I have written before about the challenges that come with accepting insurance as a therapist, especially as a therapist running my own private practice. We want mental health care to be affordable, and we need to pay our bills. In theory, health insurance is supposed to pay providers a living wage in exchange for services, making care affordable and allowing us to do things like eat and have shelter.
This is not how things tend to pan out in practice. Instead, insurance companies undercut us with “negotiated rates” that often are not enough to offset our business expenses, and then claim therapists are “greedy” when we refuse to accept it. Meanwhile their CEOs pull in seven-figure salaries.
When I credential with an insurance company, I sign a contract agreeing to accept their rates for the services I provide, which is lower than my stated rate for services. I also agree not to tell anyone what that rate is, so I actually do not know if a given insurance company pays me more or less than another provider who is also in their network. (This is actually one of the ways that Medicaid is ahead of the game – they publish their rates for various billing codes on their website, so I know exactly how much (how little) I will make for each service.)
When I opened my private practice, I had to re-apply for credentialing with each insurance company even though I was already in-network through my old job. Credentialing includes both the provider and the organization, so I was credentialed to bill as long as I was working through that organization. That meant that I had some idea of what my negotiated rates would be because I knew what they were paying me at that organization. I was able to credential with a few companies because their rates are sustainable, allowing me to run my business, help my clients, and continue to survive. I let several go, though.
Depending on your contract, you can regularly ask for a rate increase from the insurance company. You also have the option to de-credential if the rates are not sustainable.
When deciding whether or not to accept a contract position, consider what rates you can sustainably accept. In my practice, I gave myself a higher cutoff for insurance reimbursement because it is important to me to be able to see Medicare and Medicaid clients, and those rates are only sustainable when my private insurance contracts are high enough to offset the loss.
Fair Health Consumer is a free tool that lets you check the going rate for different services based on your zip code. Input the code, and see the average in-network pay per session. This can help you negotiate when trying to get a rate increase and let you know which payers are under-valuing your work. It can also give you a sense for how your private pay rates compare to the area – I learned that I am apparently under-charging for cash pay. (This is fine with me, as I am achieving my business’s income goals and want to make mental health care more affordable where I can!)
When figuring out reimbursement rates, make sure to ask about all codes that you bill. For instance, the company that pays me the most for individual therapy is not the company that pays me the most for a psychological evaluation. Some pay more for family therapy than individual, some pay the same for both, and others will not cover family therapy at all.
Before signing, find out what the negotiated rate is for each service you will bill, and don’t be afraid to ask questions or counter-offer. You should also re-assess your rates and financial needs on a regular basis. One company tried to lower my negotiated rate, so I left their network.
Use this information to figure out which insurances can sustain your business. And if you have the time, call your reps and demand healthcare reform that includes holding insurers accountable and requires sustainable reimbursement rates!