Psychotherapy was often considered a luxury or a service for the acutely mentally ill for most of its existence. Fortunately, there is less stigma around therapy today and therapeutic services can be covered by insurance companies. However, there are a number of reasons why clients opt to pay out of pocket instead of attempting to use insurance, as well as reasons why some mental health professionals opt to not contract with insurance companies.
Challenges with Using Insurance
- Insurance reimbursement for the therapist is often quite low, requires more paperwork and time, and there are more restrictions on coverage.
- Therapists have seen an increase in demand for therapy over the last couple of years which appears to be correlated with the COVID-19 pandemic. For a client seeking mental health services from an in-network therapist, it may be difficult to obtain the first appointment. Many in-network therapists have waiting lists or less availability in their schedules.
- With an increase in demand, some in-network therapists may be so busy that the quality of care they can provide to their clients diminishes.
- A provider taking insurance may not offer the specific service requested. If a person is seeking a particular type of therapy such as EMDR therapy, for example, a therapist who has that expertise may not be available in-network.
- Insurance companies may stipulate the number of sessions covered and specific types of evidence-based treatments for dealing with a particular problem.
- Insurance companies require diagnoses. An ethical dilemma a therapist contracted with an insurance company may have is providing a diagnosis that will be accepted and reimbursable by the insurance company. For some people, a diagnosis can provide a sense of relief that accounts for the individual’s challenges and possibly a solution to move forward. For some, the diagnosis may be a self-limiting label that isn’t actually helpful.
- Records requests are common.
- Denial of claims are common.
Benefits of Paying Out of Pocket
- Therapists who don’t contract with insurance often don’t carry as large of a caseload, and can often provide higher quality care due to less burn out and overwhelm.
- A client has more control over the course of their therapy when not using insurance (such as frequency, length of sessions, type of therapy modality, etc.).
- If insurance isn’t being used at all, there will be no records requests, so there is even stronger confidentiality.
- If a client does not have a “billable” or “reimbursable” diagnosis, or does not have “severe enough” symptoms, they don’t have to worry about meeting the “medical necessity” required by insurance companies. No problem is too small to seek therapy for.
- For those with a financial need, private pay therapists are often willing to reduce or negotiate a lower fee. It never hurts to ask.
I understand why clients want to try to use their insurance to fund therapy. I wish insurance companies didn’t make this so difficult for both the client and the therapist. However, the insurance model just does not make sense for my practice and the way I like to do therapy. I prefer to carry a smaller caseload, and have more quality care that is not limited by insurance companies. Since I understand that all people will not be able to afford my fees, I always have a limited number of reduced fee spots available at any given time.