Billing for Therapists: Making Sense of EOBs, Denials, and Rejections
If you’re a therapist in private practice who has ever looked at an EOB and thought, “Is this in English?”—you’re not alone.
Billing is one of the most stressful and confusing parts of running a private practice. Between cryptic codes, vague denial reasons, and that weirdly passive-aggressive tone insurance companies seem to have (“Claim denied due to information not provided… that we never asked for”), it’s no wonder so many clinicians feel overwhelmed.
In this post, I’m breaking down the basics of EOBs, denials, and rejections so you can feel a little more confident (and a lot less panicked) when dealing with insurance. Plus, if you're looking for private practice consultation to get your billing systems in shape, stick around—help is just a scroll away.
Let’s Start with the Basics: What’s an EOB?
EOB = Explanation of Benefits. It’s not a bill (though it looks like one), and it’s not a love letter from the insurance company (unfortunately). It’s a document that tells you:
What was billed
What they paid (if anything)
What they didn’t pay (and why)
What the client may owe
Think of it as a receipt crossed with a riddle. Your job is to decode it. The trick is to look for adjustment codes and reason codes—those little strings of numbers and letters that tell you what happened. Each has a corresponding explanation, often located in a key at the bottom.
Rejection vs. Denial: They’re Not the Same Thing (Even if They Both Feel Personal)
Claim Rejection = the claim didn’t make it into the insurance company’s system. Usually due to a formatting error, wrong NPI, incorrect client info, or a typo in the zip code that somehow causes total chaos.
Claim Denial = the claim was received and processed… and then rejected (in a different way). It’s the insurance company saying, “Thanks, but no thanks.” Denials can happen for lots of reasons:
Missing authorization
Out-of-network provider
Timely filing limits
Non-covered service
Weird coordination of benefits issues
Key tip: Rejected claims can usually be corrected and resubmitted. Denied claims often need an appeal—which takes more time and documentation. A corrected claim needs to be marked as a resubmission.
Common Denial Codes (and What They Actually Mean)
Here are a few of the classics you might see in your EOBs:
CO-29: “The time limit for filing has expired.”
Translation: You missed their deadline. Every plan has a different one. Pro tip: Set a calendar reminder to file claims weekly so this doesn’t happen.CO-197: “Precertification/authorization/notification absent.”
Translation: You needed prior approval and didn’t get it. This happens a lot with EAPs or when clients switch plans.CO-204: “Service not covered under patient’s current benefit plan.”
Translation: This could mean the client doesn’t have mental health coverage, used up their sessions, or their deductible is eating everything in sight.
So What Do You Do About It?
1. Check the EOB details. Look for those reason codes. They’ll tell you what the issue is.
2. Log into the payer portal. Sometimes the online portal gives more details than the EOB. Plus, you can often resubmit right from there.
3. Fix and resubmit. If it’s a rejection, fix the error and resend it. Easy win.
4. File an appeal. If it’s a denial and you have a good case (client does have coverage, you did get auth), submit an appeal with supporting documentation.
5. Keep good records. Document everything. Keep a spreadsheet or use a system that helps you track what you sent, when you sent it, and what the response was.
Pro-Tip: Don’t Try to DIY It Forever
I always tell my consultation clients this: You didn’t go to school to be a billing expert. You went to school to help people. If billing is eating up your evenings, making you dread sessions, or keeping you stuck in “I don’t even know what I don’t know” mode—it’s time to get help.
That’s where private practice consultation comes in. Whether you’re just getting started with insurance or knee-deep in claim chaos, I offer one-on-one support to help you:
Set up systems that actually make sense
Understand EOBs and denials like a pro
Figure out what to do (and what to stop doing)
Save time, money, and headaches
Final Thoughts: You’ve Got This (and You Don’t Have to Do It Alone)
Billing doesn’t have to be a full-time job on top of your full-time job. Once you understand the basics and have the right tools (and support), it gets easier.
If you’re ready to feel less lost and more confident when it comes to insurance, let’s connect. I’d love to help you build a smoother, saner private practice—one EOB at a time.
>> Ready to take the billing stress off your plate? Schedule a consultation here.
Related Articles: A Beginner’s Guide to Insurance Billing for Therapists
Should You Take Insurance in Private Practice? The Pros and Cons
Do I Need a Billing Service or Can I DIY? A Therapist’s Guide to Handling Insurance Like a Boss
