The health insurance claims filing and payment process has a significant impact on the financial health of a psychology practice. Following are some pointers for reviewing how you handle health insurance claims procedures and determining whether any changes may be in order.

When using a manual system, have each patient complete an information form during the initial visit to give you the details you need for filing claims on behalf of that patient. For longer term patients, update the form periodically to reflect changes such as a new address or new insurance coverage (including Medicare eligibility).

Increasingly, health care providers are using computers for basic business functions -- especially billing, accounting and claims processing. Many health insurance carriers have created incentives such as expedited reimbursement to entice providers to file their patient claims electronically. Interested providers need to ascertain and clearly understand the computer specifications and other requirements associated with automated claims submission.

Make sure claims are completed fully, accurately and legibly. Use the required forms and coding systems, which vary from carrier to carrier. (For example, Medicare requires the HCFA 1500 form, and ICD-9-CM diagnosis codes.)

Be very careful to use appropriate procedure and diagnosis codes for all services. Select codes coinciding precisely with the actual time (as opposed to average or 'rounded' figures) involved in rendering services such as psychotherapy or diagnostic testing. Make certain that information regarding the visit is substantiated in the patient records.

Establish and follow a schedule for submitting claims on a routine basis (preferably weekly, or at least every other week). Inquire regularly about the status of unpaid claims -- generally within one month after filing.

Understand collection policies required of you by various carriers. For example, while acknowledging that there may be circumstances affecting patients' ability to pay, the Medicare program generally considers it fraud for providers not to collect copayments from beneficiaries.

If a claim is denied, don't simply accept the insurance company's decision. Review the claim and determine whether there may have been coding errors or other inaccuracies or omissions. Have a standardized letter handy asking the insurance carrier for a reconsideration, and use this letter to provide any necessary written clarification about the claim. If the claim is denied a second time, consider invoking your appeal rights.

Decide when to resubmit insurance claims that you believe have been underpaid. Either a large claim or smaller underpayment of a frequently occurring claim might merit a request for reconsideration.

Skim carrier newsletters and other publications for information about new codes and changes in reimbursement policies applying to psychological services.