For Therapists: Benefits and Drawbacks of Insurance

For therapists and mental healthcare professionals who are running a practice, accepting insurance will increase the client's access to quality mental health care.

The American Medical Association, in their studies, found that the "chances of a mental health therapist to accept insurance is less probable" when compared to other health care practitioners.

Therapists who accept insurance have the advantage of seeing more clients, and it proves to be less frustrating to both therapists and clients.

If you wish to determine which insurance panel to join, these are the two possibilities for therapists to accept insurance.

1. Join a provider panel preferred by the insurer

In this case, therapists can get reimbursement directly from the insurance company. The insurers directly pay the therapists for their service.

Prospective clients may find you from the directory of preferred therapists that these insurance companies have. However, the application process may be a bit tedious, and approval may take time.

2. An "out of network" provider

Therapists can give "superbills" to clients so that the clients can claim reimbursement from their insurer. You could accept payments directly from the client. It is then the responsibility of the client to seek compensation from their insurance provider.

Related: What Is A Superbill, and How Can Therapists Create One?

What are the benefits of accepting insurance?

  • Better Access - Sometimes, people cannot afford to pay for their therapy. If you accept insurance and Medicaid, then you would be increasing their access to better quality mental health care.
  • Diversity - You will have access to a more diverse group of clients.
  • Profit - Insurance reimbursement could increase your benefits.
  • Marketing - You could improve your marketing since clients could choose you from their insurer's panel.
  • Credibility - Increases your trustworthiness
  • Customer Loyalty - Clients trust therapists that take insurance. If your services are covered, clients are more likely to continue their therapy with you.

What are the drawbacks of insurance?

  • A time-consuming process with a lot of paperwork
  • Fluctuating reimbursement rates
  • No Balance Bill for covered services - If you are on an insurance company's provider panel and if the reimbursement rate is different from your usual charge, then you cannot bill your client for the difference. However, if you are an "out of network" provider, you can charge your clients the entire amount.
  • Intricate billing - A complicated billing process as per the insurer's requirements and out of network therapy billing with proper codes
  • Mental Health Service coverage - Even though the Mental Health Parity and Addiction Equity Act (MHPAEA) requires insurance companies to cover mental health services at similar rates just like other physical health problems, there are disparities. They may not insure all therapy services.
  • Delayed payment - When you claim for reimbursement, the insurer must pay within 30 days. However, if they deny your claim, then you would have to file an appeal.

Are you interested in getting on insurance panels?

The following can help you choose a provider panel.

  • Determine which insurance companies are famous in your area.
  • Joining large panels will give you access to a diverse group of clients.
  • What are their reimbursement rates?
  • Find out information about these insurers from other therapists in your area.
  • Determine if you meet the requirements of the provider panels of your interest. If not, how expensive and complex would it be to fulfill the requirements?
  • Are there any additional services offered to preferred providers by the insurer?

Running a practice has its fair share of challenges. So, therapists must weigh the pros and cons of accepting insurance, and then decide what insurance panels to approach.

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