I completed both my post-doctoral residencies at an insurance-based practice and initially accepted insurance when I started my business.  As my specialty evolved, I realized accepting insurance no longer made sense for the work I do.  Ultimately, my decision came down acting with integrity and practicing what I preached to clients.

Lack of Privacy & Confidentiality

When insurance companies pay for your treatment, it also means that their employees (clinicians or not) will audit my treatment plans and read what we talked about in my session notes.  These employees are paid to save the insurance company money by searching for fraud and determining whether you’re overusing your insurance coverage.  In turn, the insurance company may decline authorization of additional sessions because you’re not progressing fast enough; our work in psychotherapy does not qualify as “a medical necessity”; or because my treatment approach isn’t recognized by the insurance company as an “evidence-based treatment” (that’s code for short-term, as in 6-12 sessions).  Hell, some insurance providers don’t reimburse for 60-minute sessions anymore.

That’s just not okay in my book.

I believe that you have a right to confidentiality of your medical records.  You also have the liberty to progress through treatment at a pace that’s best for you – one that allows you sufficient time to take everything that you’re experiencing.  That unfolds differently for each person.

Assumption of Illness

Insurance companies operate on a medical model, which means they require a diagnosis to establish that you have “a medical necessity” to seek services in order to pay providers. To justify that you have a “medical necessity” I’d have to assign you a diagnosis to be reimbursed for our work together when there may not be one that really fits what you’re going through. The vast majority of insurance companies don’t consider relationship issues (like couples or family therapy), developmental/attachment trauma, existential issues, life-transitions, personal development, or self-improvement as “medical necessities” because there are no diagnoses for these in the DSM-V. 

And even if there were appropriate diagnoses, there are some diagnoses that insurance companies don’t consider debilitating enough to pay for.  So I’d have to label you with a more severe diagnosis they will pay for, but one that may not really reflect your situation.  You’re probably wondering, “What’s the harm in that? A little truth-bending never hurt anyone.”  Well, that’s just it – it can.  It can come back to bite both of us in the butt.

Potential Negative Consequences for You

If given, the diagnosis will become a part of your medical record.  While that might not be such a big deal right now, it may become one later on if you want to: get life insurance, work in the financial sector managing other’s assets, regularly handle firearms, or seek employment in any sector in which your decision-making might be called into question due to your emotional state.

Call me crazy, but I feel that people should get the help they need without fear, stigma, or reprisal for making their mental health and personal growth a priority.

Fraud

If I engaged in the aforementioned truth-bending, I’d essentially be committing insurance fraud.  There are providers out there are willing to walk this fine line and take this risk.  In my opinion, the penalties and professional consequences of insurance fraud are huge, and frankly, not worth it.  I’d rather enjoy the peace of mind that comes with integrity, than a few extra bucks in my bank account.

Low Rates

Speaking of money….In order to be “in-network” with an insurance company, I would have to agree to accept a lower fee in exchange for the insurance company listing my practice in their directory of providers and sending me referrals.  In the spirit of transparency, a pair of genuine leather shoes go for more than what some insurance companies pay per session. And each year, insurance companies continue to cut the rates they pay therapists for their work.

Here’s an example with real numbers: My fee is $190 per session. But to join XYZ Insurance Co.’s network, I had to agree to their reimbursement rate of $60 per session. My client would also be responsible for a co-pay of $40 per session, bringing the total to $100 per session. That means I’m waiving $90 (approximately 47%) for every session I see clients from XYZ Insurance Co.

Would you be willing to forgo 47% of your salary? :-/ 

Additionally, insurance companies have been increasing their members’ premiums, deductibles, and co-pays in the last few years claiming rising costs of care. You’d think that that would translate to higher reimbursement rates to care providers, but it doesn’t…at least not in the mental health fields. In fact, insurance reimbursement rates have actually decreased over the same period of time.

You’re probably wondering, “How do the therapists and psychologists that take insurance afford to?”

For such insurance-based practices, taking on more clients than is clinically prudent is the only way to make up the difference and keep their doors open. This then leads to another problem…

Burnout & Exhaustion

Here’s the reality, many providers that accept insurance overbook their schedules in order to turn a modest profit (on par with a public school teacher’s salary {I know – it’s a terrible comparison, but I was a public school teacher for 8+ years. I speak from experience.}) after rent, utilities, malpractice, and other expenses.  Additionally, these providers often only offer a 45-minute session to maximize the number of clients in a day (10 vs 8) and the chances of insurance reimbursement (remember, a lot of insurance companies don’t pay for 60-minute sessions anymore). 

Delayed (or Non) Payments

Despite the insurance companies agreeing to a set reimbursement rate, these companies require therapists to jump through a bunch of hoops to get paid. It is common practice for most insurance companies to reject submitted paperwork to delay payments. When they’re not seeing clients, these therapists are drowning in insurance paperwork and resubmitting billing claims in order to get paid, or spending hours on the phone contesting unpaid claims. 

On average, it takes an additional 1.5 hours of UNPAID work outside of the session to get paid for sessions. And remember, the therapist is already making less by agreeing to take insurance. (In my previous example, it would cost $285 of my time ($190×1.5) to get paid my $60 reimbursement rate from XYZ Insurance Co.)

The alternative is to pay a medical billing company 8-10% of the claims’ costs to do the aforementioned, but that increases expenses and cuts into that modest profit I mentioned before.

But let’s say that I or my medical billing company ARE able to see the claim through the labyrinthine insurance payment process, the payment will finally arrive in my bank account anywhere between 3-6 months after the session took place IF everything goes smoothly. 

Retroactive Claim Denials (aka Claw Backs)

Now imagine that, after all that trouble, that insurance company asked you to give the money back, even years later. Yep, this really happens and, unfortunately, it’s a common practice among insurance companies. They’ll audit your claims and paperwork for several years back. If they find any mistakes or inconsistencies in the therapist’s paperwork (including grammar, punctuation, margins, etc.) they missed when they originally approved the therapist’s claim, the insurance company will request that the therapist return the fees s/he was paid.

Pretend that your employer sent you a bill requesting that you repay the income you’d earned 3 years ago. Would that seem fair to you? I didn’t think so. 

Claw backs can amount to thousands of dollars that can bankrupt a small business like a private practice. Many insurance-based clinicians live in fear of such retroactive audits. Before leaving the insurance-based practice I worked at, I saw a major insurance company request $300,000 be returned by the end of the month. Talk about stressful! 

All together that’s a recipe for a tired, overworked, and stressed out the therapist.

This may have been the problem if you’ve ever been to therapy you felt didn’t “work” with a provider from your insurance company. I should know.  I started to experience the symptoms of burnout after two years of insurance-based practice.  And guess what happened?!  I started feeling like many of my clients which made me a really ineffective therapist.  And that’s when I realized, “Crap! I’m doing the things I tell my clients not to do!”  Talk about incongruence! 

So I changed my business model for the sake of the well-being of my team and to preserve the quality of care we want to provide every client. It breaks our hearts to reduce access to care to people in need, but I realized early on that we can’t help anyone if we’re stressed/burned out or have to close our doors. 

What are the benefits of privately paying for mental health care?

No Labeling – You don’t have to carry an unnecessary (and perhaps inaccurate) diagnosis on your medical record.

Confidentiality & Privacy – You and your psychotherapist are the only people that will know you’re in therapy.  You get to choose who you disclose this information to.  Session notes are private records so there won’t be available prying eyes reading about your intimate details.

Self-Determination – You get to work with a psychotherapist that is free to use the best therapeutic approach to help you meet your goals.  You and your psychotherapist are the only people involved in the decision about the length of your care.  You won’t have to seek additional authorization to continue your work or return to psychotherapy if you have new goals you’d like to explore.

Quality Care & Attention – You’ll get a psychotherapist that’s not professionally overextended.  Someone that’s alert and engaged during your session, remembering the details of previous conversations without you having to restate them every week.  You’ll able to call and actually speak to her/him if you need support between sessions.  Most of all, you’ll have the help of a professional that’s invested in your process of growth because they’ve taken the time to do the same for themselves. S/he will be able to use the healing methods that are most appropriate for you.

You might be thinking that this is just one therapist’s rant against insurance companies. Don’t take my word for it.  Check out this California therapist’s perspective on insurance written back in 2010 or take a look at how a major insurance company’s policies denied mental health treatment to its customers in 2019.

If you tried psychotherapy and were disappointed with the results or the treatment didn’t seem to “fit” after working with a provider from your insurance company, I hope you have a better understanding of what might have been happening behind the scenes.  We urge you to reconsider getting some support now that you do.  There are great providers in the healing professions on both sides of the insurance divide that can help you.  Call (305) 501-0133 or click here to schedule your free 15-minute Clarity Consult to learn more about how our team might be able to better help you when other insurance-based therapists couldn’t.