How to Reduce Insurance Claim Denials & Improve Reimbursement in 2025

Feb 20

Insurance claim denials are becoming a growing challenge for behavioral health providers. With insurers implementing more stringent requirements, many practices are seeing an increase in rejected claims—impacting cash flow and delaying patient care.

The good news? By understanding the most common reasons for denials and implementing proactive strategies, you can reduce denials and improve your reimbursement rates. Here’s how.

1. Understand Why Claims Get Denied

The first step in reducing denials is knowing the most common reasons they happen. Some top causes include:

Incomplete or Incorrect Information: Missing patient data, incorrect CPT codes, or outdated provider credentials can trigger rejections. Remember, good data in, means good data out. Submit claims with the correct information and you get paid.
Lack of Preauthorization: Many insurers now require prior authorization for mental health services.
Timely Filing Issues: Every payer has different deadlines for claim submission—missing these means automatic denial.
Medical Necessity Disputes: Insurers may deny claims if they deem the service unnecessary or insufficiently documented.

2. Proactive Steps to Minimize Denials

To protect your practice's revenue, follow these best practices:

Verify Insurance Up Front: Confirm patient eligibility and benefits before the first appointment to catch coverage gaps early.
Stay on Top of Preauthorization: Ensure any required prior authorizations are secured for required services and documented thoroughly. Know the units, dates, Authorization Number, and any modifiers required to properly submit claims
Double-Check Documentation: Accurate, detailed records and correct coding reduce errors that trigger denials.
Monitor Timely Filing Windows: Implement systems to track and meet each insurer’s filing deadlines. Claims typically must be submitted within 60 to 120 days from the Date of Service.

3. How to Appeal Denied Claims Successfully

Even with careful processes, some claims will be denied. Here’s how to improve your chances of a successful appeal:

Act Quickly: Most insurers have tight windows for appeals—initiate the process as soon as you receive a denial.
Gather Strong Evidence: Include detailed clinical notes, prior authorizations, screen grabs of software with details, and any additional supporting documents.
Use Clear, Specific Language: Clearly explain why the service was necessary and meets coverage guidelines.

4. Consider RCM Support to Ease the Burden

Managing denials and appeals is time-consuming. Partnering with a Revenue Cycle Management (RCM) service like BreezyBilling can help you stay compliant, streamline your processes, and maximize reimbursements. Our experts handle the complexities of claim management so you can focus on patient care.

Insurance claim denials aren’t going away—but with the right strategies, you can reduce their impact on your practice. By improving your processes and being proactive, you’ll protect your revenue and continue delivering quality care.

Need help managing your claims and reducing denials? Learn how BreezyBilling can support your practice today.