Why Many Therapists Don’t Take Insurance

I’d like to share this blog post written by my colleague, Sarah Wilson, who practices in Colorado and California. Until I started private practice, I had no idea how insurance for mental health services worked. Below, Sarah provides a behind-the-scenes look at the insurance world.  Re-posted here with permission:

If you’re looking for a new mental health therapist, you may have noticed a trend. Many therapists are no longer accepting insurance as a form of payment for treatment. If you were hoping to use your insurance to help cover the cost of therapy sessions for you, this might leave you feeling frustrated and wondering why many therapists aren’t accepting insurance anymore.

This revelation may come as a shock to many who believe that insurance coverage is a standard and necessary component of receiving quality mental health care. However, there are valid reasons behind this trend that need to be explored.

In this article, I will delve into the uncovered truth behind why therapists are hesitant to work with insurance companies. From reimbursement rates that fall far below the cost of providing treatment to the burdensome administrative tasks required for filing claims, therapists face numerous challenges when it comes to accepting insurance. I will also explore the benefits of not using your insurance for therapy as a client.

By understanding the reasons behind therapists’ reluctance to work with insurance, we can shed light on the current state of the mental health care system and work towards finding solutions that ensure that everyone across the country can receive the help they need.

The Challenges of Working with Insurance Companies

Reimbursement Rates and Other Fees

Therapists face a variety of challenges when it comes to working with insurance companies. One of the major issues is the reimbursement rates offered by insurance providers. These rates often fall significantly below the cost of providing therapy, making it difficult for therapists to sustain their practices while accepting insurance.

In addition to low rates, therapists are also responsible for payment processing fees both by the insurance companies and the credit card companies.

Many therapists find that they have to see a higher volume of clients to make up the difference due to low reimbursement rates, processing fees, and both clinical and business expenses, often leading to therapist stress and burnout.

Delayed Payments

Sometimes insurance companies may take months to pay a therapist for the services they already provided their clients. This delay can jeopardize the therapist’s ability to stay afloat, both professionally and personally.

Insurance Clawbacks

Did you know that months or even years after insurance pays therapists for therapy claims, insurance companies can demand therapists refund them?! The insurance companies may later say that the service was not covered. This is called a clawback. And while they’re at it with the clawback, the insurance company can also decline to pay the therapist for current clients’ claims that they already owe the therapist for.

These clawbacks can cost therapists thousands to even tens of thousands of dollars, once again, jeopardizing the therapist’s ability to pay their own bills. 

Expenses

When insurance companies reimburse low rates, have delayed payments, and insurance clawbacks, this can significantly impact therapists’ ability to pay their own personal and business expenses.

Not everyone realizes that in addition to standard business expenses, therapists also have clinical expenses. Standard business expenses often include an electronic health record system, office rent or equipment for a home office, office supplies, therapy supplies and technology equipment. Therapists are also responsible for payment processing fees both by the insurance companies and the credit card companies as well as taxes. 

Additionally, therapists have expenses for our clinical license consisting of licensing fees, time and money for required continuing education (to improve upon therapeutic skills), liability insurance, and most likely student loans for 6+ years of higher education. 

A self-employed therapist may likely be purchasing their own health care benefits, saving for their own “paid time off” or “paid holidays” and contributing to their own retirement since they don’t have an employer helping them with these benefits.

Limitations to Therapy

Furthermore, insurance companies often impose limitations to the type and duration of therapy that they will cover. This can create significant barriers to individuals seeking specialized or long-term treatment. Therapists who want to provide comprehensive care for their clients’ needs may find themselves limited by the constraints imposed by insurance companies. 

For example, insurance companies will pay the same amount for any session billed for 53 minute sessions or greater. In some therapy appraoches, like EMDR (Eye Movement Desensitization and Reprocessing), ART (Accelerated Resolution Therapy), and Brainspotting, the therapist may recommend longer sessions, such as 90 or 120 minutes. In this case, the therapist and client are doing deeper work and for longer than a normal therapy session, but the therapist gets paid the same amount by the insurance as they would for a 53, 55, or 60 minute session. 

As a result of these limitations, therapists may choose to forego insurance in order to have more freedom in their treatment approach.

Administrative Burden

In addition to low reimbursement rates and insurance clawbacks, therapists also have to contend with the administrative burden of dealing with insurance companies. Filing claims, completing paperwork, and navigating the complex billing process can be time-consuming and frustrating. 

This administrative work takes therapists away from their primary focus of providing therapy and can lead to burnout. Many therapists simply do not have the time or resources to handle the administrative tasks associated with insurance, leading them to opt out of accepting insurance altogether.

Conclusion

The decision to accept or decline insurance is a personal one for therapists, and there is no one-size-fits-all answer. It requires careful consideration of the financial, administrative, and ethical implications. For some therapists, working with insurance may be the best option to reach a larger client base and provide accessible care. For others, declining insurance allows for more flexibility, personalized treatment, control over their practice, and better self-care to provide high-quality therapy. For many therapists, the financial considerations of accepting insurance simply do not outweigh the benefits. If the insurance companies were able to eliminate or significantly reduce the challenges they pose to therapists, I believe more therapists would be willing to be in-network providers with them. As the mental health care system continues to evolve, it is important for therapists, insurance companies, and policymakers to work together to find solutions that ensure everyone has access to quality mental health care. By addressing the issues discussed in this article, we can move towards a more inclusive and effective system that supports both therapists and individuals seeking therapy. 

Article originally posted at: https://www.resiliencecounselingco.com/blog-sarah-wilson/why-dont-therapists-take-insurance?fbclid=IwAR0jEWwy4cTHtql7QV01MJJRuOe4q_i0MFFv0krN8dZT0cuQ8TaAOmZlJ0o