You are seeing the same number of patients, but your revenue is not growing. Your schedule is full, your team is busy and the claims are going out so where is the money?
The answer, for most mental health practices, comes down to one thing: unpaid claims that nobody is actively following up on. The decision to follow up unpaid medical claims consistently and systematically is the single most impactful thing a behavioral health practice can do to improve cash flow right now.
The numbers tell the full story. Denial rates hit nearly 12% in 2024, and behavioral health practices reported an average AR of 65 to 75 days in 2025 up from 50 to 55 days the year before. That trend is moving in the wrong direction and for most practices it is not because the clinical work is getting worse. It is because the follow-up process is not keeping up.
This guide explains exactly why claims go unpaid, how to follow up effectively at every stage and what it takes to reduce AR days and bring more of your earned revenue back into your practice.
What Are Unpaid Medical Claims And Why They Are Not All the Same
Most practice administrators think of unpaid claims as denials. But that is only one piece of a much bigger picture.
An unpaid medical claim is any claim submitted to an insurance payer that has not resulted in full expected payment within the standard adjudication window. And there are five distinct types each requiring a completely different response.
No Response or Pending Claims are claims the payer received but has not acted on. No ERA, no EOB, no acknowledgment beyond initial receipt. These claims are easy to overlook because they are not technically denied, they are just sitting.
Front-End Rejections never made it into adjudication at all. A data error invalid subscriber ID, incorrect date of birth, wrong provider NPI caused the clearinghouse or payer to kick the claim back before it was ever processed. The dangerous part is that your timely filing clock is still ticking.
Hard Denials are claims the payer processed and refused to pay no prior authorization, non-covered service, medical necessity not established. These require an appeal or correction and resubmission.
Underpayments are claims where the payer paid less than your contracted rate. These are frequently overlooked because the money came in just not all of it.
Post-Payment Recoupments are situations where the payer claws back money they already paid you, often citing a documentation audit or eligibility issue discovered after the fact.
Treating all five of these the same way wastes time and guarantees that recoverable revenue gets left behind. Each type has its own resolution path and knowing which one you are dealing with determines everything about how you respond.
The Root Causes of Unpaid Claims in Mental Health
Mental health billing solutions have unique characteristics that make unpaid claims more common and harder to resolve than in other specialties.
Telehealth billing complexity is one of the biggest contributors. Incorrect place of service codes, missing modifier 95, or applying the wrong telehealth modifier for a specific payer results in denials that are entirely avoidable with the right billing protocols in place.
Prior authorization delays driven by AI-powered utilization management tools have slowed approval timelines significantly in 2025 and 2026. When authorization does not come through before a session is delivered, the resulting claim is highly likely to be denied and the appeal process is time-consuming.
Psychiatry and behavioral health also lack standardized coverage rules across payers. What one commercial insurer covers without hesitation, another requires extensive documentation to approve. Without payer-specific knowledge built into your billing process, errors are inevitable.
And then there are the claims that simply age because nobody follows up early enough. Claims lacking early follow-up are 40% more likely to age beyond 60 days. That single statistic explains more about the average behavioral health AR problem than almost anything else.
How to Follow Up on Unpaid Medical Claims Step by Step
A structured follow-up process is the difference between a practice with 40-day AR and one with 80-day AR. Here is exactly how it works.
Step 1: Confirm Clean Claim Acceptance Day 0 to 2
Before anything else, verify that your claim actually made it into the payer’s system. Check your clearinghouse acceptance report and look for the payer’s 277CA acknowledgment. If the claim was rejected at the clearinghouse, it never entered adjudication and your timely filing window is already counting down.
Step 2: Run a First Status Check Day 7 to 14
For high-dollar and complex claims, check status early. Log into the payer portal or call the provider line. Confirm three things: was the claim received, is it currently in adjudication and has the payer requested any additional information?
Step 3: Begin Active Follow-Up Day 21 to 30
If no ERA or EOB has come back by day 30, it is time to pick up the phone. When you call, verify receipt, ask whether the claim is in process or has been denied and document everything: date, representative name and call reference number. This documentation becomes critical if you need to escalate or appeal.
Step 4: Classify and Route Day 30 Plus
Once you have a response, sort the claim into the right resolution path. No response means resubmit and escalate. A rejection means correct the error and resubmit the same day. A denial triggers the denial management process. An underpayment requires a contract variance review. A recoupment demands a formal dispute with supporting documentation.
Step 5: Escalate Unresolved Claims Day 31 to 60
If standard follow-up has not produced a resolution, escalate. Request a supervisor review, file a written inquiry, or reference your state’s prompt-pay deadlines. Before escalating, verify your escalation checklist:
- Claim submission confirmation on file
- Payer receipt date confirmed
- Coding accuracy verified
- Prior authorization status confirmed
- Minimum 2 to 3 follow-up attempts documented
Step 6: Document Everything Every Time
Every interaction with every payer on every claim needs to be recorded. This documentation is your evidence trail for appeals, prompt-pay complaints and state insurance department filings. If you cannot prove you followed up, the payer’s version of events is the one that stands.
7 Best Practices to Reduce AR Days in Behavioral Health
| # | Best Practice | Why It Works |
| 1 | Submit Clean Claims | Accurate CPT and ICD-10 codes, correct modifiers, and complete documentation reduce first-pass denials |
| 2 | Standardize Telehealth Claims | Apply correct POS codes and modifier 95 for each specific payer to prevent telehealth denials |
| 3 | Proactive Authorization Management | Track prior authorization expiration dates and submit renewals before they lapse |
| 4 | Daily Denial Monitoring | Address denials within 24 to 48 hours to prevent claims from aging unnecessarily |
| 5 | Segment AR for Prioritization | Focus resources on high-dollar claims and the 90-plus day bucket first |
| 6 | Monthly AR Review Meetings | Review AR trends, payer patterns, and rejection reasons with your billing team every month |
| 7 | Collect Patient Responsibility Upfront | Collecting co-pays and deductibles at the point of service eliminates patient AR entirely |
Follow-Up Call Scripts by Payer Type
Having the right script ready before you call saves time and gets better results.
Commercial Insurance Opening: “Hello, I am calling from [Practice Name] regarding claim status for patient [Name], date of service [Date]. Could you please confirm the current processing status?” Follow-up questions: Has the claim been processed? Is additional documentation required? Is the claim in review or pending? Escalation: “Since the claim is now over 60 days old, could you escalate it for review or provide the expected resolution timeline?”
Medicare Opening: “I am calling to check the status of a Medicare claim for beneficiary [Name], date of service [Date], submitted on [Submission Date].” Key checks: Claim receipt confirmation, payment determination status, medical review status.
Medicaid Opening: “I am calling regarding a Medicaid claim for patient [Name], date of service [Date]. Could you confirm whether the claim has been processed or suspended?” Key checks: Eligibility verification at the date of service, authorization status, documentation requirements.
Key AR Metrics Behavioral Health Practices Must Track
| Metric | 2026 Benchmark | Goal |
| Average AR Days | 30–45 days | Reduce below 45 |
| AR Aging Over 90 Days | Less than 10% of total AR | Minimize delayed payments |
| Clean Claim Rate | 90% or higher | Reduce rework and resubmissions |
| Denial Rate by Payer | Less than 5% | Track patterns and address root causes |
| First-Pass Resolution Rate | 85–90% | Maximize efficiency on first submission |
| Authorization-Related AR | Less than 10% | Proactively manage approvals |
6 Quick Answers About Insurance Follow-Up
How long should I wait before following up on an unpaid claim?
Begin checking high-dollar claims within 7 to 14 days of submission. Start active follow-up at day 21 to 30. Claims that lack early follow-up are 40% more likely to age beyond 60 days and that is when recovery gets difficult.
What is the difference between a denial and a rejection?
A rejection happens before the claim enters adjudication, usually a data error that the clearinghouse or payer catches before processing. A denial happens after the payer reviews the claim and refuses payment. Each requires a completely different response.
What percentage of denied claims are recoverable?
Up to 60% of denied claims are never appealed and the majority of those are perfectly recoverable. Most payers have a 60 to 180-day appeal window. The only reason practices do not recover this revenue is because they do not follow up.
What is a good AR day benchmark for behavioral health practices?
A healthy benchmark is 30 to 45 days. Anything above 60 days indicates inefficiencies in your billing or follow-up workflows that are costing you real money every month.
Why are telehealth mental health claims frequently denied?
The most common reasons are incorrect place of service codes, missing modifier 95, inadequate session documentation, or payer-specific telehealth coverage restrictions that differ from standard billing rules.
How can I track my follow-up efforts effectively?
Use a dedicated claim tracking system whether a spreadsheet or billing software that records submission dates, follow-up attempt dates, representative names and outcomes. Weekly reviews keep nothing from falling through the cracks.
Stop Letting Unfollowed Claims Drain Your Practice
Unpaid claims do not just represent delayed revenue. Left unworked, they represent permanent losses money your practice earned and delivered but will never see because the follow-up did not happen in time.
The fix is not working harder. It is working smarter with a structured, consistent insurance follow-up process built specifically for the complexity of mental health billing.
Learn how our Insurance Follow-Up Services for Mental Health Providers can help you recover what you have already earned, reduce your AR days and build a revenue cycle that supports the growth your practice deserves.
