From recent graduates to seasoned clinicians, today it seems that everyone in part- or full-time private practice is asking the same question: “Should I accept health insurance?”
It’s a complicated question. The decision whether to accept third party payments will have a big impact on your counseling practice. The question is made even more difficult as there isn’t just a lot of information to consider—there is also a lot of misinformation about working with insurance companies.
Below are a few semi-misguided statements I’ve heard from counselors worried about accepting insurance. I’ve tried to provide a helpful response to each statement:
1) “I’ve heard I should stay away from accepting insurance.”
In the same way that your parents might have told you “don’t do drugs,” some counselor’s mentors have warned them “don’t do insurance.”
The idea of starting a cash-only practice is enticing! There’s less fuss with billing, and you can set your own prices for services. The downside is that building a private practice, even with insurance, is hard work—starting a “cash-only” private practice can be even harder.
While some clinicians succeed, many counselors struggle to maintain a large enough cash-paying client base to make a living. This may be okay if a counselor wants only a part-time practice, or has a separate source of income.
2) “I’ve heard that insurance companies don’t pay well.”
There are a few companies that pay particularly poorly. However, the idea that insurance companies don’t pay well might be overstated.
In Boston, the average intake appointment (90801) pays about $100 for a clinician with a Master’s degree. Ongoing appointments for individual therapy (90806) pay around $75-87, and appointments for couples counseling (i.e., “family therapy with patient present”, 90847) pay about $10 more.
Note: these are 45-minute sessions, not 1-hour sessions.
If a counselor can fill their client roster with clients who are willing to pay these rates (or higher) in cash, great! For them, accepting insurance probably doesn’t make sense. On the other hand, insurance might be a good option if there are gaps in one’s schedule, or if one’s sliding scale keeps dipping significantly lower than what insurance would otherwise pay.
3) “I’ve heard that insurance companies are impossible to deal with.”
Not exactly. When it’s business as usual, insurance companies are easy to deal with (you submit claims, and receive payment). However, at times when there is confusion over an unpaid claim, insurance can be a hassle. Calling may amount to some hold time, and perhaps a few frustrating exchanges with the “provider relations department.”
Still, working with insurance is not impossible. If you don’t want to interact with them personally, you could consider hiring a billing company. The cost is usually about 8% of what they collect. Since this doesn’t include client co-pays and deductibles (cash you’ll receive from clients), it ends up somewhere around 5.5% of your gross revenue.
4) “I don’t want to be a ‘slave to’/’employee of’ insurance companies.”
Being networked with insurance companies, you are neither a slave, nor an employee. You are simply affiliated (i.e., credentialed), which means that you have been given approval to bill insurance for authorized services that you render to their insured customers.
Where some providers find frustration is that insurance companies are not willing to authorize care to patients with certain diagnoses, such as “V codes” (e.g., relationship problem, academic problem, etc.). Hence, to receive payment for services, some counselors find themselves trying to justify a biological diagnosis, such as Major Depressive Disorder, even if the patient’s presenting symptoms fall short of the diagnostic criteria.
5) “I don’t want to do all the additional documentation.”
Don’t confuse a private practice that accepts insurance, with a more bureaucratic setting such as a hospital, or a government-run medical clinic.
As a licensed counselor, you are already taking clinical notes—at least a diagnostic evaluation, treatment plan, and SOAP notes each session (right?). That’s all you need.
In fact, insurance companies aren’t generally going to ask to see this, and they can’t dictate to you how you should do your record keeping. What insurance companies will ask for are dates of service, patient diagnoses, and procedure codes.
6) “I don’t want to be told what clients I have to see.”
This is a common misconception. Even if you are networked with an insurance company, you are never required to see any particular patient or client. You still get to decide what clients you want to see, and what clients you would rather refer.
Dispelling Rumors about Insurance, Not Advocating for It
In the above paragraphs, we reviewed 6 common rumors about accepting insurance. However, I’m not advocating that insurance is the right fit for you and your practice. Such a decision requires a much longer consideration, outside the scope of this short article!