

August 26, 2025

Trending News

Prepare for the 2025 CMS IPPS Final Rule with ICD10monitor’s IPPSPalooza! Click HERE to learn more

Get 15% OFF on all educational webcasts at ICD10monitor with code JULYFOURTH24 until July 4, 2024—start learning today!

CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 1 with code CYBER25

CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24