EAP carve-outs are one of the most common sources of denied claims in mental health billing. The core problem: the entity that authorizes the session is not always the entity that pays for it.

What is an EAP carve-out?

An Employee Assistance Program (EAP) typically covers a set number of sessions (usually 3–8) at no cost to the employee. The employer contracts with an EAP vendor, and the vendor manages the authorization.

But here is where it gets complicated: many EAP vendors do not actually pay for the sessions. They authorize them, but the payment responsibility “carves out” to the commercial health plan. This means:

  • Authorization comes from: The EAP vendor (e.g., ComPsych, Lyra, Magellan)
  • Payment comes from: The commercial plan (e.g., Aetna, UHC, BCBS)

How to tell before the session

Before you bill, you need to know three things:

1. Is this an EAP session or a commercial session?

The authorization number should tell you. EAP authorizations typically have a different format than commercial authorizations. If you are not sure, call the number on the authorization letter.

2. Who is the payer of record?

This is the entity that will actually pay the claim. It is almost never the EAP vendor. Check the patient’s insurance card — the EAP vendor is listed separately from the commercial plan.

3. What is the billing address?

EAP carve-outs often require claims to be sent to a different address than the commercial plan. Sending a carve-out claim to the commercial plan’s billing address is the most common cause of denial.

The intake check we built

When we onboard a mental health practice, we build an intake checklist that includes:

  • EAP vendor identification for every active authorization
  • Payer of record confirmation for each authorization
  • Correct billing address for each payer
  • Modifier requirements (if any) for EAP sessions

This check takes about five minutes per patient, but it prevents the two-year backlog of denied EAP claims that we see in about one in five practices we take on.

Last verified: August 2026. EAP vendor policies vary by contract — always verify with the specific vendor and payer.