Why We Don't Work with Insurance Companies

TL;DR check out this TikTok about what it’s like trying to navigate the insurance maze as a therapist.

Every therapist in private practice has to make a decision about whether to be an in-network provider insurance or out-of-network insurance provider. Today we’ll be pulling back the curtain to help you understand our decision making on this issue.

Being an in-network provider means that people whose health insurance includes mental health benefits, theoretically, only have to pay a co-pay in order to access services.

This can be complicated by most plans having a high deductible that must be met first. That means that clients have to pay out of pocket for a large portion of their treatment until they have met that deductible amount. After that they are only responsible for the co-pay until the next calendar year when the deductible restarts.

Being an out-of-network provider means that clients pay the therapist’s full fee directly to the therapist and can then submit a superbill, basically a receipt, to their insurance company. If the individual has out-of-network mental health benefits, they can be reimbursed for a percentage of their therapy payments. The percentage depends on the specific insurance plan’s details.

It’s a truly difficult decision to make whether or not to be in or out-of-network. As therapists, we want to increase access to services to anyone who would benefit from our work together. Unfortunately that idealism comes up against the reality of working with insurance companies.

Here are some of the challenges that have led to our practice deciding not to be in-network.

Health insurance companies require a diagnosis and access to progress notes that we take for our own records. This means that at any time a company can request that information, comb through all the work we have done together, discuss it amongst themselves and then determine whether or not they think it is worth being paid for.

Sometimes health insurance companies will initially agree with treatment being conducted and then after a year or two audit your chart and determine they actually now disagree with the course of treatment you and your therapist decided on and issue a “clawback.” A clawback requires a therapist to pay back all of the fees the insurance company has paid out for treatment thus far.

Being a therapist means that you spend years training in psychological theory, practice and research. We additionally participate in continuing education classes, hire speakers to come to our practice and engage in readings so that we continue to grow our knowledge. This is something we take seriously. That knowledge and your personal therapeutic goals should be driving treatment - not what an outside health insurance company determines.

Additionally, insurance companies are increasingly moving to a “value” based payment system rather than a fee for service based payment system. That means that rather than paying a set amount for each session that occurs, insurance companies are increasingly using an individual’s diagnosis to create their own treatment plan and insisting that therapists follow it in order to be paid for their time. As a therapist we are put in an ethical quandary of whether to provide the treatment we believe our clients need or focus on getting paid so that we can keep the practice’s lights on.

While a therapist’s fee may seem high, if you consider all that it is covering - the time spent in sessions, time spent out of session completing paperwork you may need, consulting with other clinicians you may be working with (e.g., psychiatrist), cancelled sessions, office and telehealth service infrastructure, graduate school tuition (5+ years for doctoral level clinicians), continuing education classes, our own health insurance, malpractice insurance, vacation time, sick days, taxes on the city, state and federal levels and more - it’s expensive to become a therapist and maintain a practice.

Health insurance companies pay therapists about 40-50% of what we typically charge in fees. Therapists in highly populated areas are paid less by insurance companies than those in less densely populated areas. That means a therapist in California is paid less than a therapist in North Dakota who works with the same insurance company. This is despite the significant higher cost of business and personal expenses related to living in California.

Our options are to not accept health insurance and focus on providing a high quality of care and good standard of living for ourselves, or accept health insurance and dramatically increase the number of clients we see, leading to burnout and poor care.

Another consideration is the amount of time therapists have to spend submitting claims, chasing down payments when insurance company “lose” submitted claims and participating in chart audits. Here’s a TikTok by an LA therapist describing the experience simply trying to sign up as an in-network provider. Administrative time isn’t reimbursed by health insurance companies and some therapists hire a biller to manage their health insurance sign up and administration.

Think about how long it can take for you to deal with an issue that comes up with your insurance company. Now imagine if our practice were going through the same thing for the majority of our clients. We would spend so much time on the phone we’d barely have time see our clients.

At the end of the day, we became therapists in order to do good clinical work and make a real difference in our client’s lives. We want to do this in a way that provides as much access as possible, but to a certain extent our hands are tied by the high costs of graduate school and running a practice and the sacrifice of time and money required by working with insurance companies.

We attempt to increase access by offering sliding scale spots, providing you with superbills so that you can submit them to your insurance company if you choose and providing therapy groups at a lower price than individual sessions.

We care about your well-being and make a genuine effort to provide you with the best service we can. If you have any additional questions about sliding scale spots or submitting superbills for reimbursement, please ask us and we’ll be glad to help in anyway we can.