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Accepting Insurance in Private Practice: Definitive Pros and Cons

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Of all the contentious discussions mental health providers have, the pros and cons of therapists accepting insurance ranks at one of the top. Whether you're starting your practice or several years in, there's a good chance you've faced this inner conflict at some point in your career. I

At Navix Health, we’re dedicated to transparency within behavioral health, and we’re equally dedicated to supporting clinicians in the hard and meaningful work they provide. In this article, we'll unpack the good, bad, and truth of accepting insurance.

Pros of Accepting Insurance

Therapists who accept insurance are directly reimbursed for the services they provide. Clients who pay for therapy are responsible for their co-pay as well as any agreed-upon costs dictated when using insurance. By accepting insurance, you agree to be paid at a flat-rate reimbursement rate, and your treatment plans must comply with the insurance company's requirements.

More Clients

One of the main advantages of contracting with insurance companies is that you're accessing a larger referral network. This typically leads to more clients with less overhead marketing costs. If you're just building your practice, this option can be invaluable.

Steadier Income

Having more clients can result in a more consistent and steady income. You can also easily calculate your income each month based on how many clients you see and the reimbursement rate you receive from each insurance panel. This benefit can be particularly advantageous for newer therapists or those who are the breadwinners of their families.

Less Marketing Efforts

Therapists paneled with health insurance companies may need to spend less time marketing their practices or networking with other healthcare professionals. This may free up your time to focus more on your clinical efforts, and it may allow you to also have a greater work-life balance.

Greater Accessibility to Care

Insurance companies provide coverage for mental health care that lower-income people may not be able to otherwise afford. Many therapists value accessibility when it comes to their therapy services, so being in-network can give you a significant advantage in being able to best serve your community.

Cons of Accepting Insurance

Accepting insurance has its downsides, and all therapists should be aware of the potential drawbacks to working with insurance plans in their practice.

The Credentialing Process Can Be Slow

Credentialing can be long and tedious, with many providers having to wait several months before getting onto panels. You might also get rejected or placed on hold. That said, some therapists choose to outsource this task to third-party providers who support the credentialing process.

Lack of Transparent Reimbursement Rates

There's no current way to determine specific reimbursement rates before applying to be on a panel. Rates are confidential due to antitrust laws and cannot be shared across providers. Instead, before signing up for a company, you'll be given a fee schedule with CPT codes listed. This fee refers to the agreed-upon amount the insurance pays providers for the services rendered.

Low Reimbursement Rates

One of the main issues associated with taking insurance is that your take-home rate can be low. And unlike private pay, insurance companies dictate the rates they pay. You may be able to negotiate a higher rate, but this is more of an exception than a rule.

Required to Provide a Mental Health Diagnosis

Most insurance companies dictate that therapists provide a mental health diagnosis to necessitate their treatment. While this is not a problem for all providers, some therapists do not feel comfortable diagnosing their clients and/or do not want to provide sensitive information to a third party. Likewise, some clients feel uncomfortable with this kind of disclosure being on their medical records.

Risk of Audits and Clawbacks

Every health insurance company has a right to audit its providers. Depending on the plan, they can go back several years to audit your mental health records. A clawback refers to a retrospective audit where they ask providers to pay back money if they determine that a service was not sufficiently covered or documented.

Pros of Not Accepting Insurance

There are significant advantages to choosing to opt out of being on an insurance panel. Your therapy sessions are entirely in your jurisdiction, and you don't have to spend excessive time filing claims or trying to seek reimbursement for overdue payments.

Complete Control Over Your Caseload

If your mental health services are fully private, you are in total control of your clientele. With that, you may be more likely to refine your practice to accurately reflect your niche. This can free up time to pursue trainings that is most aligned with your values and ideal clients.

Determine Your Session Fee

If you take insurance, each therapy session rate is predetermined. But if you're working with people who pay out-of-pocket, you establish the rate. This can be especially helpful for ensuring that you feel adequately paid your worth.

No Constraints to Treatment

Unfortunately, an insurance company can deny care for any reason. Many therapists resonate with the frustration of trying to provide services only to be told the client does not meet the medical necessity for treatment. This puts both providers and clients in a precarious situation, particularly if clients are in a dire financial situation and/or are struggling to find therapists who can continue to provide them with a continuity of care.

Cons of Not Accepting Insurance

One of the main downsides of not taking insurance is that you're fully responsible for looking after your business. You may have to invest more in upfront marketing and networking costs. You may also have a slower stream of referrals.

More Marketing and Networking Efforts

In-network providers can often lean on the insurance panels to supply clients to them. But if you have your own practice and don't take insurance, you're responsible for getting the word out there. This can be daunting for some therapists, especially if they don't have much interest in managing the business side of their work.

Inconsistent or Unsteady Income

Private practice income can be inconsistent, and the local economy can certainly affect how and when potential clients seek out services. When times are financially challenging, people often pull back on discretionary spending, and that can include medical services like therapy.

Many Clients Want to Use Their Insurance Company

The average person spends just over $500 for an individual silver insurance coverage plan each month. With such exorbitant healthcare costs, it's only typical for people to first seek to subsidize therapy costs by looking for in-network therapists. Depending on where you live or what you specialize in, the majority of potential clients may not be able to afford therapy without using their insurance plan.

Alternatives to Being on Insurance Panels

Therapists have numerous options when it comes to structuring pay for their sessions. If you don't want to accept insurance, here are some other choices to consider:

Offering superbills: Superbills allow clients to tap into their insurance company's out-of-network benefits. You offer the itemized services provided, and they submit claims to their insurance directly for reimbursement. You're not involved unless the insurance requires any additional information from you.

Providing a sliding scale fee: Many private pay therapists offer a sliding scale for clients who cannot afford their cash rate. It's important to determine this fee in advance and have a system for who will be eligible to receive it. You should also consider how and when you might raise this fee for potential clients.

Having some cash-pay clients: It's possible to offer a mix-and-match practice, where you work with some clients paneled through insurance and others via private pay. You need to determine each insurance company's protocol on this policy.

Using Navix Health to Augment Your Private Practice

At Navix Health, we are here to help clinicians navigate the logistics of onboarding new clients, track insurance billing, send claim forms, and help you streamline some of your more demanding and time-consuming tasks.

We support both seasoned and new providers with our comprehensive system. Our seamless and secure platform allows you to focus on what you do best: build a sustainable practice and support your clients in the best ways you can.

Want to learn more about how we can augment your practice or medical facility? Contact us today to schedule a complimentary demo. 

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