5 min

The Definitive Guide to Leaving Insurance Panels

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At some point in their career, many therapists ask themselves if they should transition from taking insurance to a private pay practice. That said, initiating this process can feel stressful for both you and your clients. In addition, the transition from insurance to cash-pay clients may seem intimidating or even out of reach.

If you're considering terminating an insurance contract or no longer want to work with insurance clients, this guide will cover:

  • Deciding when to leave insurance panels
  • How to navigate telling clients about the transition
  • Strategies for securing more cash-pay clients

When Should Therapists Leave Insurance Panels?

Working with insurance companies certainly has its advantages. Being in-network with insurance plans means a steadier source of client referrals and a more predictable income. There also tends to be less need for marketing or other business-related practices.

But there are also significant downsides to taking insurance, and you may want to leave panels due to some or all of these common factors:

Tedious administrative tasks: Navigating insurance can be complex and time-consuming, and some therapists find it frustrating to spend all that time dealing with phone calls, insurance paperwork, and other parts of the billing process.

Low reimbursement rates: Maintaining a private practice can be costly, but insurance reimbursements may not adequately cover your living expenses. This can create financial hardship for some therapists, especially if the majority of your caseload uses insurance for their care. Furthermore, insurance companies may take weeks or months to process and reimburse claims.

Limited flexibility or autonomy: Private pay practices inherently allow for more flexibility and creativity in your work. You aren't dictated by what insurance mandates you to do.

Too many clients: Sometimes therapists accepting insurance have high caseloads to offset the lower reimbursement rates. This may coincide with burnout or the phenomenon of working with clients outside of your desired niche or expertise. In all cases, this can affect the quality of your therapy sessions and the satisfaction generated from your work.

How Do You Leave an Insurance Panel?

Once you decide to leave an insurance company, you'll want to first review the contract terms. Each panel will have a 'notice period' required.

You will need to formally inform your insurance panel of your choice to terminate your contract. Carefully review each contract to determine how much notice you must provide.

After the notice period and termination process concludes, you should still follow up with the insurance company to confirm that the request has been fully processed. You may need to address any outstanding balance issues or contract concerns.

Notifying Your Clients About Insurance Changes

Therapists often hesitate to leave insurance panels because they rightfully feel concerned about the impact their choice has on their clients. This is a valid worry, and you should prepare for it well in advance.

Be mindful of your own reactions and pain points: Leaving insurance can sometimes be a tedious and uncomfortable process. Anticipate that you may feel guilty, upset, anxious, or protective over your current clients. Some of them may also react intensely- fears of abandonment or rejection may emerge, and it's important to offer a supportive space where clients can freely express their emotions.

Determine your cash rate: You need to decide your standard fee for cash-paying clients, and you can determine this by assessing your level of experience, current market rate, and expertise. You may want to consider instilling a sliding scale for existing clients who can't afford your full fee.

Provide ample notice: It's always a best practice to inform clients about your practice changes well in advance. Some may want to end therapy right away, whereas others will want to move through a full termination process.

Provide referrals to other in-network therapists: It's important to have referrals on hand for clients who will no longer be working with you. If you can't find providers in-network, get contacts for lower-fee services, such as local community health organizations, training facilities, or nonprofits.

Be mindful of clients in the interim stage: As you transition from insurance, you will likely still receive new client inquiries from people who want to use their insurance to pay for therapy. Review your contract carefully to determine when clients must opt out of using insurance to see them in your practice.

Help clients tap into out-of-network benefits: Even if you’re not an in-network provider, you still may be able to provide therapy superbills for your clients. While reimbursement is not guaranteed (insurance can always deny a claim), they can save your clients money.

How to Smoothly Transition to Private Pay Clients

Most therapists find that attracting more private pay clients inherently requires a different marketing strategy. Your therapy practice needs to stand out solely on its own, and you need to have a solid plan to attract clients who can pay you at your desired rate.

Build a cash buffer for yourself: Ultimately, there's not really a foolproof method for knowing how many clients will stay with you after leaving insurance. For some time, you may make less money, and you should be aware of this risk.

Honing in on your niche: While private pay therapists can be generalists, specialized expertise can help you differentiate yourself from other therapists. Similarly, when you know exactly which clients you want to work with, your marketing strategy feels more concise and effective. You can start reflecting on your niche by spending some time assessing your ideal client. What are their presenting issues? What do they hope

Building your practice presence: Therapists accepting insurance don't need to worry all that much about having a robust presence. But people who pay out of pocket need to have a way to find you, so you need to know where and how to find new clients via your marketing.

Networking with other providers: Strengthening your professional network is essential when you have a fee-for-service practice. Networking helps build your professional reputation, and it can secure you more referrals in both the short-term and long-term.

Investing in good marketing: Marketing comes in many forms, from social media exposure to SEO to targeted ads to paper mailers. Each strategy has its own pros and cons, but you should definitely have a strategy in place. Keep in mind that just because one marketing strategy is "trendy" doesn't mean it's inherently optimal for your practice.

Being patient and being willing to experiment: Transitioning to private pay comes with more freedom, but that freedom can be daunting. With that, it's important to try to be patient. You likely won't have a full, dynamic caseload overnight, but persistence often pays off, especially if you are open to finding what works best for you.

Continuing to accept some insurance panels: Some therapists do choose to keep a mix-and-match of various payment options, where they accept insurance and see private pay clients. This option may give you the "best of both worlds," as you can still set your own rates while receiving a steadier stream of new inquiries.

Using Navix Health to Augment Your Private Practice

Running a successful private practice requires effort, diligence, and patience. At Navix Health, we provide streamlined solutions to pare down your administrative work. We care deeply about accessible mental health treatment, and we also care deeply about the passionate providers showing up for their clients each and every day.

Navix Health provides a seamless, innovative platform for individual clinicians, group practices, residential treatment facilities, and all levels of mental health treatment care. Whether you oversee a small caseload or manage multiple teams, we are here to help your business grow and thrive.

Contact us today to check out our dynamic platform and schedule your complimentary demo.

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