Why Your Therapist Does Not Accept Your Insurance Anymore

Conscious Roots Counseling came to be when I  decided to change the practice’s business from mostly insurance-based to self-pay. This decision snow-balled into renaming and rebranding and blogging and….you don’t care. You just want to know why your therapist is mean and expects you to pay more when you could see a different therapist that accepts your insurance. 

I have seen dozens of therapy websites that only tell the reader the benefits of not billing insurance from a client’s perspective. There are some benefits, but frankly not a lot. Because I value authenticity, I am going to explain everything - the pros and cons - for you as the client and for me as the therapist. 

And fair warning - this is a long blog article. But health insurance is complicated, and you deserve to know how your health insurance can be a hinderance to your health providers and you.

Diagnosing  

Insurance companies thrive on data. To have data, everything needs to be labeled and categorized. This means, you and the reason you see any medical provider must come with some sort of diagnosis code. This is both good and bad. In counseling, a diagnosis can be seen as a roadmap for treatment options. It helps the therapist conceptualize treatment. The difficulties arise because mental health symptoms usually do not fit into the pretty little check boxes of the DSM. We are human beings and not robots, so most people do not perfectly meet the criteria for certain diagnoses, but do need mental health services. 

If a client does not meet the criteria for a diagnosis, that does leave mental health providers in an awkward situation: 

• Tell the client, “Yes, I agree you would benefit from therapy. Yes I do accept your insurance. But, no I cannot bill your insurance because you do not meet the criteria for any diagnosis.”

• Lie to the insurance company that the client meets the criteria for some sort of low-stakes diagnosis (usually “Adjustment Disorder”)

Other times, a client does meet the criteria for a certain diagnosis. But after sending in the claim it is denied because that client’s particular insurance plan does not cover that particular diagnosis. Here we are again: should mental health providers just change the diagnosis to something that is covered or tell the client that insurance cannot be billed. 

There are further arguments that insurance companies having access to our diagnosis and treatment can actually decrease benefits and increase insurance costs. 

I remember when I worked for a community mental health agency, I attended the yearly mandatory “benefits meeting.” During the presentation, the insurance provider representative told EVERYONE IN THE ROOM that one employee within our agency was responsible for 70ish percent of the total amount of money spent on healthcare. Then the representative explained that the percentage was so high because the employee had cancer. And because this one person’s costs were so high, our out of pockets costs had to go up.

OMG. 

That experience was full of red flags. The representative technically did not break any HIPAA laws, because no identifying information was shared. BUT if you happened to know your coworker has been out on leave because of cancer treatment, you know who they are talking about. This is also an example of the data given to employers from insurance companies. Employers will not know names/identities, but they will know how many employees are seeking different types of treatment, including mental health services. In addition, employers look at cost. If more employees are using their health insurance benefits, costs go up. Eventually employees pay more for healthcare through higher copays and/or deductibles. 

Limited Services/Sessions

Some insurance companies do not cover mental health services, or greatly limit the number of sessions covered. This is frustrating for the client and the therapist. You may have the impression that services are covered, but suddenly after 10 sessions, claims are being denied. You and the therapist then have to send in paperwork for a “prior authorization.” Then someone at the insurance company reviews the paperwork and determines if you really do need therapy or not. If you do, congratulations, you get 10 more sessions before doing this process over again. If your insurance company says, “nope 10 sessions was enough,” you’re paying out of pocket for therapy. 

Insurance Reimbursement Rates

Before I worked in private practice, I had no clue how medical professionals were paid by insurance companies. I did not care. I paid my copay and continued on with my life. I’m going to give you a peak behind the curtain with an example:

Allie is a mental health counselor. She has been in the field for 10 years, has extensive education beyond graduate school and is a specialist in her niche. Her continued education and training is expensive and time consuming, but Allie values it as it helps her be the best therapist for her clients. Allie estimates that to cover the cost of her business and continued training in her speciality, she needs to charge $150 per session. (If you want to know how therapists calculate their sessions costs, see our blog Why Does Therapy Cost So Much)

Insurance Company ABC has decided that any therapist that sends a claim with the billing code for a 60-minute session will be paid $85. This is called a “negotiated rate,” but there is no negotiating, it is whatever the insurance company decides it is. The client has a $25 copay and pays Allie the $25. ABC sends a check for $60. That leaves a $65 difference. Allie does not get that $65 from anyone. It is “adjusted” and Allie gets $85, not the $150 her time is worth. 

Insurance Company 123 pays a little better in total, $105 per session. But the client has a high deductible plan. The client pays $105 until their deductible is met (usually $5,000 or more per year). Assuming the client has no other medical bills, it will take just over 47 sessions for the deductible to be met. Even then, Allie is still short $45 per session that she needs to charge. 

Additionally, insurance companies sometimes TAKE BACK money they already paid to therapists. This has happened at least once to every therapy practice I know. They take back money after they do an audit and discover that certain services should not have been paid for different reasons such as change in insurance policy, sessions went over the capped amount in a year, secondary insurance should have been billed, etc.

Extra Cost for Practices

Now that you understand reimbursement rates, let me explain the extra costs to accepting insurance. 90-95% of the time, insurance claims are submitted and accepted with no issue. There may be a delay in processing the claim, which delays the payment, but overall the system does work. Most of the time. It’s that 5-10% that kills medical providers. It can take HOURS to get hold of an insurance representative to figure out why a claim is being denied, then figure out a solution. Time is money. In private practice we only make money when a client sits on the couch in front of us and we provide counseling. 

When issues arise, we can try to call insurance companies ourselves (but that’s a loss of potential revenue and seeing a client), or use a medical biller to resolve the issues. Medical billers cost anywhere from $50-$150 an hour. If they are on the phone with an insurance company to resolve an issue, they (rightfully) bill for every minute of that phone call.

So let’s use Allie as an example again:

Allie’s client changed jobs mid-treatment from ABC to a subsidiary of 123. Allie is in-network with this subsidiary, but has never billed them before. Allie sees her client, bills the usual diagnosis and session code. Two weeks later, 123 notifies Allie that the session was denied. Allie uses a medical biller for these issues and asks the biller to figure this out. A week later, the biller has time to call 123 and is on the phone for one hour. Using the reimbursement rate from before: Allie will get a total of $105 for the session now that the issue is resolved. But she had to pay the medical biller $60 for her time. Allie was really only paid $45 for this session. And remember, Allie worked out that she needs to make $150 a session in order to make money, pay bills, and attend the trainings she needs. 

Small Practices

A small private practice like Conscious Roots Counseling cannot keep up with the changing rules and expectations of insurance companies. It becomes too time consuming and too costly. In the past we accepted two major private sector insurance companies, but even with just two, it became too problematic.

Insurance claims are best managed by larger practices. They have the ability to hire employees specifically for medical billing. When issues arise those employees are familiar with the billing process and common mistakes. Sometimes even catching mistakes on claims before they are sent. 

One Insurance

Since spring/summer of 2022, we have only been in-network with one insurance company: CareSource. We decided to remain in-network with CareSource because they are a major Medicaid insurance provider in the Cincinnati / Blue Ash, Ohio area. By being in-network with CareSource, we are able to see many individuals in our community that have financial needs. 

Health insurance is complicated for everyone involved. With these complications, it can become burdensome for some health providers to accept insurance. As a therapist, I want to work with and help as many people as possible. But I also need to make a living and I need to be able to run a business smoothly. Deciding to become an out-of-network provider (with the exception of CareSource) was not an easy decision. It mostly benefits myself, my coworkers, and the business as a whole. But I hope after reading this you understand why this was the best decision for us.